What Company Registrars Do and How Company Registrars Affect the Shareholder

Every public company appoints a registrar that maintains the register of its shareholders. Some companies set up a registrars' department in-house, which means that dedicated internal staff manage the register of its members. Such internal registrar may also take up mandates from other public companies to serve as registrar to them.

However, many more public companies out-source the registrar function to specialised registration companies. This allows such public companies to focus on their core business interests, while professional registrars manage their resgistrar functions. A good reason for this is that the registrar function is a specialised one, requiring professional training, expertise and experience and could best be left to experts to handle.

Ordinarily, all of this shouldn't border you, but as a shareholder, you will interface with the registrar somehow, someday. In fact, sooner or later, you will need to personally interface with the resgistar, because share transaction issues within the purview of the registrar, are bound to arise. So, it's good you know a bit about them and what they do that might affect you.

What the Registrar Does, Generally
Primarily, he maintains the register of members of a company. As indicated earlier, he might actually be maintaining several registers of several public companies. Each register of members, you can imagine, is extensive. Realise that for major companies, we are talking of huge numbers of shareholders here. That membership also keeps changing, possibly each day, as shares are bought and sold in the secondary market.

If I sell part of my shares in Nestle Plc to you today, my holding reduces, while yours increases, or, if you were not hitherto a shareholder, your name has to get into the register. The registrar ensures that these movements are constantly updated. In effect, he has to have a current record, at any point in time, showing who owns what units of shares of the particular company, notwithstanding that this ownership is permanently fluid. Ownership is fluid becuase shareholders are buying and selling all the time, meaning a constant movement in shareholding positions. The registrar has the herculean task of ensuring that those movements are accurately captured and kept up-to-date. If a dividend is declared, for instance, you want to be sure that it goes to the rightful owner, which is the name currently on the register. If that register is not accurately updated, you can see money, or bonus shares being channeled to the wrong beneficiary. You see how important that job is?

They also process the declared dividends and bonus issues, preparing each shareholder's cheque (dividend warrant) or e-dividend, bonus certificate or e-bonus and ensuring that each person receives his proper entitlement. Similarly, the annual reports and accounts of the company are distributed to members by the registrar. When new share issues are made by a company, the registrar is also in the thick of the collation, allotment and issuance of certificates to the subscribers.

For You, Meet The Registrar

• He keeps your account updated, as stated above and sends your dividend or bonus, which may be directly credited to your bank account and CSCS (Central Securities Clearing System) account respectively, if you have executed e-payment mandate..
• When you have to sell your shares or lodge with the CSCS, the certificates go to the registrar for verification. It has to be confirmed that the shares rightly belong to you, and as you already know, it's the registrar that has the up-to-date register of members of the company (that is, the shareholders). If your signature is deemed irregular, you have an issue to settle with the registrar which may ultimately require an indemnity from your banker.
• If you lose your share certificate, you have to go to the registrar for a replacement. There will be conditions to meet, but you don't have any choice, do you?
• If you fail to receive a dividend cheque or a bonus or other share certificate, you will have to settle that score with the registrar. Trust, though, that if the records confirm your claim, the registrar will surely re-issue to you.
• You delay in presenting your dividend warrant for payment and it gets stale, you have two choices - forego your income or spare time to see the registrar (or send your stockbroker) to revalidate it.

Most registrars' offices and processes are gradually getting a face-lift, with significant automation here and there. So, dealing with these issues is becoming easier by the day. A visit to any registrars office will however show you that a lot of problems of the nature listed above are faced by various shareholders all the time. Some times, you will be alarmed at the crowds you find in those offices. Hopefully, the automation of processes will be fast-forwarded. Until then, be prepared for a long queue when you have to take up any problem with any registrar.

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