What does a share look like?
Investors who have grown up in the digital era usually hold shares in electronic form and may have never seen a physical share certificate.
Many investors do not hold their shares in paper form for the ease of transaction and storage. Physical share certificates need to be kept properly, and it is time consuming and expensive to reissue a certificate. When selling their shares, they also need to deposit the share certificates with the Central Clearing and Settlement System (CCASS) first, which is inconvenient.
Although it looks like an option of the past, there are some advantages of holding shares in paper form. Shares held in paper form are registered in the name of the investor or a designated nominee, and all communications from the company are sent to the shareholder. The shareholder may also attend shareholder meetings and vote on certain corporate activities.
On the other hand, shares held in electronic form are deposited into the CCASS and registered under the name of CCASS nominee (i.e. HKSCC Nominees Limited). This means that the shares are not registered under the shareholder’s name and the shareholder’s name is not recorded in the company’s register of shareholders. Shareholders have to contact the intermediaries if they want to receive information about the listed company’s corporate events or attend the shareholders’ meetings. Even if shareholders cannot attend the shareholders’ meeting to vote, they can still issue voting instructions to the intermediary, who will pass these instructions to HKSCC Nominees Limited.
Holding shares in paper or electronic form is a personal choice. If you prefer physical share certificates, make sure that they are registered in your name, so that the share registrar can send you dividends, shareholder’s circulars and any other corporate documents.
12 July 2024
