As companies expand their equity plans across the globe and further into their organizations, a host of issues can crop up related to transnational settlement and getting cash into the hands of global participants quickly and hassle-free. But these challenges aren't exclusive to cash transactions. Moving participant shares can be just as challenging for a global organization. Our panel of experts will continue the discussions and look at the challenges that can arise when moving shares between jurisdictions. Learn how to avoid those roadblocks and simplify global share movement and pin down that elusive equity for your participants. This dynamic panel includes Patrica Landry from Solium, Chris Mowatt from Barlcays, and Ingrid Friere from HP.
1. Show Me the Money and Show Me the Shares:
Simplifying Share Movement for Your Global
Participants
Patti Landry, Sr. VP, Core Market Segment Leader, Solium
Chris Mowatt, Director, Global Stock & Reward Services, Barclays
Matt Gilliam, Director, Relationship Management, UBS Financial Services
Ingrid Freire, Director, Global Equity Plans, HP
3. What is the Point to Operating your Plan
• New hire incentive
• Employee ownership
• Broad-based compensation
o What is the landscape of your employee base
o Are there offices in those jurisdictions
o What mechanism are you using at vest
4. Issuer Challenges
with Share & Cash Movement
Being a detective
Assisting employees with
undelivered money
Educating employees and
assisting them with bank and
brokerage codes
Cash
Ensuring the shareholder can
hold stock in their desired
location
Brokerage, Direct Registration
or Stock Certificate
• New regulations are complicating
the matter for holding shares in the
US
• Escheatment complications and
shareholder education
Shares
6. Checks
• Checks can be a good
solution for local and low
volume payments
• Possible drawbacks:
– They are not a good
vehicle for moving
money across borders
– They can be lost or
stolen in the mail
– Delivery delays
– Check fraud
6
7. Wires
• Good solution for
international low to
mid volume payments
• Most traceable of the
payment methods
• Generally more
expensive than other
delivery methods
7
10. Local Disbursements
• Good solution for
international higher
volume payments
• Low-cost electronic
disbursement
• No ability to track
payments through the
system
– If the amount is
larger or tracking is
needed, a wire
would be better
10
12. Payroll
12
Currency control functionality could be
leveraged where a trade needs to be
executed
There may be some situations in which
disbursing through payroll makes sense
Generally causes more work and
complexity for the issuer
15. Share Transfer
• Most common method of transferring shares
between broker/dealers, banks & trustees.
• Utilizes the Depository Trust Company
Transfer System (DTC)
• Items to Consider:
– Participant may not have a brokerage
account open at another firm
– Can be used to transfer to same name
account or as a gift
– Shares must be fully tradable and
fungible to qualify for DTC transfer
16. Direct Registration
• Replaced the common usage of
physical certificates
• Shares are registered in same name
at the Transfer Agent
• Instruct Transfer Agent how you
would like to receive dividends (if
applicable)
• Viable solution for a participant who
may not have an alternate brokerage
or bank account in which shares can
be held
• May cause some delay in liquidation
of shares
17. Local Deposit
• Maintain shares received at captive broker
or Agent in place
• Minimal movement of shares
• Shares are readily available for liquidation
• May require additional paperwork to
maintain shares or to process liquidation
• Due to local regulations, may not able to
hold shares long in brokerage account
• Shares may have restrictions placed
based on company trading window
18. Trustee Deposit
• Shares are sent directly to a non-US
trustee for deposit and tracking
• Assists in tracking of share
liquidation for local tax purposes
• Samples include: Israel and French
trustees
• May allow for participants to hold
long shares without forcing
liquidation or tedious reporting
• Issuer and Service Provider (if
applicable) will work to deliver the
shares via DTC or DWAC to Trustee
20. Key Differences
• Not just electronic –
some people still hold certificates!
• Held on the register by a Registrar
• Entitled to dividends paid by cheque
• Not bearer certificates but difficult &
• expensive to replace
• -Trading more expensive and takes longer
21. Electronic Holdings
• Shares held in CREST– by a stockbroker who is a
member of CREST and acts as a nominee
- Same rights as an ordinary shareholder
- Dividends direct to account
- Easy and quick to trade/ transfer
electronically (Euroclear)
22. Transferring UK Stock
• This is “arranged” by your broker...more proactive
than DRS
- Contact made between sending &
receiving brokers
- Transaction and settlement dates agreed
- Shares posted to CREST must be collected
by receiving broker
23. Things to Consider
• Know your employees
• Simple: Nominee account with your administrator
o Keeps everything in one place
o No personal broker required, good for all employee plans
• Advanced: Allow transfers to private brokerage accounts
o May be a requirement at exec level
o Some education required to receive UK stock
• Stop and think again: Sending share certificates overseas!
o Just not a good idea!
24. Other considerations:
• Is your company multiple listed? ADRs to settle in
US?
• Dealing with fractions
• Transfers to other savings plans (SIPP / ISA in the
UK)
26. CHESS Transfers
• CHESS – Clearing House
Electronic Sub-register
System
o Accounts are known as HIN’s (Holder
Identification Number)
o Instructions are sent to custodian
o Counterparty needs to issue matching
instructions to receive shares
§ Required fields: receiving HIN, security
quantity, security identifier
27. HIN: Holder Identification Number
• Can hold many different securities
• Do not hold cash but can be linked to a bank account
28. CHESS Transfers: ASTF
• Australian Standard Transfer Form
o Also called an ASTF
o Form that helps the broker know how to issue matching
instructions to CHESS so that the transfer completes
o Most brokers will require an ASTF to receive shares
o Some brokers will require an original signed ASTF, and
others will be fine with an email or phone request
o Must be completed accurately
29. CHESS Transfers: The Frustration
• Electronic share delivery through CHESS is not very
complicated at its core, but the ASTF makes it a bit
complicated.
• This is because it generally provides an obstacle for the
participant as they have to fill it out accurately and send
the original via post.
• If anything on the ASTF is incorrect, a new form must
be filled out by the participant and posted again which
can prove a frustrating process for some participants.
31. SRN: Shareholder Reference Number
• Shareholder Reference Number,
similar to DRS
• Only one security is associated
with a registry
• SRN’s are identified by number,
name and address
• SRN’s do not hold cash but can
be linked to bank accounts
32. SRN: How does it Work?
• If mismatch occurs a new SRN is
created in the participant name
• The Registry does not need to have
matching instructions to receive and
allocate shares
• They may reject for a mismatch in
postal code but this can be
corrected fairly easily
33. SRN: Relative Simplicity
• Simpler than HIN transfers and
the errors are clearer
• No ASTF’s are required to
transfer to an SRN
35. Thank You Thank you for attending GEO’s 17th
Annual International Conference
in Boston. We hope you enjoyed this
session.
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