Here are explanations for some of the terms that you might come across while communicating with us relating to an investment or as you sort out an estate.
Administrator If the person who died didn’t leave a valid will naming an executor, the court will appoint an administrator instead – usually next of kin. Administrators have the same legal rights and responsibilities as executors.
AGM Annual General Meeting. The meeting that a company normally holds with its shareholders after announcing its annual results to approve the accounts, re-appoint directors, auditors, etc.
Acquisition One company takes over another by purchasing its assets or shares. Acquisitions can be friendly or hostile.
Asset Individual items of property, money or possessions that belonged to the deceased.
Beneficiary Someone entitled to money, property or other possessions from the estate. They’ll be named in the will or under the rules of intestacy.
Broker The intermediary agent between a market maker and an investor, who charges a commission for services provided.
Certificate See Share certificate.
Certificate of Confirmation See Confirmation.
Certificated shares See Ordinary shares.
Certified copy: A copy of the original document that has been signed and verified by a regulated professional person or body covered by the money laundering, such as a UK Lawyer/Solicitor, Bank or Authorised Financial Intermediary (FCA regulated). The certified stamp needs to be original, signed and dated with the signature of the certifier and with their registration number (if applicable).
Chain of Representation If the executor for an estate dies, but leaves a Will for their own estate and Probate is extracted/issued, then their executor is able to sign paperwork relating to the original estate. If the executor for an estate dies, but does NOT leave a Will then the Chain of Representation is broken and an administration (Will) or an Administration De Bonis Non will need to be extracted for the original investor (rather than the executor).
Company For the purpose of this guide, this means companies in which shares are held.
Confirmation The Scottish Grant of Representation, naming the executor of the estate. The Confirmation differs from other Grants in that it lists all of the person’s property. For our purposes, it needs to list all of their shareholdings. The document is sometimes called a ‘Certificate’ of Confirmation.
Consolidation Method of reducing number of shares in issue - i.e. 1 new share for say every 50 originally held
Contract note Confirmation from the stockbroker of the deal, including the full title of the stock, price, commission and the time of the deal. These must be kept safely for tax purposes
Corporate action A corporate action refers to any alteration to a Company's share capital or a distribution of benefits. A corporate action might come about as a result of a takeover, merger or acquisition, capital re-organisation, dividend, rights issue or Stock Split.
Corporate Sponsored Nominee (CSN) Shares also called ‘uncertificated’ or simply ‘nominee’ shares, these are shares held electronically on the shareholder’s behalf in the name of a holding company (the ‘nominee’). This means that the names of the actual holders aren’t on the main share register – and so can’t be publicly viewed – but the nominee keeps a separate private register behind the scenes. Holders of CSN shares have the same benefits as those of Ordinary shares, but without having to keep paper share certificates – instead getting regular statements.
Countersignature A second signature (or stamp) on a form to confirm the person signing the form is who they say they are. The countersignatory might also share some of the liability if the person breaks the terms they’re agreeing to, which is why they usually charge a fee.
CREST CREST is the electronic settlement system used by Stock Market participants.
Delist The removal of a security's listing on a stock exchange. This is done when the security no longer exists, the company is bankrupt, the public distribution of the security has dropped to an unacceptably low level, or the company has failed to comply with the terms of its listing.
Dissenter A dissenting shareholder is someone who has not officially accepted the terms of a takeover of a company in which they hold shares. This could be for a number of reasons, including that they do not agree with the takeover, they were unaware of the takeover because they have moved address etc. When an offer period closes a dissenter register is created. The original shares become invalid. They remain on the Dissenters register until they receive their entitlements.
Dividend A way for a company to pass some of its earnings to its shareholders, either as a cash payment (dividends) or more shares.
DRIP Standing for Dividend Re-Investment Plan, a DRIP is a programme where a shareholder’s cash dividend is used to buy more shares. A DRIP is different from a SCRIP programme. A DRIP buys shares on a shareholder’s behalf on the open market; in a SCRIP the company creates and issues brand new shares.
Estate Everything owned by the person who has died.
Executor The person named in a will to carry out its instructions.
Forfeiture Dividends and shares can be ultimately forfeited if not cashed (usually up to 12 years) and is dependent on the Companies articles of association. When a share is forfeited, the shareholder no longer owns any remaining balance and surrenders any potential capital gain on the shares, which automatically revert back to the ownership of the issuing company. Dividends and shares held in a CSN are not subject to this forfeiture.
Gone Away A Gone Away marker is applied to a shareholding when mail is either received back marked as undeliverable or notified they are no longer at the address. The shareholder is considered 'gone away' from the address on the share register.
Grant of Probate A Grant of Representation from England, Wales or Northern Ireland, issued when the person who died left a will. The Grant of Probate names the executor of the estate.
Grant of Representation The general name for a legal document stating who the legal representative of the estate is – whether an executor or an administrator. It gives them the legal right to sort out the estate according to the will or the rules of intestacy.
Holdings The common term for stock held.
Indemnity See Letter of Indemnity.
