Share registrars maintain the shareholder databases of publicly quoted companies. They act as agents for quoted companies, updating the share register of the client company when shares are bought and sold by individual shareholders or institutional investors. Every publicly quoted company has a share register - a list of the names of its shareholders and the numbers of shares they hold. Up until quite recently many publicly quoted companies managed their own share registers, employing staff to update the details regularly
Nowadays the registers of most Irish public companies are managed by either of the two main share registrars in the Irish market - Computershare or Capita. Computershare's clients include Eircom, AIB and Bank of Ireland while, in addition to CRH, Capita acts for Irish Life & Permanent and Jefferson Smurfit.
In the event of a rights issue by a client company, the registrar must calculate the number of shares each shareholder is entitled to and the cost of taking up those rights. This is based on the information on the share register at a set date.
For example, in a one-for-four rights issue such as the CRH case, a shareholder owning 5,000 shares would be entitled to 1,250 rights shares. At the CRH rights price of #10.50, it would cost the shareholder #13,125 to take up their full entitlement. The registrar then sends out a form to each qualifying shareholder setting out their share entitlement and the cost involved. Shareholders must send this form back to the registrar to exercise their rights. They can opt to take up their full entitlement, part of their entitlement or let the offer lapse.
The registrar must maintain an ongoing tot of the replies from shareholders and the funds received and must update the share register when the rights shares are allocated.
When the offer closes, the registrar informs the company client and its stockbroker/corporate finance adviser on the extent of the take-up of the offer by shareholders from this tot. The success of the rights issue is judged on the extent of the take-up.
Registrars say they are paid a fee per item handled and not a percentage of the funds raised. Registrars generally have professional indemnity insurance to cover losses to clients.
