ZEDRA extends its offering with the Corporate Sponsored Nominee service

A Corporate Sponsored Nominee works by removing the employee shareholders’ names from the main register and holding them together in the nominee company’s name (ZEDRA Trust Company (Guernsey) Limited).  ZEDRA as nominee then maintains a separate register of underlying individual investors behind the scenes. Employees participating in the Nominee arrangement continue to receive dividend payments, the option of dividend reinvestment, annual reports and can also vote at the Company’s general meetings.

We have clients who offer a Corporate Sponsored Nominee to its employees as it is a convenient way for individuals to manage their shareholding without the need for a paper share certificate and allows them online access to statements and real time trading.

We are experiencing an increase in the number of enquiries with regards to the provision of a Corporate Sponsored Nominee to assist our listed clients with the Investor Association (IA) Shareholding guidelines for AGM voting. The Shareholding guidelines have recently provided further guidance on what shares can count and also investors’ expectations that post-employment shareholding periods apply for two years post-employment as a minimum. As a result, many of our clients are considering establishing a trust or nominee arrangement in which the shares can be held to satisfy the IA guidelines.

We work with private companies who tend to offer a nominee service as it removes the requirement for paper certificates which can be an administrative burden and also allows access to an online share portal, which provides an automated service to manage internal trading windows, integrated payments and a centralised document depositary. We also support private companies’ transition from pre to post IPO by using the online portal to manage this process to make it as seamless as possible for employees who will be receiving shares.

The team has worked with ZEDRA colleagues in Singapore on the establishment of a nominee arrangement for a Company that wanted to offer its employees the chance to become shareholders, as there is a statutory limitation on the number of shareholders in that jurisdiction. At the heart of most of these transactions is the desire by the company for its employees to become shareholders and enjoy in the success of the business.

As different types of businesses examine how they can use a nominee or an employee benefit trust we are expanding our knowledge and expertise in this area. Our team can offer practical insight and would be pleased to have an initial conversation to discuss your situation and requirements.

Please contact Elaine Kennedy to discuss further.