Company Law Forum - Explaining Companies Act 2006 - Prudential plc - Access to Share Registers for Proper Purposes

Prudential plc - Access to Share Registers for Proper Purposes

Written by Susan Henderson

Tuesday, 13 November 2007

What does the Act Say?

S 116-119 now make inspection or requesting a copy of a share register (by members or others) subject to a “proper purpose” test.

S 116, anyone requesting access to a share register needs to provide details of their name, address and organisation and the purpose for which they require the register, as well as contact details of anyone to whom the information will be disclosed.

S 117, companies required to provide a copy or allow inspection within 5 days of receipt of the request or else they must apply to the Court on the grounds that the request is not for a proper purpose.

No definition given of “proper purpose” although ICSA Guidelines do give some examples of proper and improper purposes.

This is effective from the date of submission of the company’s annual return following 30 September 2007.

Proper Purposes

Checking own personal details or that of a deceased shareholder

Contacting fellow shareholders about company related maters eg. exercise of rights, requisitioning meetings

Regulatory or statutory requests

Takeovers / bidder having access to register before bid announced

Improper Purposes

Identity Fraud

Threaten harass or intimidate members

Credit or identity checks

Commercial mailings

The Practicalities

5 day turn around is very tight window for companies to comply

Need to take care not to infringe member’s data protection rights

Recommend that conditions are imposed when register provided for research purposes for example that information not passed on to third parties or shareholders contacted directly.

Who is going to admit they require the information for an improper purpose?

Which company will be the first to oppose a request in the Courts?

What Prudential is Doing

Wait and see when we start to receive requests.

Preparing response letter setting out conditions for granting access to the share register

Will exercise rights under S 116 to request details of all individuals to whom the information might be passed

Unlikely to go to Court unless there is a very clear “improper purpose”