Mercantile Law 292: Registration and Transfer of Securities

Vocabulary flashcards covering the registration, transfer, and legal definitions of certificated and uncertificated securities and nominee holdings.

Beneficial owner

The principal whose name does not appear on the securities register, but who is the actual owner of the shares; ownership does not depend upon registration.

Registered holder

The person whose name is entered in the company's securities register and whom the company recognizes as the shareholder.

Oaklands v Gelria Mining (1976) (1) SA 441 (A)

A legal case establishing that ownership of shares and registration in the securities register are two separate items.

Share

A bundle of personal rights whereby the rights exist independently of a certificate.

Certificated securities

Securities represented by a paper certificate which acts as proof of ownership but is not a negotiable instrument.

Uncertificated securities

Securities with no physical certificate that exist only as an electronic listing with paperless electronic transfer; required for all shares on the JSE.

Securities register

A record a company must maintain under s 24(4)(a) and s 50(1) which serves as sufficient proof of the facts recorded in it in the absence of evidence to the contrary.

STRATE (Share TRAnsactions Totally Electronic)

The licensed Central Securities Depository (CSD) that operates the electronic system for settling transactions of uncertificated securities on the JSE.

Shareholder (s 1)

The holder of a share issued by a company who is entered as such in the certificated or uncertificated securities register.

Nominees

The registered holder or representative of the beneficial owner; permitted under s 56(1) unless the MOI excludes them.

Nominee disclosure (s 56(3) and (4))

The requirement for nominees in a public company to disclose the identity of beneficial holders, as well as the class and number of shares held.

Regulated company disclosure (s 56(7))

A requirement for companies like public companies to include a register of disclosures in their annual financial statements for anyone holding 5% or more of a class of securities.

Nomine officii

An official capacity in which a registered holder (X) holds shares on behalf of the beneficial owner (Y), such as a curator of an insolvent estate.

Deemed beneficial interest

Circustances under s 56(2) where person Y is treated as having a beneficial interest if X holds it, including cases of marriage in community of property, parents of minors, or holding companies.

True owner voting rights (s 56(9))

The right of the actual owner to vote if their name is on the register of disclosures or they have a proxy from the registered owner; this does not apply to securities subject to CSD rules.