The entire economy is being buffeted right now by the cost of living crisis. Employees in a tight labour market are demanding higher wages, input costs are rising and many shareholders continue to expect inflation-busting increases in dividends. We’ve discussed the importance of keeping listing costs low to maximise shareholder value, but by all accounts, in 2022 this has never been more critical.
The Avenir Registrars proposition differs from many legacy registrars because we built our systems from the ground up. We did this by working with a team of specialists who had years of experience in developing technology for Stock Exchanges and Central Counterparty Clearing Houses across the globe, along with former brokers who themselves understood first-hand the challenges faced when interacting with registrars on a day-to-day basis. This insight means that the highest levels of automation have been included at every step of the journey, not only reducing staffing costs but also increasing transaction accuracy.
The high level of automation at Avenir has also enabled us to be innovative when it comes to our charging structures, using a fixed fee approach to ensure that issuers using our services have a clear understanding of what their costs will be over the course of a year, regardless of underlying market activity. Perhaps most significantly is the fact Avenir doesn’t charge CREST registrar traffic fees on a volume basis, something which a number of our clients, especially amongst those issuers with smaller market capitalisations, have told us is greatly appreciated. This approach removes the risk of unexpected – and unwanted – invoices being received simply because of an unexplained spike in trading activity, which all too often leads to little net improvement in the underlying value of the stock.
And whilst some additional costs may be incurred in the event significant levels of certificated transactions are requested, our system was always built on an electronic-certificate first basis. That’s something which is soon to be compulsory for our Irish issuers with the implementation of the final phase of the Central Securities Depositories Regulation (CSDR) and subject to the legislative agenda, could well be mandated for UK, Jersey and the Isle of Man companies in the future, too. Interestingly companies incorporated in Guernsey already have scope of issuing electronic records in place of certificates. Maintenance of holder certificates remains a significant and unnecessary cost for companies in the 21st century.
Rising interest rates mean the ongoing competition for capital will only get more intense, as lower risk, fixed income options become that bit more attractive. Ensuring that costs are minimised wherever possible for listed companies can only therefore be seen as that much more relevant. As we have noted before the financial headwinds facing companies who want to maintain a public market listing continue to grow, but at Avenir we’re proud to be supporting issuers throughout the life cycle of a securities issuance and doing so in a way that helps them maximise shareholder value in return.
Falisha Wright, Business Development Executive, Avenir Registrars
In April 2022, Falisha Wright joined Avenir Registrars as a Business Development Executive. Having previously worked with Link Group, Falisha has brought with her an in-depth knowledge of registrar operations, customer needs and the importance of managing client expectations. Falisha is taking a key role in new client recruitment and the subsequent onboarding processes, and is also a mother to five beautiful young children.
This article originally appeared in the July 2022 version of AIM Journal. You can download a printable version here.