Show Me the Money and Show Me the Shares

Show Me the Money and Show Me the Shares: Simplifying Share Movement for Your Global

Participants

Patti Landry, Sr. VP, Core Market Segment Leader, Solium Chris Mowatt, Director, Global Stock & Reward Services, Barclays

Matt Gilliam, Director, Relationship Management, UBS Financial Services Ingrid Freire, Director, Global Equity Plans, HP

Agenda

• Panel Introductions • Operating your plan successfully • Pitfalls of moving money internationally • Share movement around the globe o USA o UK o Australia

• Questions

What is the Point to Operating your Plan

• New hire incentive • Employee ownership • Broad-based compensation o What is the landscape of your employee base o Are there offices in those jurisdictions o What mechanism are you using at vest

Issuer Challenges with Share & Cash Movement

Being a detective

Assisting employees with undelivered money

Educating employees and assisting them with bank and brokerage codes

Cash Ensuring the shareholder can hold stock in their desired location

Brokerage, Direct Registration or Stock Certificate •  New regulations are complicating the matter for holding shares in the US

•  Escheatment complications and shareholder education

Shares

Types of Payment Methods

Payment Methods

5

Checks

•  Checks can be a good solution for local and low volume payments

•  Possible drawbacks: –  They are not a good

vehicle for moving money across borders

–  They can be lost or stolen in the mail

–  Delivery delays –  Check fraud

6

Wires

•  Good solution for international low to mid volume payments

•  Most traceable of the payment methods

•  Generally more expensive than other delivery methods

7

Wires

8

Requesting a Wire

9

Local Disbursements

•  Good solution for international higher volume payments

•  Low-cost electronic disbursement

•  No ability to track payments through the system –  If the amount is

larger or tracking is needed, a wire would be better

10

Requesting an ACH

11

Payroll

12

Currency control functionality could be leveraged where a trade needs to be

executed

There may be some situations in which disbursing through payroll makes sense

Generally causes more work and complexity for the issuer

Movement of US Shares

Types of Share Payments Methods

Share Payment Methods

Share Transfer •  Most common method of transferring shares

between broker/dealers, banks & trustees. •  Utilizes the Depository Trust Company

Transfer System (DTC)

•  Items to Consider: –  Participant may not have a brokerage

account open at another firm –  Can be used to transfer to same name

account or as a gift –  Shares must be fully tradable and

fungible to qualify for DTC transfer

Direct Registration

•  Replaced the common usage of physical certificates

•  Shares are registered in same name at the Transfer Agent

•  Instruct Transfer Agent how you would like to receive dividends (if applicable)

•  Viable solution for a participant who may not have an alternate brokerage or bank account in which shares can be held

•  May cause some delay in liquidation of shares

Local Deposit •  Maintain shares received at captive broker

or Agent in place •  Minimal movement of shares •  Shares are readily available for liquidation

•  May require additional paperwork to maintain shares or to process liquidation

•  Due to local regulations, may not able to hold shares long in brokerage account

•  Shares may have restrictions placed based on company trading window

Trustee Deposit

•  Shares are sent directly to a non-US trustee for deposit and tracking

•  Assists in tracking of share liquidation for local tax purposes

•  Samples include: Israel and French trustees

•  May allow for participants to hold long shares without forcing liquidation or tedious reporting

•  Issuer and Service Provider (if applicable) will work to deliver the shares via DTC or DWAC to Trustee

Movement of UK Shares

Key Differences

• Not just electronic – some people still hold certificates!

• Held on the register by a Registrar • Entitled to dividends paid by cheque • Not bearer certificates but difficult & • expensive to replace • -Trading more expensive and takes longer

Electronic Holdings

• Shares held in CREST– by a stockbroker who is a member of CREST and acts as a nominee - Same rights as an ordinary shareholder - Dividends direct to account -  Easy and quick to trade/ transfer electronically (Euroclear)

Transferring UK Stock

• This is “arranged” by your broker...more proactive than DRS - Contact made between sending & receiving brokers

-  Transaction and settlement dates agreed - Shares posted to CREST must be collected by receiving broker

Things to Consider • Know your employees •  Simple: Nominee account with your administrator

o  Keeps everything in one place o  No personal broker required, good for all employee plans

•  Advanced: Allow transfers to private brokerage accounts o  May be a requirement at exec level o  Some education required to receive UK stock

•  Stop and think again: Sending share certificates overseas! o  Just not a good idea!

Other considerations:

• Is your company multiple listed? ADRs to settle in US?

• Dealing with fractions • Transfers to other savings plans (SIPP / ISA in the UK)

Australia Share Deliveries CHESS Transfers

CHESS Transfers

• CHESS – Clearing House Electronic Sub-register System o  Accounts are known as HIN’s (Holder

Identification Number) o  Instructions are sent to custodian o  Counterparty needs to issue matching

instructions to receive shares §  Required fields: receiving HIN, security

quantity, security identifier

HIN: Holder Identification Number •  Can hold many different securities • Do not hold cash but can be linked to a bank account

CHESS Transfers: ASTF • Australian Standard Transfer Form

o  Also called an ASTF o  Form that helps the broker know how to issue matching

instructions to CHESS so that the transfer completes o  Most brokers will require an ASTF to receive shares o  Some brokers will require an original signed ASTF, and

others will be fine with an email or phone request o  Must be completed accurately

CHESS Transfers: The Frustration • Electronic share delivery through CHESS is not very complicated at its core, but the ASTF makes it a bit complicated.

•  This is because it generally provides an obstacle for the participant as they have to fill it out accurately and send the original via post.

•  If anything on the ASTF is incorrect, a new form must be filled out by the participant and posted again which can prove a frustrating process for some participants.

Australia Share Deliveries SRN Transfers

SRN: Shareholder Reference Number •  Shareholder Reference Number, similar to DRS

• Only one security is associated with a registry

•  SRN’s are identified by number, name and address

• SRN’s do not hold cash but can be linked to bank accounts

SRN: How does it Work? •  If mismatch occurs a new SRN is created in the participant name

•  The Registry does not need to have matching instructions to receive and allocate shares

•  They may reject for a mismatch in postal code but this can be corrected fairly easily

SRN: Relative Simplicity • Simpler than HIN transfers and the errors are clearer

• No ASTF’s are required to transfer to an SRN

Thank You Chris Mowatt

Barclays [email protected]

Patti Landry

Solium [email protected]

Ingrid Freire HP

[email protected]

Matt Gilliam UBS Financial Services [email protected]

Thank You Thank you for attending GEO’s 17th Annual International Conference in Boston. We hope you enjoyed this session. •  If you require CPE Credit, don’t forget to Sign Out

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