Oslo Børs VPS today launches a service that will help companies listed on Oslo Børs and Oslo Axess to identify the real owners of shares held in nominee accounts. This will contribute to greater openness and improved monitoring and control, and will thus help to further improve confidence in the Norwegian securities market. Information on the identity of shareholders will also give companies a better basis for good IR activities and better communications with their owners.
There is a general feeling that the shareholder lists produced by VPS often do not give a real picture of a company's ownership because some foreign shareholders have registered their shares on what is known as nominee accounts. This represents a growing challenge in terms of openness, good IR work and carrying out various types of corporate action. The new service Nominee ID helps companies to identify the real owners of their shares, putting them in a better position to understand the purpose of shareholders’ positions and the balance of ownership between shareholders and fund managers.Nominee ID has been developed in collaboration with the London-based firm Richard Davies Investor Relations (RD:IR). Oslo Børs VPS is now able, working closely with RD:IR, to provide a detailed analysis of a company's shareholders in three weeks. RD:IR has extensive international experience in identifying the real owners behind nominee accounts and producing detailed analyses of shareholders, and it maintains regular contacts with the relevant entities in various countries.
Companies that decide to use the service will receive reports and analyses of their ownership structure on a regular basis, for example monthly or quarterly. Working with a power of attorney from the company, RD:IR exercises the company's right to identify its shareholders by distributing enquiries to fund managers and banks. If any of the recipients refuse to answer or are unwilling to provide the information asked for, they will be clearly identified in the report to the company. Experience from other countries suggests that encouraging openness from the majority of recipients leads to fewer entities choosing not to provide information.
Background:
When investors buy shares in another country, they often register their
ownership through what is known as a nominee account. This is a management
account, typically held with a bank, which holds shares on behalf of the real
owners. In many cases, investors use nominee accounts for practical reasons, for
example to use the services of the nominee to monitor important developments
such as information on the company's AGM and dividend information. The
disadvantages are that the nominee normally holds the shares’ voting rights,
and the real owner does not have any guarantee that the nominee will keep him
fully up to date on information from the company.