Paper Certificates come 2025

[1nvest]

The EU in its wisdom decided to end paper certificated stocks/shares come 2025. When the UK left the EU it rolled existing EU law into UK law so as-is will also fall into line with that policy/practice. Is there any push to repeal that policy within the UK and continue with paper certificates still being a option beyond 2025 for those who might so prefer to hold stocks that way rather than being forced to gain exposure to stocks via digital and stocks being registered in the brokers name?

There's quite a extensive list of UK stocks (and Investment Trusts) that can still be held in paper certificated form https://www.shareview.co.uk/4/Info/Port ... raded.aspx And that could even be a competitive edge in some cases. US investor buys FCIT investment trust, has no dividend withholding taxes applied by the UK, and if held in paper certificated form involves no other ongoing costs/fees ... as a alternative to a world stock ETF where the shares are in the brokers name, they have to pay to use another brokerage, and incur yearly platform/brokerage fees.

Seems to me that as with digital Pounds, once the monopoly is established, so can costs/charges be levied without competition. Yes paper form is move expensive, typically around a 3.5% round trip cost to buy/sell (1.5% each way plus 0.5% stamp duty), and losing certificates can also be a problem, however once bought the shares are in your own hands, don't require a broker, so no platform fees etc. A truly low ongoing cost for those who are inclined to longer term buy and hold.

[XFool]

The EU in its wisdom decided to end paper certificated stocks/shares come 2025. When the UK left the EU it rolled existing EU law into UK law so as-is will also fall into line with that policy/practice. Is there any push to repeal that policy within the UK and continue with paper certificates still being a option beyond 2025 for those who might so prefer to hold stocks that way rather than being forced to gain exposure to stocks via digital and stocks being registered in the brokers name?

This dates from June 2022, but I don't know of any more up-to-date information:

Are share certificates going for good?

Hargreaves Lansdown

In September, the UK government announced it’s looking at “converting these paper shares into electronic form, while preserving the rights of existing shareholders.”

If this happens, your share certificates will become null and void. But you’ll still be the registered shareholder. And in order to sell your shares, you’ll need to contact the company’s registrar.

How would this be implemented? I assume the Registrars would be key and they already offer share dealing, The problem here is they are much more expensive that typical brokers. So, on advance information of such a scheme coming into effect and assuming they don't reduce their typical dealing charges after dematerialisation, it might be best to dematerialise paper certificates in advance yourself, using your normal broker.

[1nvest]

But for those that would rather not be tied into a particular broker, free to dispose of their certificates with whoever at the time may better fit their desires/needs, certificated in own name can have appeal. As can the case of where certificates may be held in joint husband/wife names, and where upon the passing of one just requires a transfer of names notice (accompanied by a death certificate).

Found this ...

https://www.money.co.uk/share-dealing/c ... re-dealing

the EU has passed legislation to end the use of paper share certificates by 2025. Although the UK government no longer has to stick to this timeline due to Brexit, it has nonetheless created a digitalisation task force to address how existing paper shares can be converted into digital ones while preserving share owner rights.

The chancellor of the exchequer asked the taskforce to publish final recommendations and an implementation plan by spring 2024.

So seemingly another year to wait. Will be interesting to see their final decision as whatever way that goes may also be a indicator of the continuation of ending of physical money/cash. I suspect both will be pushed towards digital, no other choice, another loss of freedom. Along with higher costs for consumers (tied into a brokerage and they might set a high cost to move to another, and raise ongoing costs in the absence of competition/alternatives).

[Dod101]

I do not know what the current situation is but If my shares are not held in a SIPP or an ISA I prefer to hold them as paper certificates. Any dividend paid directly to my bank account, documentation to my letterbox in hard form if I want it and the best security I can have. There is currently no need to hold such shares via a broker although some who do not care about the benefits I have mentioned will prefer that for ease of trading.

Dod

[1nvest]

I do not know what the current situation is but If my shares are not held in a SIPP or an ISA I prefer to hold them as paper certificates. Any dividend paid directly to my bank account, documentation to my letterbox in hard form if I want it and the best security I can have. There is currently no need to hold such shares via a broker although some who do not care about the benefits I have mentioned will prefer that for ease of trading.

