Company Law Bill [HL]

Clause 586(4) provides an important safeguard, especially for individual shareholders, by ensuring that new arrangements for paperless holding and transfer of securities do not deprive them of existing rights that may be important to them. Perhaps the most important of these rights, protected by subsection (4)(a), is the right to have one’s name entered on the register. We do not want the new arrangements to be such that individual shareholders are forced to hold their shares through nominees. Another important right is the right to instruct company’s registrar to register the transfer of shares to another individual—for example, where a transfer is made ““off market”” between two members of the same family. We have chosen to use the language of ““giving instructions”” to cover that sort of situation. One could also describe it in terms of ““exercising rights””. The difference between the language of the Bill as it stands and that of the amendment is that ““exercising rights”” could cover a broader range of circumstances.