JSE Investor Services expands client base as business gains momentum
The JSE Investor Services (JIS), a wholly-owned subsidiary of the Johannesburg Stock Exchange (JSE), is growing market share of its registry management and shareholder communication business while helping companies trace shareholders or beneficiaries of unclaimed benefits.
JIS is a leading transfer secretary provider with over 2,5 million shareholder records under management. JIS maintains the share registers of listed and unlisted companies including JSE Top 40 companies.
With the recent addition of Northam Platinum, Growthpoint Properties, Supergroup and Exxaro as clients in the transfer secretary business, the company’ market share has now grown to 27%.
The registry platform caters to the uniqueness of South Africa’s infrastructure and gives it the ability to quickly adapt to client requirements. This, overlaid with artificial intelligence and the potential for blockchain infrastructure, positions JIS favourably in keeping ahead of client needs.
“The market has responded positively to our ongoing focus on delivering the best service and solutions as well as competitive and transparent pricing,” says Carol Crozier, CEO of JIS.
A growing shareholder base
Due to the fast-growing number of non-professional investors, commonly referred to as retail investors, the transfer secretary role is becoming increasingly critical. The growth is primarily spurred by online brokerage firms, and investment accounts through financial institutions such as banks, and fractional investing. A fractional share is a share an investor can own in a company that is less than one full share.
In a post-Covid-19 world, hybrid AGMs have become a norm
The transfer secretary business entails the management of a company’s shareholder registry, assisting with voting and proxy procedures during Annual General Meetings (AGMs), posting official notices for companies and managing dividend pay-outs.
JIS hosts virtual AGMs for clients and facilitated the first virtual AGM in South Africa during the lockdown in 2020.
“We are seeing a trend of companies adopting virtual engagements and hybrid meetings, where there is a combination of in-person and virtual participation. We believe that this is the way forward as companies reach far more shareholders by enabling virtual engagement and allowing the in-person participation if shareholders choose to do so,” Crozier explains.
Unclaimed benefits
Unclaimed dividends for JSE listed companies including those that self-administer total R1.5 billion. About R167 million relates to Broad-based Black Economic Empowerment schemes of listed companies. Tracing beneficiaries is an enormous challenge.
Unclaimed benefits have mounted over the years, because in the past, when purchasing shares, all that was required was a postal address. No ID numbers were required at that point which means that if the shareholder moved house, and did not update their details, they became a lost shareholder. Companies prefer to reunite shareholders and beneficiaries rather than for the unclaimed assets to be forfeited. Some listed companies do not make provision for the forfeiture of such dividend payments, while other companies’ unclaimed dividends are forfeited after 12 years.
Digital shareholder communication
JIS has developed a web-based solution through which companies can communicate directly with shareholders called ShareHub. ShareHub is a centralised shareholder communication and filing platform created to enable companies and empower shareholders. Leveraging the advantages and everyday benefits of digital communication technologies, it allows shareholders to maintain contact details and digitally access key information about upcoming events and initiatives such as AGMs. So far, about 350 000 people have signed up.
“JIS has diversified its offering with products and services that bring added value, cost reductions and closer connections with shareholders. We are thrilled that we can provide much-needed shareholder education for retail investors. There are also several self-training modules available on the ShareHub platform,” Crozier concludes.
