share trading how technology provides certainty to share plan participants

Share Trading – How Technology Provides Certainty to Share Plan Participants

Anna Macfarlane, Head of Dealing at ComputershareDominic Newby, Client Relationship Director at Computershare

ifs ProShare Employee Share Plans Conference 201210th October 2012

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Agenda

› The old world of employee plan trading

› What’s causing the change?

› Benefits of technology

› The challenges

› To summarise

› What the future may hold?

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Once upon a time...

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I wonder if my trade was placed?

Old Trading Timescales

› -2 days Sale / exercise form put in post

› Trade Date Shares sold

› T + 2 Contract note / confirmation letter sent by

post

› T + 3 Employee received confirmation of trade

› T + 5 Administrator receives sale proceeds

› T + 5 Sale proceeds released to employee by

cheque

› T + 7 Employee receives cheque

› T + 10 Employee manages to get to bank

› T + 13 Proceeds clear into employees personal

account

Current Trading Timescales

› Trade Date Employee initiates sale instruction online

› Trade Date Shares sold

› Trade Date Employee e-mailed confirmation of trade going

to market

› Trade Date Employee e-mailed confirmation of trade fill

› T + 1 Contract note available online

› T + 1 BACS / International payment initiated

› T + 3 Administrator receives sale proceeds

› T + 3 Sale proceeds received by employee (UK and

most international jurisdictions)

How regularly do you undertake transactions online (banking, shopping etc)?

1. Daily25%

2. Weekly25%

3. Monthly25%

4. Never25%

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When did you start to regularly use the internet to bank, shop etc?

1. In the last two years20%

2. In the last two to five years20%

3. In the last five to ten years20%

4. More than ten years20%

5. Never20%

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Changing Attitudes to the Internet

Benefits to Share Plan Participants

› Control

› Certainty

› Flexibility

› Transparency

What % of trades received in real time are limit orders?

1. Up to 10%25%

2. 10% to 25%25%

3. 25% to 50%25%

4. 50%+25%

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Speed of trade fulfilment - How long typically between trade receipt and fill?

1. Under five seconds25%

2. Five to ten seconds25%

3. Ten to twenty seconds25%

4. Over twenty seconds25%

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Benefits to Employers and Administrators

› Reduced Processing Risk

› Reduced HR/Co Sec Resource Requirement

› Certainty

› Transparency

› Efficient and Accurate Tax Calculations

Challenges for Administrators

› Technology Investment

› Global Payments

› Resources/Timezones

› Regulation

Regulatory Environment

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To Summarise

› Choice of when to trade

› Choice to choose their acceptable price

› Comfort that price is checked vs. market

› Confirmation of trade placed into market and when

filled

› Quick access to proceeds to their personal account

either in UK or internationally

› Access to required contract notes from trades for

past 10 years

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What the future may hold

› Dematerialisation

› Shorter settlement

› More regulation

› An App

› Tax withholding accuracy