Dod

As of January 2023 EU directive was to end newly issued paper certificates, and 2025 to completely have withdrawn from paper certificates. As part of Brexit existing EU laws were rolled into UK laws but there seems to have been some ignoring of the January 2023 directive compliance. How are you buying/selling paper certificates? Have you added any new paper certificates since January 2023?

Another factor with nominee is that individuals don't get the voting rights either, which instead falls into funds/brokers pockets, who often have different political/social beliefs that might be totally opposite to individuals preference.

[Dod101]

I do not know what the current situation is but If my shares are not held in a SIPP or an ISA I prefer to hold them as paper certificates. Any dividend paid directly to my bank account, documentation to my letterbox in hard form if I want it and the best security I can have. There is currently no need to hold such shares via a broker although some who do not care about the benefits I have mentioned will prefer that for ease of trading.

Dod

As of January 2023 EU directive was to end newly issued paper certificates, and 2025 to completely have withdrawn from paper certificates. As part of Brexit existing EU laws were rolled into UK laws but there seems to have been some ignoring of the January 2023 directive compliance. How are you buying/selling paper certificates? Have you added any new paper certificates since January 2023?

Another factor with nominee is that individuals don't get the voting rights either, which instead falls into funds/brokers pockets, who often have different political/social beliefs that might be totally opposite to individuals preference.

Don't overegg the pudding. With some brokers e g, II, we do get our voting rights but only by courtesy of the broker. At least Interactive Investors are trying!

I have not bought any new shares with certificates for a long while and usually buy them on a platform, then ask the platform to transfer the shares to certificated form in my name. Again, II will do that for i think £5. I still have quite a few certificated shares but over the years have transferred most of them into ISAs or SIPPs.

Dod

[Dod101]

Further to my earlier email, II now charge £42 per certificate! it used to be £5. Another nail in the coffin for certificates.

Dod

[1nvest]

Further to my earlier email, II now charge £42 per certificate! it used to be £5. Another nail in the coffin for certificates.

Dod

Not IMO.

Open a ii account, credit that account and buy say FCIT shares, and pay £42 to transfer those to certificated/own name and close the ii account. Or cheaper still x-o https://www.x-o.co.uk/nominee-account.html#how-much charge £18 (Certificated withdrawal fee/ transfer out fee £15.00 + VAT (per stock))

x years later when you want to sell, open say a HL account who accept inward certificate transfers for no cost https://www.hl.co.uk/shares/share-deali ... re-dealing (fill in a Crest transfer form and send that it along with the certificate to HL) and once transferred sell the shares, withdraw the cash and close the HL account.

Assuming that to be the case/possible, as it seems to me to be, then that's about the most inexpensive way to longer term buy and hold. For x-o used to purchase FCIT shares £5.95 dealing charge to buy, £18 to convert to certificated, £24/odd total (+spread + stamp duty), and where there's no £12/month broker fee for the duration across which the shares are held. And where the shares are held in your own name, rather than in the brokers name.

With age I trade less, and not having a online account potentially being hacked would be one less worry. Also seems a more purist HYP choice, 15 odd shares initially equally loaded, £18 each with x-o to be converted to certificates and thereafter left as-is (collect/spend the dividends).

[daveh]

I do not know what the current situation is but If my shares are not held in a SIPP or an ISA I prefer to hold them as paper certificates. Any dividend paid directly to my bank account, documentation to my letterbox in hard form if I want it and the best security I can have. There is currently no need to hold such shares via a broker although some who do not care about the benefits I have mentioned will prefer that for ease of trading.

Dod

As of January 2023 EU directive was to end newly issued paper certificates, and 2025 to completely have withdrawn from paper certificates. As part of Brexit existing EU laws were rolled into UK laws but there seems to have been some ignoring of the January 2023 directive compliance. How are you buying/selling paper certificates? Have you added any new paper certificates since January 2023?

Another factor with nominee is that individuals don't get the voting rights either, which instead falls into funds/brokers pockets, who often have different political/social beliefs that might be totally opposite to individuals preference.

