Company Law Reform Bill [HL]

moved, as an amendment to Amendment No. 130, Amendment No. 131:"Line 2, leave out from beginning to ““deemed”” and insert ““Upon the members of the company passing a resolution under paragraph 7(2) of Schedule 7, the company is””" The noble Lord said: I have tabled this amendment to make the amendment moved by the noble Lord, Lord Hodgson, more amenable to acceptance by the corporate sector. We are talking about an issue known as dematerialisation, a process by which shares are no longer issued to all shareholders in certificated form, but electronically. Although, as the noble Lord said, some 80 per cent of shares traded are traded in electronic form, a recent survey concluded that only between 3 per cent and 10 per cent of shareholders would respond to rights that were not automatically granted when their shareholding was dematerialised. So you could conclude that there would not be a vast increase in cost if this was all done by mailing. However, the Bill also enables companies to default to electronic means of communication with their shareholders, with all the significant savings that that engages. The best way in which to serve the ordinary investor would be to link the take-up of electronic communication with the obligation to enfranchise dematerialised shareholders. That is the sole purpose of the amendment. In all other respects, I support and endorse what the noble Lord, Lord Hodgson, has said. I beg to move.