Paperless plan to benefit investors

INVESTORS in Irish plcs face a paperless future under plans announced yesterday to make buying and selling shares more efficient.

The Irish Stock Exchange (ISE) said it wanted to get rid of paper-based share certificates and replace the system for tracking share ownership with an all-electronic version. A special project team, with representatives from plcs, stockbrokers, the Financial Regulator and the Government, has recommended a system that would give investors a regular statement detailing the shares they own and a unique registration number to make their dealings easier to trade.

ISE director of trading and regulation, Brian Healy, said: “There is a growing realisation that a system using paper share certificates is outdated and inefficient compared to a fully electronic means of holding and settling shares. In such an environment shares would be traded and settled electronically, although shareholders would still have the ability to hold their shares directly on a share register.”

But he emphasised shareholders would lose none of their current rights when the change is implemented.

“The only difference would be that, rather than holding a paper share certificate they would instead receive a detailed statement of their shareholding. In fact, investors would benefit from the increased efficiency and speed of settlement that a fully electronic system will bring,” he said.

The current system means an order to buy or sell is not formally completed for three days. The Dublin market would suffer if Britain had a paperless system and Ireland failed to follow suit.