Last month we looked at the journey so far for Avenir as we approach our 10th anniversary this Autumn. But as interesting as a retrospective is, we’re even more excited to share some thoughts as to where the company is looking to evolve and innovate in the future. Obviously there’s myriad regulatory factors and potential changes to legislation that could come into play here, but for now our own agenda is dominated by a few key points.
Building bridges
Core to this is the idea of closing the gap between issuers and investors. The arcane methods of communicating that still exist between these two bodies arguably defy belief at times. Here we have two groups who ought to be in lockstep if shareholder rights are to be fully exercised, yet far too many communications and key aspects of ownership such as shareholder certificates and the registers themselves remain in a 19th century paper-based realm. We’ve already made some progress here with one of our clients becoming the first in the UK to operate a fully digital share register, thanks to some straightforward amendments to the articles of incorporation. They save significant amounts of money from the fact that there’s no longer an obligation to physically print then mail out documents, whilst corporate actions can be exercised electronically too, allowing for an unprecedented level of shareholder engagement. With fall-back paper-based solutions still available for the small minority who will not or cannot change, and when an estimated two tonnes of paper is sent every day from UK issuers to custodian banks, what’s not to like? As we chase net zero targets, further evolution here is ripe for the taking.
Maintaining investor choice
This feeds into a broader narrative about ensuring that any change doesn’t come at the price of investor choice. A change of administration in Westminster appears to have done little to disrupt attempts to implement digitisation reform, but is this on course to be delivered at a price that would see securities holders’ rights eroded? The current direction of travel suggests that all individual shareholders may be obliged to manage equity holdings via nominees, so losing the right to have their own name on the share register. But that doesn’t need to be the case as hybrid solutions we have already developed using our existing technology allow a flexible approach to be taken when digitising registers but allowing individual investors to remain named. We expect other registrars to overhaul their infrastructures in the medium term – evolution can be delivered here without securities holders paying a literal price.
Adapting to a changing world
Securities registry requirements are also changing. Companies are remaining private for longer, increasing the demand for easy solutions to facilitate the management of ever-more complex shareholder registers. These also need to offer a seamless route into public markets should that be the agreed direction of travel. Our challenger status as a next-generation registrar means that our applications can be just as useful for privately held companies as they are for those in public markets. We’re truly agnostic here and open to all – something our price point underlines.
A continuous quest for value
And we also acknowledge a need for all professional service providers to work collaboratively to bring down the cost of coming to market and then maintaining a listing. At Avenir we’re already doing our bit with transparent pricing structures which are fixed at every opportunity and we want to advocate the work of others who share this ethos. With a growing number of companies delisting, stating that public markets no longer provide value for money and instead finding a home in the fast growing private venue sphere, for London to maintain its title as a capital market hub, we need to see an end to this exodus.
The last decade has been a true journey in growing a business suited for the 21st Century in a sector that has at times been slow to evolve. We look forward to leading that charge further in the next decade – and beyond.
An amended version of this article originally appeared in the August 2024 version of AIM Journal. You can download a printable version here.