I hold one share in paper form with a drip set up and get an additional paper certificate twice a year fro the drip shares - no change since 2000.

I get to vote all my shares held at II both the ones in my ISA and the ones in my CREST sponsored account.

[Dod101]

Further to my earlier email, II now charge £42 per certificate! it used to be £5. Another nail in the coffin for certificates.

Dod

Not IMO.

Open a ii account, credit that account and buy say FCIT shares, and pay £42 to transfer those to certificated/own name and close the ii account. Or cheaper still x-o https://www.x-o.co.uk/nominee-account.html#how-much charge £18 (Certificated withdrawal fee/ transfer out fee £15.00 + VAT (per stock))

x years later when you want to sell, open say a HL account who accept inward certificate transfers for no cost https://www.hl.co.uk/shares/share-deali ... re-dealing (fill in a Crest transfer form and send that it along with the certificate to HL) and once transferred sell the shares, withdraw the cash and close the HL account.

Assuming that to be the case/possible, as it seems to me to be, then that's about the most inexpensive way to longer term buy and hold. For x-o used to purchase FCIT shares £5.95 dealing charge to buy, £18 to convert to certificated, £24/odd total (+spread + stamp duty), and where there's no £12/month broker fee for the duration across which the shares are held. And where the shares are held in your own name, rather than in the brokers name.

With age I trade less, and not having a online account potentially being hacked would be one less worry. Also seems a more purist HYP choice, 15 odd shares initially equally loaded, £18 each with x-o to be converted to certificates and thereafter left as-is (collect/spend the dividends).

II do not charge for transferring certs in to a Trading Account. I did it for this year’s ISA sub and in fact it is the balance that I would like to get back as a certificate. I trade hardly at all but for the £30,000 or so in my trading account it is scarcely worth the effort to extract that share.

Good thoughts though and I may change my mind.

Dod

[gryffron]

I hold one share in paper form with a drip set up and get an additional paper certificate twice a year fro the drip shares - no change since 2000.

My dad held paper shares with scrip dividends. Hundreds of certificates. More that 50 separate certificates for just one holding. Dozens missing of course. After his death I was on the phone speaking to eqiniti for an hour and half just reading off certificate numbers. Absolute nightmare. It would have taken a couple of minutes if they were electronic.
Hate to think how anyone could have calculated values if they were due CGT.

They’re all lodged in my nominee account now. The sooner paper certificates are banned the better for all concerned imo.

Gryff

[Dod101]

I hold one share in paper form with a drip set up and get an additional paper certificate twice a year fro the drip shares - no change since 2000.

My dad held paper shares with scrip dividends. Hundreds of certificates. More that 50 separate certificates for just one holding. Dozens missing of course. After his death I was on the phone speaking to eqiniti for an hour and half just reading off certificate numbers. Absolute nightmare. It would have taken a couple of minutes if they were electronic.
Hate to think how anyone could have calculated values if they were due CGT.

They’re all lodged in my nominee account now. The sooner paper certificates are banned the better for all concerned imo.

Gryff

That is no reason for abolishing paper certificates and anyway he was I am sure offered the opportunity more than once to consolidate them. You simply ignore the positive points already made?

Dod

[1nvest]

I hold one share in paper form with a drip set up and get an additional paper certificate twice a year fro the drip shares - no change since 2000.

My dad held paper shares with scrip dividends. Hundreds of certificates. More that 50 separate certificates for just one holding. Dozens missing of course. After his death I was on the phone speaking to eqiniti for an hour and half just reading off certificate numbers. Absolute nightmare. It would have taken a couple of minutes if they were electronic.
Hate to think how anyone could have calculated values if they were due CGT.

They’re all lodged in my nominee account now. The sooner paper certificates are banned the better for all concerned imo.

Gryff

A central registrar (Equitini) that lacks the capacity to quickly/easily cross reference a name/address to registered share certificates seems to me to be the failing there. Fair enough in a era of the central registrar using paper records/filing cabinets etc. inexcusable in a era of computers/databases where consolidation of multiple common (stock) certificate numbers being voided and transitioned to a single certificate (number of shares, average price paid per share) should rightfully be just a few button presses/mouse clicks. It's not as though someone dying and heirs having to do such consolidation is a exceptional/rare task.

