Share Register

A share register, also called a register of members or shareholder register, is the official list of the holders of a company's shares. For each holder it records the name and address, the number and class of shares held, and the dates on which the person became and ceased to be a holder. Every company with registered shares must keep one. The company uses it to decide who is entitled to dividends, to vote and to receive notices.

The register is usually maintained on the company's behalf by a specialist firm known as a registrar or, in North America, a transfer agent; the service is described under registrar services. It is distinct from registers of the people who ultimately own or control a company, such as a beneficial ownership register, because the registered holder is often not the real investor.

In most legal systems based on English company law, entry in the register is what makes a person a member of the company. A buyer of shares does not become a shareholder in law until the register is updated, and the register is treated as evidence of title unless shown to be wrong. A share certificate, where one is issued, is only evidence of what the register says. In the United Kingdom the duty to keep a register of members is set out in the Companies Act 2006, and the register must be open to inspection by members and, subject to a proper purpose test, by others.

Practice differs elsewhere. In markets where shares are held only through a central securities depository, the depository's records may themselves constitute the register, or the register may simply show the depository's nominee as holder of all shares in the system. In the United States, most listed shares are registered in the name of the nominee of the national depository, and investors hold through brokers in what is called street name.

The name on the register is the legal owner, but frequently not the person who bears the economic risk. Institutional and retail investors commonly hold through custodians and brokers, whose nominee companies appear on the register, often pooling many clients in one omnibus account. The distinction is captured in the terms registered holder position and beneficial owner position.

This structure makes holding and trading efficient, but it means the company cannot see its real investors from the register alone. Issuers therefore use legal powers to look through nominees. Examples are the disclosure notices available to UK public companies and the shareholder identification process introduced across the European Union by the revised Shareholder Rights Directive. Investors behind a nominee also depend on the chain of intermediaries to pass on information and votes.

The register changes whenever shares are issued, transferred or cancelled. For shares held in certificated form, the registrar acts on a signed transfer form and the old certificate, a workflow described under share transfer processing. For shares held electronically, movements settle in the depository and the register is updated from its records, in some markets instantly and in others by periodic reconciliation. The long shift from paper to electronic holding is described under dematerialisation of securities.

The registrar also records changes of name and address, deaths and the appointment of personal representatives, court orders and payment instructions. Before each dividend or meeting, the register is read as at the record date to produce the list of those entitled.

The register is the starting point for most dealings between a company and its owners:

• Payments. Dividends and other distributions are calculated and paid to holders on the register.
• Meetings. Notices of each shareholder meeting are sent to registered holders, and voting entitlements are taken from it.
• Corporate actions. Rights issues, takeovers and consolidations are applied to registered positions.
• Analysis. Companies and their advisers study the register to understand who their investors are and to detect stake-building.

Comparable records exist for other instruments, such as the bondholder register for registered debt and the investor register of an investment fund.

Registers are now almost always electronic databases. Several jurisdictions have changed their laws to allow shares to be issued and transferred on distributed ledgers, with the ledger serving as the register or as a copy of it, and some funds use an on-chain transfer agent for this purpose. In the United Kingdom, the government has accepted recommendations to end paper share certificates and move remaining certificated holders to electronic form. Data protection is a continuing concern, since registers contain personal details and have been used for unsolicited approaches to shareholders.