But, this is totally not what the real question is about....
The question is, when you purchase a share, let's speak about whole shares, who owns it?
When it comes to nominee accounts, there are two types of ownership:
1. The legal owner - the person or institution in whose name the share is registered
2. The beneficial owner - the person or institution who benefits from that share and is appointed by the legal owner
You are not the legal owner of the share, only the beneficial owner. The share is not registered in your name. You only benefit when it is sold or dividends paid.
The only reference to you as beneficial owner is in GT247.com's own share register. Nowhere else.
This is what is is about. Actually, EE makes this quite clear on their FAQ's and Terms as well.
http://www.strate.co.za/our-services/dematerialising-your-shares
A controlled broker client is one who elects to keep his shares and funds in the custody of his stockbroker and therefore indirectly the stockbroker’s chosen CSD Participant. Owing to the fact that CSD Participants are the only market players who liaise directly with Strate, all brokers must have accounts with CSD Participants and communicate electronically with them.
A controlled client deals directly and exclusively with his broker and his regular share statement comes from his broker. For those who already have a relationship with a broker, it is recommended that you verify whether your broker mandate has been updated in order to render it valid for settlement in the Strate environment.
A non-controlled broker client is one who appoints his own CSD Participant to act on his behalf. The investor surrenders his certificates and opens an account with his selected CSD Participant while dealing with his broker only when he wants to trade. He would have to provide the broker with the details of his share account at his CSD Participant. A non-controlled client receives his share statements directly from his CSD Participant.
Must I complete an application form/contract with my selected agent?
Once you have decided which category you would like to be in, you should approach your selected CSD Participant or stockbroker. You will be required to complete a client mandate that will allow you to define more closely the kind of relationship you elect to conduct with your agent. When opening your account, the CSD Participant or broker will capture all share information as well as any pertinent personal details into digital format within Strate, the CSD.
How do I ensure that my agent does not take full control over my portfolio?
It is advisable to define - by means of your mandate - the level of control your CSD Participant/broker has over your portfolio. Certain shareholders may wish to empower their agents to trade, make corporate action decisions etc. on their behalf. This is known as discretionary control. Other shareholders may elect to remain in complete control of their portfolio. They would be classified as non-discretionary clients. Issues such as these should be discussed with your stockbroker and recorded in your mandate.
Will I still be able to register my shares in my own name, or will my selected agent insist on registering my shares in his nominee name?
Stockbrokers are obliged to register clients’ shares in their nominee name. Of the nine CSD Participants, a select few offer ‘own-name registration’. All other CSD Participants will automatically register your shares in their nominee name and investors are encouraged to enquire accordingly.
If my agent registers my holdings in a nominee name, will I cease to receive information from the companies in which I hold shares?
The revised JSE listing requirements dictate that issuers are obliged to distribute company information to all beneficial shareholders who wish to receive it, irrespective of how their shares are registered. As such, there will be a designated field on the mandate you sign with your selected stockbroker or CSD Participant, which gives you the option of electing to receive such information from the company. So, if you would like to receive annual reports etc., it is imperative that you indicate this preference on your mandate.
If my shares are going to be registered in the nominee name of my stockbroker, I want assurance that my stockbroker has financial integrity and that my portfolio is secure in the name of his nominee company. How do I establish this?
For this very reason, the JSE has established a set of criteria with which member firms will have to comply in order to be eligible to hold nominee registers in the Strate environment. These entry criteria include issues such as internal controls and capital adequacy requirements. This should give investors the peace of mind that the member firms holding their assets are indeed viable financial institutions.
How will I receive my dividends under the new system?
Dividends will be transferred electronically into your CSD Participant/broker account on the due date.
