An innovative partnership between Catenai Plc and Avenir Registrars has deployed the first fully digital share register on London’s AIM Market. This means that certificated shareholders have QR-coded, downloadable e-certificates, sitting comfortably alongside nominees or CREST holders. In the field of securities registry, Avenir is a leading technology innovator and has been actively promoting updates to streamline the process of managing ownership registers for the past decade.
Equally, as an innovative technology solutions providers themselves, Catenai was quick to embrace the benefits of this new approach. From an issuer’s perspective, Catenai understood that a fully automated system would not only accelerate response times and eliminate the risk of human error but would also deliver significant cost savings, in turn providing better shareholder value.
John Farthing, CFO of Catenai, explains more about the benefits of an electronic-first register for the business.
- What did the set-up process involve in migrating from a traditional style register?
The process was remarkably straightforward. Legally, we were first required to pass a special resolution at the AGM to allow us to migrate to a fully digital process for securities registry. We then closed the old, “paper” register on the Friday night and completed the migration over the weekend, with Avenir doing the necessary administration. By market open on the Monday we were fully online and there were no interruptions for securities holders.
2. What benefits are you seeing so far?
As CFO I now have real-time portal access to registry records and can download email addresses to issue General Meeting notices. That generates significant savings when it comes to postage and printing costs, and also means that notices can be served immediately, rather than having to allow the standard two days for delivery. For our latest GM, I started receiving proxy votes back within the hour.
3. Is there a material cost saving?
We already realised some significant cost savings when we moved from our previous registrar to Avenir back in 2021, primarily as their model doesn’t levy individual CREST trade transaction charges. However, that still left us having to pick up the significant printing and postage charges that were applied every time we needed to communicate with investors. Switching to electronic communications not only makes processes faster but again this has served to cut our registry costs even further.
4. Have you noticed any downsides in the wake of the migration?
No, I am delighted with the move and the early feedback from shareholders has been positive too. The beauty of the Avenir system is that should a securities holder want a physical share certificate or a hard copy of any communications, this can be accounted for but it’s no longer the default option, providing far more flexibility for the majority.
5. Do you think other listed companies should adopt this digital register approach?
I think others will certainly consider it. There’s a big focus on bringing down the costs of maintaining a listing right now and this provides a very useful tool for achieving that. What’s more, besides the cost savings, initiatives like this also help address the ESG objectives of many listed companies by cutting down on the creation of unnecessary paper documents, which investors increasingly prefer to view online anyway.
Whether you’re a listed or unlisted issuer of debt or equity, to learn more about the process of migrating to a digital securities register and the benefits this can bring, please e-mail contactus@avenir-registrars.co.uk.
An amended version of this article originally appeared in the May 2024 version of AIM Journal. You can download a printable version here.