Share register rule change queried
Proposed restrictions on the right to access company share registers could be used to hinder legitimate shareholder lobbying, the Shareholders Association has warned.
As the law stands, listed companies must provide copies of share registers to anyone who requests them. But new regulations contained in the second phase of the Financial Markets Conduct Act, due to come into force on December 1, will require anyone requesting copies of share registers to give reasons for their request.
If companies object to a request they will be able to apply to the Financial Markets Authority (FMA) for permission to decline the application.
Shareholders Association chairman John Hawkins said the association was concerned that this process, which will take up to 10 working days, could be abused.
Hawkins said there was often a short window between the association learning about an issue and shareholders voting on it.
The association was concerned that unscrupulous companies could routinely refer share register requests to the FMA as a delaying tactic. "We see the possibility of some companies dragging their feet with this," Hawkins said.
But FMA head of compliance monitoring Elaine Campbell, said that the way the Act was drafted meant that it was unlikely share register requests would be unduly delayed.
The authority would not be approving requests, it would merely be permitting companies to decline requests in some circumstances, she said.
However Campbell said the authority would intervene if the process was being abused.
"If we do see companies doing that, we'll certainly be having a word with them," she said.