Govt legislation misfires on share register changes

The Federal Government appears certain to have to go back to the drawing board on changes to the Corporations Act which would have compelled publicly-listed companies to substantially rely on emails for communications with their members.

AMP Limited has already used a submission to the Senate Economics Committee inquiry into the new legislation to state that it will likely be in almost immediate breach and now Computershare has reinforced the magnitude of the issue saying it hold less than 50 per cent of the valid email addresses for its customers.

“Computershare administers approximately 11 million securityholder accounts in Australia, and despite many of our issuer clients expending considerable effort to increase their capacity to communicate with securityholders electronically, we hold valid email addresses for approximately 50 per cent of those accounts,” Computershare’s submission said.

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“Our experience therefore does not support the position that ‘most’ communication occurs in this manner,” it said, adding that “mandating that issuers include email addresses on the register…. will therefore result in issuer non-compliance with the law, regardless of issuer best efforts”.

The Australian Institute of Company Directors (AICD) expressed similar concerns, noting that not all company members have an email address “nor would all members with emails necessarily be willing to provide it to a company if asked”.

“Given this reality, and that companies have no statutory power to compel members to provide them with this information, it would be unjust to expose companies to liability under s 169 of the Corporations Act should they be unable to obtain an email address of one or more of their members,” it said.

AMP Limited has told the Senate Committee that it faces almost immediate breach of the new legislation because it only holds email addresses for 34 per cent of its 770,000 shareholders.

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