Inheritance Tax An HMRC tax on the estate, usually only payable if its value is over a certain amount. Whether Inheritance Tax is payable or not is one of the factors in being eligible to use our Small Estate process. You can find more details about the tax on www.gov.uk/inheritance-tax
Intestate / Intestacy When someone dies without a valid will, they are said to have died intestate. With no will naming the beneficiaries of the estate, the law decides whom should benefit. You can find more details about the rules of intestacy on www.gov.uk/wills-probateinheritance
Joint Holding A shareholding or investment owned jointly by two or more people.
Know your customer (KYC) The due diligence and bank regulation that financial institutions and other regulated companies must perform to identify their clients and ascertain relevant information pertinent to doing financial business with them.
Legal representative The general term for an executor, administrator or other person legally acting on the shareholder’s behalf, or on behalf of the estate.
Letter of Indemnity In a case where the original share certificate has been lost, you will need to complete a letter of indemnity. This is basically a request to the Registrar to issue new stock or share certificates to replace an original which has been lost, destroyed or stolen. A form of protection for us and our client companies if share certificates reported to us as lost (and that we replace) are later used fraudulently.
Letters of Administration Similar to a Grant of Probate, but issued when someone dies without a valid will. The Letters of Administration name the administrator of the estate.
Listed Company This is a Public Limited Company whose shares have been admitted to the London Stock Exchange's daily official list. It has to comply with the Exchange's listing regulations.
LSE London Stock Exchange The stock exchange where UK shares are listed.
Mandate For our purposes, a mandate is an instruction from the shareholder to have dividends paid as something other than a cheque. There are three types of mandate: bank mandates to have dividends paid directly into a bank account, and DRIP and Scrip mandates to have the dividends re-invested in exchange for more shares.
Market A place where transactions are undertaken including the London Stock Exchange, AIM and PLUS. All stock exchanges are markets.
Market Maker Stock Exchange member firms which are obliged to make a continuous two-way price, that is to offer to buy and sell securities during market hours.
MiFID MiFID II is legislation designed to protect investors, such as yourself, by introducing enhanced obligations for firms, like Equiniti Financial Services Limited, who provide investment and trading services. Its aim is to increase transparency and prevent market abuse.
Next of kin The closest living relative(s) of the person who has died.
The order of precedence is:
1. Husband, wife or civil partner
2. Son or daughter
3. Father or mother
4. Brother or sister
5. Grandparent or grandchild
The ‘highest’ living person on this list is considered the rightful beneficiary (a wife has priority over a son, for example).
Nominee shares See Corporate Sponsored Nominee (CSN) shares.
Ordinary shares A common form of share. The holder of ordinary shares are the owners of that company, the holders also receive dividends which vary in amount.
Personal representative The person responsible for dealing with the estate of someone who’s died, either the executor or the administrator.
Power of Attorney The legal document that allows you to appoint one or more persons to make decisions on your behalf.
Probate The legal process of getting a will confirmed as valid. ‘Probate’ is also used more generally (particularly in the UK) to mean the entire process of sorting out an estate. See Grant of Probate for the legal document.
Probate Registry The name of the public body responsible for issuing the grants of representation. There are local District Probate Registries around the UK.
ProSearch Reference A 7-digit number that you can find this on most documents that we send out - letters or forms.
Record date The date on which a shareholder’s entitlement to a dividend is worked out and confirmed – usually a few weeks before it’s actually paid.
Registrar An organisation that takes responsibility for maintaining a company's share register, which lists the registered holders of the stock.
Rights Issue The issue of new shares by a company to raise cash, these shares are normally offered to existing shareholders in proportion to their holdings.
Scheme Of Arrangement Variation on a takeover or capital restructure.
Scrip dividends Scrips and enhanced scrip dividends - in this instance the company will announce that shares can be offered in lieu of a cash dividend.
Scrip issue This is where investors in a company are given shares free of charge by the company as a 'bonus'. The result is to increase the number of shares in issue.
Security The type of shares; ‘Ordinary Shares of 10p’, for example.
Settled/Settlement The delivery of cash and/or securities in respect of an asset purchase or sale. They can also refer to the clearance of cash for other activities such as dividend or interest payments.
Shareholder Reference The 11-digit number unique to each shareholding. You can find this on most documents that the Registrar will send out relating to the shareholding - letters, share certificates, dividend cheques or statements.
Share certificate A certificate(s) issued by a company that certifies key information and the number of shares owned by the shareholder (the registered owner) on the date of issue.
Shares Companies divide their capital into units called shares. Owning shares brings rights – a stake in the business – but also the risk of losing the investment.
Stock exchange A market in which securities are bought and sold, e.g. stocks, shares and gilts and bonds.
Stockbroker The agent that buys and sells shares on your behalf and earns commission on the value of the transaction.
Stocks Generally used as another word for equities. Technically, this more accurately refers to fixed interest securities.
Takeover The purchase of one company by another. A takeover can be a friendly acquisition bid where the management would co-operate negotiating the best price, or it could be an unfriendly bid, where the management tries to use various defensive strategies to repel the bidder.
Testate When someone dies having made a valid will, they are said to have died testate. The opposite – where there isn’t a will – is intestate.
Uncertificated shares Stocks without a certificate held through CREST as well as CSN shares.
Will A legal document that lays out whom should benefit from the estate, and possibly things like funeral arrangements. It should also appoint an executor to carry out these instructions.