Online share dealing is way which facilitates and speeds up trading. It is an execution-only internet-based dealing service wherein delivery and payment for stocks is handled automatically, eliminating the hassle of traditional paper based transactions. Shares in UK companies are traded on the London Stock Exchange. Shares can be bought when a company first comes to market or through the stock market once they are in circulation and being traded, when investors can buy and sell their shares at any time. Traditional share dealing Traditionally, shares are held in paper form, a share certificate which evidences the ownership of shares. Holders appear on the company's share register, entitling them to shareholders' rights - dividends, the Annual Report and Annual Review, and the right to vote at the AGM and shareholder meetings. If you want to sell your shares, you have to deliver the original share certificate to your broker, who would ask you to fill up some forms and you will get your payment after the broker has sold the shares. At the time of buying the shares, you have to pay the broker within a few days of the transaction, and will receive a share certificate in due course. Until you receive this certificate, you will not be able to sell the shares. Online share dealing In online share dealing, you can hold shares as an electronic record, for which you will receive a periodical statement. 'Electronic shares' are held in a nominee account. Brokers handle the shareholding on your behalf and you do not receive a share certificate, but you remain the beneficial owner of the shares, and you receive dividends. The nominee provides you with copies of the company's annual reports and you can instruct the nominee to vote at the AGM in accordance with your instructions. Transactions are completed electronically through a system linking banks, stockbrokers and registrars. |
