share trading how technology provides certainty to share plan participants
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TRANSCRIPT
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...
4
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%
Vote Now
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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