By SIMON HENDERY
Thousands of investors have yet to sign up for the common shareholder numbers they will require under a new stock exchange registration system which comes into force on July 1.
The numbers (CSNs) replace multiple registry-issued shareholder numbers, and are intended to simplify trading through the Stock Exchange's
faster trading system.
Access Brokerage marketing manager Peter Hansen said telling clients about the need to apply for a CSN had been "an administrative nightmare."
A significant number of shareholders had not yet completed the registration process.
The exchange has asked brokers to replace their clients' existing registry holder numbers ith a single CSN, which will be universal for all share trades, regardless of who administers the traded company's share registry.
Several brokers have had to employ extra staff to write to clients seeking details of holdings and holder numbers.
Independent sharemarket analyst and Business Herald columnist Brian Gaynor says many brokers are abusing the process by using it as an excuse to build a database of clients' holdings.
A CSN application form sent to JBWere clients asked them to list the number of shares held in each company, although this information was not required.
JBWere's head of private stockbroking, John Cobb, said he did not know why the size of the holding had been included on the form.
But clients who wanted to keep details of their holdings private were not compelled to provide the information, although it would be kept confidential if they did.
He said most clients were happy to give their broker details of their portfolios.
"If a client is asking for investment advice, clearly knowing what investments they hold is paramount to being able to provide appropriate investment advice."
Stock Exchange managing director Bill Foster said the exchange would be concerned if brokers were using the move to CSNs as an excuse to get information from clients which they would normally not receive. But the exchange had received no complaints along those lines.
Mr Foster said shareholders who did not have a CSN by July 1 would be able to sell shares using existing holder numbers.
Brokers would also be able to issue CSNs "on the fly" if necessary to clients who wanted to buy shares after that date.
Investors should apply for a CSN through one broker. After applying through one broker, shareholders who traded with more than one broker should ignore further requests from others, Mr Foster said.
