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Tuesday, 23rd April 2024
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Share certificates soon to be a thing of the past Back  
A working group has been established to commence the process towards dematerialisation of the securities of listed entities in Ireland. Dematerialisation involves the removal of paper certificates from the issuance, securities trading and post trade processing cycles of securities admitted to trading on the Irish Stock Exchange (ISE). The move follows developments in other markets, with the UK now currently on track to achieve dematerialisation of its market.
AAccording to Brian Healy, director of trading and regulation with the ISE, and chair of the group, the Dematerialisation Implementation Group, paper is now ‘out-moded’, and the disadvantages of the current system involving share certificates, are mainly ‘the inefficiencies and costs associated with the cumbersome process of managing paper-based transactions and the risks of fraud from misplaced and stolen share certificates’. Ahead of the creation of a ‘Single Settlement Engine (SSE)’ in Europe, which is to be delivered by 2006. Healy says that the issue of dematerilaisation must be dealt with immediately so that Irish market practices are in line with those in the other markets. While the industry are 100 per cent behind the proposals, there is a concern amongst investors who may have a preference for holding shares via a share certificate. It is expected that dematerialisation will be introduced by Ministerial Order, and the group hope it can be achieved in 2005.

The group’s members are as follows: Pauline O’Donovan, Matheson Ormsby Prentice, Joan Moran, BOISS, Kevin Pepley, Davy Stockbrokers, Eileen Kelly, Davy Stockbrokers, Albert Farrell, Computershare, Pat O’Donoghue, Capita Corporate Registrars, and Neil Colgan, CRH. Representatives from both the DETE and IFSRA, are expected to join the group shortly.
See also p. 7

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