In September, Avenir Registrars hosted clients, staff and many of our network of professional services providers at an event to mark the company’s 10th anniversary. Thank you to all those who braved the autumnal weather and joined us at the Eight Club in London for the evening. And whilst the event was primarily a celebration of what Avenir and its partners have achieved through a decade of innovation and growth, it was inevitable that the conversation would turn to business on more than one occasion. Touching on a number of topical themes including regulation, technology and politics, we felt that a snapshot of these comments would provide a suitable journal of where our industry is today – and where it might be headed in the future, too.
Politics
With the new Labour government getting their feet under the table, the “honeymoon” period being a distant memory and the thorny issue of the first Labour budget in almost 15 years looming, there was plenty to be said about legislative change. Many expressed concern that removing the Stamp Duty exemption – let alone the favourable Inheritance Tax treatment – from AIM Shares would serve up a fatal blow to London’s junior market, although this was countered with a sanguine response – at least from some – that what would be would be, and that the market mechanisms would evolve to accommodate the necessary change. The more liquid entities move to the main market and those with less volume switch to private venues – who knows?
Technology
Artificial Intelligence is certainly a prolific topic right now, and not just amongst hard-core technology fans. Is it something that can improve the securities registry process, or an innovation that needs to be feared? The conclusion here was that this remains very much an evolving subject – how many times have we seen the next big thing – be that blockchain, NFTs, even the Segway scooter – hyped to such an extent that that we’re convinced wholesale revolution is imminent, only to find that the reality falls some way short? There’s little doubt that the implementation of AI can further streamline or automate processes that may have been labour intensive in the past especially for legacy registrars. Avenir’s digital first approach gives the company a significant head start in terms of automation but the potential benefits when it comes to issuers looking to migrate share registers to a new home shouldn’t be underestimated.
Dematerialisation
The mission to migrate securities certificates – and the accompanying registers – into a purely electronic format remains ongoing. Brexit, then a lack of urgency by the last government, both acted to stall progress here, but with legislation once again advancing through Westminster, further developments here seem inevitable. Whether this offers the optimal solution for investors remains to be seen, but the message from guests at the event at least came with plaudits for us. They saw Avenir being ahead of the curve – again thanks to the digital first structure of the business – and the realisation was clear that securities registers are only going to get more complicated. It was also acknowledged that the burden of unpicking this will ultimately lie with the issuers who collectively probably ought to be doing more – and quickly – to ensure they can control the expense here whilst ensuring that shareholders aren’t disadvantaged.
If asked ten years ago what some of the key themes would be for any industry today, it’s always going to be difficult to make any sort of accurate prediction. But these are at least some of the considerations that sit front of mind in the world of share registry in 2024. How the landscape will look in 2034 as Avenir marks its 20th anniversary is anyone’s guess, but it remains clear that efficiency gains can still be made – and will be absolutely vital if investor choice and shareholder value are to remain front of mind for issuers.
An amended version of this article originally appeared in the October 2024 version of AIM Journal. You can download a printable version here.