Deadline for Share Warrant Holders
SINGAPORE: The Ministry of Finance recently issued a statement reminding all bearers of share warrants to surrender the warrants for cancellation and have their names entered in the register of members of the issuing companies before 1 July 2017.
The ministry cautioned that outstanding warrants that are not surrendered by 1 July 2017 will be cancelled by the issuing companies and will cease to carry equity rights.
It stated that the notice follows the legislative changes in the Companies (Amendment) Act 2014 that were implemented on 1 July 2015, in which outstanding share warrants will be phased out over a two-year period.
“The move is in line with the Government’s policy, which disallows the issuance of bearer share equity instruments due to risks in facilitating un-tracked transfers of financial assets. It will also strengthen the transparency of companies,” read the statement.
The issuance of share warrants is prohibited under section 66 of the Companies Act in effect since 29 December 1967.
An arrangement is available for bearers of share warrants issued before 29 December 1967 to convert the warrants to registered shares.
The ministry added that bearers of share warrants who require further information on converting the share warrants to registered shares may wish to contact the issuing companies.
A share certificate is a written document prepared by the company under its common seal and sent to the members, containing the number of shares held by him or her and the amount paid thereon. The document works as evidence for the ownership of shares of the shareholder.
A share warrant meanwhile, is an instrument which signifies that the holder of the instrument is entitled to the shares mentioned in it. It a bearer document, which can be transferred by mere delivery.
A share certificate must contain:
– Name of the company
– Name and address of the shareholder
– Number of shares issued
– Funds paid for the shares
– Classes of shares
– Stamp and signature of two directors and the company secretary
The main differences between a share warrant and share certificate is that the bearer of a share warrant is not entered in the Register of Members of the company and it can easily be transferred by mere delivery. A share warrant also does not require time for transfer, is a negotiable instrument, while coupons for dividends may be attached with share warrant.
A holder of share warrant also has no right to vote, no right to sit in the meeting. In contrast, the bearer of share certificate is entered in the Register of Members of the company. A share certificate also requires certain procedures and stamp duty for the transfer and it also consumes time for such transfer. It is a kind of interest and ownership in the company and is not a negotiable instrument.Share certificates held by a person qualify him to become a director and he has several rights, such as to vote, right to participate in the meetings and right to become a director.