​It is believed t​hat throughout the UK economy there is a significant amount of money that remains unclaimed or lost by its true owners


 

This issue was first addressed by the government in 2008 which led to the formation of the 'Dormant Bank and Building Society Accounts Act'.

 

The legislation required banks and building societies to trace account holders that had not been in contact for a number of years. Where contacts could not be re-established, the money held would be declared dormant and passed to a central fund used for good causes.

 

In December 2015, the UK Government built upon this initiative to form the 'Commission on Dormant Assets'.

 

In March 2017, the Commission on Dormant Assets published a new report

 

The Commission believes that this report will help to decrease levels of asset dormancy across financial sectors and businesses. It will look to increase the frequency of asset reunification and, where this isn't possible, recycle dormant funds to be used for key social issues.

 

What does the Commission's report say?

 

The Commission's report suggests that any expanded scheme should be voluntary and must provide a clear route of reclaim for any assets supported by a legitimate claim.

 

There are four key recommendations on:

  • Reaffirming the key principles of the current scheme

    Reaffirming the key principles of the current scheme

  • Proposals for expansion of the current scheme

    Proposals for expansion of the current scheme

  • Amendments to administration of the current scheme to take account of a wider range of assets

    Amendments to administration of the current scheme to take account of a wider range of assets

  • How an expanded scheme might be supported by new or amended legislation

    How an expanded scheme might be supported by new or amended legislation

​The report also identifies a number of key findings specific to securities in chapters four and five:

 

  • More work should be done to understand the full scope of dormant assets associated with Issuer's shareholders
  • More work should be done to understand key obstacles (unclaimed dividends, corporate action monies, dormancy shareholdings) and how these could be overcome
  • Issuers should amend their articles to facilitate unclaimed dividend payments or dormant shareholdings being released to good causes via either the reclaim fund or other methods after 12 years
  • The industry are to standardise a procedure for the tracing and reunification of assets to their owner
  • The standard tracing and reunification procedure should be proportional based upon the potential value of the dormant assets


 

What's going to happen next?

  • 1

    UK Government will consider the recommendations of the Commission and respond to the report

  • 2

    Expected legislative framework will be introduced with an implementation of several years

  • 3

    We will continue to work with the Government and the Dormant Asset Commission and push for direct issuer engagement on this matter

  • 4

    We will keep you informed of any developments in this area over the coming months

If you have any feedback on the specific proposals contained in chapters four and five of the report, please email John Britton our Governance and Industry Officer.​


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