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Navigating Global Shareholder Disclosure Challenges with Centralised Digital Solutions
Shareholder disclosure ensures transparency between issuers and investors, allowing issuers to understand their shareholder base, track ownership changes, and engage effectively with investors.
This process is critical during general meetings, enabling issuers to identify and engage key investors for improved solicitation outcomes.
At its core, disclosure regimes facilitate shareholder communications while safeguarding the rights of both parties and helping to combat market abuse and financial crimes.
The process involves a chain of intermediaries, such as custodians, banks, and brokers, who provide the required information according to specific disclosure rules.
However, current disclosure practices present significant challenges that make compliance cumbersome for responding participants.
This article explores those shareholder disclosure challenges and sheds light on how centralised, digital solutions like Proxymity have solved those issues to support intermediary organisations.
Shareholder disclosure challenges faced by intermediaries across markets
1. Varying market regulations
Disclosure regulations differ widely across jurisdictions. For example, issuers in the UK, Ireland, Hong Kong and Australia can request shareholder identity regardless of holding size, markets like Austria and the Netherlands, set a minimum threshold of 0.5%.
Response deadlines for these requests may vary. In Australia, intermediaries typically respond within two business days, while in the EU responses must be same day for requests received prior to 4pm local time and by 10am the next day for requests received after 4pm local time. These variations make compliance complex, particularly for entities with cross-market holdings.
2. Verification of authorised disclosure requests
Verifying disclosure requests can be complex and error-prone due to varying market regulations.
Key authentication documents for responding banks and brokers to review include the Official Issuer Request Letter, , Proof of Regulatory Basis, Letter of Authorisation and Intermediary Agreements. Each of these must be reviewed before processing to ensure data privacy, adding time and cost.
Without automation or other regtech solutions, this process remains inefficient and prone to errors, increasing the risk of regulatory violations.
3. Data management and communication complexities
Regulatory reporting requires disclosures in multiple formats such as PDF, email, XML, proprietary portals, and antiquated forms, driving up costs, adding manual work, and increasing errors.
The lack of standardised data exchange today leads to over-disclosure, inefficiencies from inconsistent formats and filing delays.
These challenges raise operational pressures, increase costs, and risk reputational damage to the responding bank or broker.
4. Multi-party involvement and process delays
The shareholder disclosure process is fragmented, involving multiple intermediaries passing requests through the chain:
• Issuer submits a request → Sent through intermediaries (e.g., issuer’s CSD, sub-custodian banks)
• Intermediaries relay the request → Each intermediary forwards it to the next intermediary holding the security
• Responses go directly to the issuer → Issuers must manually piece together data from various intermediaries within the chain of custody
• Updates/cancellations add complexity → Changes may be submitted throughout the disclosure period
This inefficient process leads to miscommunication, errors, and delays. With disclosure deadlines ranging from the same day to 10 days, manual workflows make timely compliance difficult. Constantly chasing intermediaries throughout the disclosure period hinders the issuers’ ability to engage shareholders effectively.
5. Adapting to evolving market regulations
Regulatory frameworks continue to evolve, adding further compliance pressure on financial intermediaries. The Shareholder Rights Directive II (SRD II) in the EU introduced stricter shareholder disclosure requirements, forcing market participants to overhaul their reporting processes.
Intermediaries operating in multiple jurisdictions must continuously monitor regulatory updates, assess compliance impact, and update their processes accordingly which becomes overwhelming and costly without centralised solutions.
6. Legacy systems are inadequate and inefficient
Legacy systems for shareholder disclosures are slow, error-prone, and heavily manual, making it difficult for intermediaries and issuers to maintain visibility, audit responses, and ensure compliance across markets.
Without automated validation, intermediaries must manually process requests, increasing errors, delays, and costs. Disclosures can drag on for weeks, risking fines and reputational damage.
Using multiple solution providers for different steps and markets adds complexity, making adoption, day-to-day management and oversight even more challenging.
In a recent interview with PostTrade 360, Proxymity’s COO and Co-founder, Jonathan Smalley, highlighted this challenge as a common problem among custody clients.
“It is pretty common for all sorts of reasons for custody clients to use a range of providers, but this can present a challenge for day-to-day management and oversight as well as introducing operational complexity where proprietary systems are in use or providers have deviations or variance in service levels.”
The future: centralised, digital shareholder disclosure solutions
To overcome these challenges, financial intermediaries need a real-time, automated approach to shareholder disclosure. A centralised digital platform like Proxymity Shareholder Disclosure streamlines global disclosure processing across the custody chain.
With Proxymity Shareholder Disclosure, intermediaries benefit from:
• Standardised data exchange across jurisdictions with secure API and ISO messaging
• Automated checks and real-time processing to reduce manual effort and costs
• Real-time request tracking and compliance monitoring
With this digital platform, complete responses are sent to the requesting issuer or issuer agent within minutes through automated verification and processing.
To learn more about the platform’s capabilities, reach out to our experts today.
The path to simplified compliance
Manual processes can’t keep up with evolving regulations. Shareholder disclosure is crucial for market transparency and compliance.
A centralised digital solution streamlines disclosure, reducing costs, ensuring compliance, and easing operational burdens for intermediaries.
Learn how Proxymity Shareholder Disclosure is transforming the process for custodians, banks, and brokers.