[daveh]

I hold one share in paper form with a drip set up and get an additional paper certificate twice a year fro the drip shares - no change since 2000.

My dad held paper shares with scrip dividends. Hundreds of certificates. More that 50 separate certificates for just one holding. Dozens missing of course. After his death I was on the phone speaking to eqiniti for an hour and half just reading off certificate numbers. Absolute nightmare. It would have taken a couple of minutes if they were electronic.
Hate to think how anyone could have calculated values if they were due CGT.

They’re all lodged in my nominee account now. The sooner paper certificates are banned the better for all concerned imo.

Gryff

I don't disagree, it's my only paper holding and it's going to be a pain to sell or even transfer in due to all the certificates, but they are all stored together in one envelope. CGT wise it's not a problem as I have a spreadsheet with all the details recorded so I know the base price including the price all the drip shares were purchased at.

[1nvest]

A issue IMO is the same as for if hard cash were to be withdrawn (transition over to digital currency). When you have to rely on counter-parties who have a monopoly then they can levy costs/conditions that otherwise might not have been accepted given 'hard cash/certificates' alternatives. Digital money and nominee stock holdings are both forms of you lending to others, potentially at a cost rather than benefit. Hard cash and paper certificates in-hand, and others have to compete (more often pay you) in order to attract your 'trade'.

OK hard cash and paper certificates may likely become less/little used, but better the retention of that option rather than the total elimination. Freedom of choice, rather than dictate that you will use services who have a monopoly and hence have power/control. Acceptable maybe only if that control were in state hands, less so when its gifted to corporates.

[Steveam]

If people decide to swim against the tide and keep their paper certificates that’s fine but don’t assume that facilities like transfer in will continue at no cost. Were I redesigning my systems I might well decide that we get so few paper certificates each year that there’s no point facilitating them at no cost. Watch the availability/cost and make your decisions but don’t expect me and my broker to subsidise you.

I use a number of brokers and have no loyalty. I’ve moved holdings around in the past and expect I’ll do so in the future. No cost or low cost brokers are readily available. I don’t believe holding paper certificates would be a cost saving to me.

Best wishes, Steve

[1nvest]

If people decide to swim against the tide and keep their paper certificates that’s fine but don’t assume that facilities like transfer in will continue at no cost.

It is the same for cash, penalties (cost) for any that opt to swim against that tide. Corporates who benefit from securing a monopoly will of course push towards that, its up to the government/state as to whether that should be permitted or not via regulations. Failure by the state in that respect and many might opt not to lend to (support) the digital Pound, or digital shares, or digital bonds/Gilts, instead opting for alternatives that cut out the cost of the middle-man. In some cases a trickle can soon turn into a torrent, that could lead to some very interesting times.

I for one have already pretty much withdrawn support for the Pound, see it just as a transitional currency necessity as things currently stand. Only converting into Pounds as and when needed, converting out of it quite soon after receiving any or having any surplus. I'd be more than happy to sidestep that altogether.

[EthicsGradient]

Those who replied in this thread may be interested in this one: viewtopic.php?f=26&t=40597

It turns out the government Digitisation Taskforce had already produced its Interim Report in July 2023, before this thread started. And comments from the public must be in by 25th September - send them to digitisationtaskforce@hmtreasury.gov.uk .

https://www.gov.uk/government/publicati ... -taskforce
https://assets.publishing.service.gov.u ... report.pdf

[SalvorHardin]

I keep roughly 25% of my portfolio by value in certificated form (mostly investment trusts). This is primarily to diversify broker default and fraud risk.

If it comes to selling and the online brokers won't do transfers in, I'll sell through the full service broker that I've been using for several decades.

[doug2500]

It doesn't have to be paper or nominee although that's what the narrative has become.

CREST was the perfect answer, is used in other countries, has all the benefits of paper and digital and without the drawbacks of either. Brokers made it expensive, it used to be free.