The Basics of Share Registry: Definitions And Functions
Australia, the smallest continent in the world, is strategically placed for business within the Asia Pacific region. Australia’s time zone is also strategic since it bridges the gap between the closing hours of business of the U.S. market with that of the European Market. Thus, Australian cities such as Sydney and Brisbane, are chosen by large multinational companies to house their headquarters for their regional operations.
Most large corporations in Australia have one thing in common. Most of them are publicly traded, and they have shareholders. One corporation may have many shareholders, which means keeping track of all these shareholders and stocks may be challenging. A share registry in Australia is a third-party service provider who manages the shareholders’ list and their corresponding stock values.
What is a Share Registry?
When a company wants to sell shares, it must first conduct its initial public offering (IPO) on the stock exchange. The first shares that the company sells will be known as the primary market, in which the company will get its initial set of shareholders. After the IPO, the company may release more stocks to be sold to the general public. These stocks will then be referred to as the secondary market. As the company sells more shares, the number of shareholders will increase. With the different sets of shareholders having different stock values, the company may have difficulty keeping track of who owns them. The company then appoints a share registry to manage the list of its shareholders.
The functions of a Share Registry
It is the share registry’s responsibility to contact the different shareholders on behalf of the publicly-listed companies. If you take any share registry in Australia, it takes responsibility for accounting for each share’s ownership. Likewise, the share registry must also be responsible for enforcing any company’s restrictions in transferring shares from one owner to another. When there is a valid transfer of stocks, the share registry must update its list to reflect who the new owners are.
A share registry is also responsible for ensuring that the shareholders’ information such as their name, occupation, place of work, address, and how much they paid for their shares are true and valid. This validation of shareholder information is important to prevent fraud. A share registry will also be responsible for contacting the shareholders and distributing the cash dividends and the share dividends.
Using Share Registry Solutions
A share registry is an institution, usually a bank or a similar entity, that a public-listed company appoints to manage the list of shareholders and shares for them. Likewise, a share registry can be any company that specialises in managing shares and shareholders. With today’s advancement in computing technology, companies can hire a share registry that uses cloud-based applications to efficiently and accurately manage their stockholders’ roster.
A share registry is responsible for accounting for the outstanding shares with the authorised shares. It uses cloud-based applications which are more efficient in its shareholder management. With cloud-based share registry, company owners can access real-time data on shareholders on any device. Share registry also ensures no confusion with outstanding and authorised shares that a company sells to the general public. Authorised shares are defined as the total number of shares that a company can sell to the public, as stated in their incorporation articles. In the meantime, outstanding shares are the actual number of shares that have already been issued or sold to shareholders.
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