Share Certificate Question

Be_Happy

I'm new to shareholding, so I wonder if anyone can answer my question.

I hold Royal Mail Shares in a designated account for my grandson, ready to transfer on his 18th birthday in 12 years' time.

I opted for dividend reinvestment, so receive a share certificate twice a year, the latest one being for 3 shares.

While the paperwork is piling up, I don't mind this, but wonder if I will be charged extra at transfer time with many certificates rather than just one?

I think I can transfer the certificates into an investment account but am not sure if there will be an extra charge for using this account, and will all future dividend payments go into this investment account automatically?

Thanks for any info.

george4064

You will not be charged extra.


Here's the current 'setup' for your dividends;


- You hold the shares in certificate form, which details are held with the registrar
- When Royal Mail pay a dividend, they pay it to all the registrars who have registered shares for underlying beneficiaries (like yourself).
- The registrar then either sends the cash to the beneficiaries or buys more shares, and sends the beneficiaries more certificates.


If you were to transfer (this process from certificate to electronic form is called 'Lodging') the share certificates to an investment account (thus held in electronic form), the shares will then be registered to the investment platform you hold the shares with, and you as the beneficiary.


Therefore now, when Royal Mail pay a dividend, they will pay the investment platform (as registered holder of the shares), who will then in turn give the cash to the beneficiaries or buy new shares using the cash and apply them to the beneficiaries' investment account.


Hope this helps.

Be_Happy

Thanks George4064 for the very clear explanation.

After reading it, I was all set to open an investment account with Equiniti, but noticed that there would be a commission charge of £1.75 for dividend reinvestment, but my share purchase statement received today shows a commission charge of £1.50. It would seem better, therefore, to keep things as they are.

It was very good to get your answer which I could understand.