Shareholder Identification
Shareholder Identification (ID) is at the heart of any Investor Relations programme. Knowing your company's shareholder base is the most important tool to conduct effective IR, proxy solicitation and/or governance campaigns.
It enables peer comparison and helps to identify different types of investors, including activists, hedge funds and other non-traditional investors. It also keeps senior management up-to-date on major ownership trends.
Tools to identify shareholders
There are several tools to identify shareholders:
Public filings
The public information provided by the Netherlands Authority for the Financial Markets (AFM): the so called public ‘filings’. The first threshold for notifying the AFM of capital holdings and/or rights of control is 3%. The former (first treshold of) 5% is maintained as a second notification threshold. Relying on public filings alone provides a limited view. For Europe, public filings show approximately 50% of ownership at best.
Staying in contact
Daily contacts with investors and/or brokers from which information can be obtained.
Databases
Some IR service-oriented companies offer databases with information such as names of investors, fund managers, publicly available holdings etc. This can be considered as useful basic shareholder identification information.
Depositary bank information
Data from custodian banks can be obtained (‘depotbankenonderzoek’). Compiling the information gives the company a fair overview of who its shareholders are and gives insight in size, geographical spread and type of investor (institutional, retail or private investors).
Most companies hire a shareholder ID specialist to uncover their shareholders once, twice or four times a year or, where legislation enables it (for example in the USA, UK and in France), on a continuous basis: to ensure that companies have the most comprehensive and up-to-date view of their shareholders.
Corporate Governance Act
With the Corporate Governance Act that came into effect in the Netherlands on 1 July 2013, a company may request intermediaries to provide the names and addresses of those investors (with more than 0.5% shareholding) for whom they administer shares together with details of their positions. However, this can only be done in relation to an AGM or EGM. Also see: http://www.rijksoverheid.nl/onderwerpen/corporate-governance/corporate-governance-code.