Multiple ownership pooled nominee account assumptions
In 2011, the Government Statistical Service (GSS) Methodology Advisory Service conducted a methodological review. The recommendations are summarised in the Share ownership methodology review. One recommendation was to update the sector assumptions for multiple ownership pooled nominee accounts.
This involved analysing company share registers, for which ONS employed a specialist company. The company chosen, Equiniti, had 42 of the FTSE 100 businesses as Equiniti Registrar clients. This meant a large proportion of total pooled nominee holdings by market value could be analysed. Based on the 42 UK companies within the FTSE100, Equiniti provided analysis of pooled nominee shareholdings representing £288.5 billion.
These new sector percentages have been incorporated in the estimates for 2010 share ownership. These changes make comparisons between years difficult.
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Understanding the data
Interpreting the data
This statistical bulletin, produced by the Office for National Statistics every two years, shows the ownership of ordinary shares in quoted companies in the UK at 31 December 2010.
Share ownership is measured using data from Euroclear (CREST), the electronic settlement system for equity share trading, and further analysis of share registers. Tables 1, 3, 6, 7 and 10 accompanying this statistical bulletin, show the market value of UK quoted shares by beneficial owner, with multiple ownership and excluded shares in paper form shown separately.
In order to identify the true beneficiary of multiple ownership pooled accounts, a sample of these accounts from company share registers were analysed. Assumptions for pooled and excluded shareholdings are further described in the methods section of the background notes. Tables 2, 4, 5, 8, 9, 11, A and B show sector of beneficial owner after the multiple ownership pooled nominee accounts and excluded shares in paper form have been allocated to a category of beneficial owner.
The assumptions used to allocate pooled nominee accounts and excluded share in paper form were updated for 2010 share ownership, the first time since 1997. There are some significant changes which makes comparisons between the intermediate years difficult.
The register analyses were run as at 31 December 2010 but, due to the settlement period on the Euroclear (CREST) system, transactions immediately prior to 31 December may not have been recorded on the registers.
In 1998 the survey switched to using data from the Euroclear (CREST) system which led to discontinuities. The largest impact was that some companies previously classified to unit trusts and investment trusts are now classified as other financial institutions. This makes long-term trends in these sectors hard to identify.
Note that the share ownership analysis has not been carried out at uniform intervals and care should be taken when interpreting figures 3 to 7 and tables A and B.
Definitions and explanations
- Beneficial Owner: The true underlying owner of the share who receives the benefits of holding the share, for example income through dividends
- Market Capitalisation: Total value of a listed company’s shares in issue, calculated as the number of shares multiplied by share price
- Dematerialisation: Shares are held in electronic form, rather than in paper form
- Excluded shares: These are shareholdings not held on the electronic share register but held instead in paper form, such as some share holdings of company directors
- Multiple ownership pooled nominee accounts: One entry on the share register representing many beneficial owners from at least two different sectors. Therefore the electronic share register cannot give the complete breakdown of beneficial ownership sector
- FSTE 100: The FTSE 100 index is the most widely used UK stock market indicator representing around 80 per cent of the market capitalisation of the London Stock Exchange. The index has a base level of 1000 on 3 January 1984
- Buyback: The repurchase of shares by the issuing company in order to reduce the number of shares on the market
- American Depositary Receipt (ADR) programme: An ADR is a negotiable certificate denominated in U.S. Dollars issued by a U.S. bank representing a specified number of shares in a foreign stock traded on a U.S. exchange or Over-The-Counter (OTC) market
Use of the data
The principle purpose of these share ownership estimates are to populate within the UK National Accounts financial account, the assets side for a particular financial instrument, quoted UK shares.
A sample of companies is taken from a database supplied by the London Stock Exchange. All large companies in terms of market capitalisation are selected. The remaining companies within the sample are drawn with their probability of selection proportional to their market capitalisation. For 2010, all companies with a market capitalisation greater than £2.8 billion were selected. The remaining companies within the sample were drawn with probability of selection proportional to size (market capitalisation). For 2010, 200 companies were selected, representing 88 per cent of UK market capitalisation, which comprised:
- the 83 largest companies by market capitalisation as at 30 September 2010
For these sampled companies, the beneficial owners are obtained. Since 1998, data are acquired from Euroclear (CREST), the electronic settlement system for equity share trading, to estimate the value of UK quoted shares across sectors of beneficial owner on 31 December 2010.
For large companies, the value of shareholdings in each company is added together. For the smaller companies, the percentage split by sector is calculated for each company and the average of these percentage splits is applied to the total value of shares accounted for by all smaller companies. The overall aggregate figures are the sum of holdings in the large and smaller companies.
A number of shares are still held in certificated form outside the Euroclear (CREST) system and have been classified to ‘excluded’ in the analysis. For these and for multiple ownership pooled accounts holdings further allocation is required.
Multiple ownership and excluded shares
The Euroclear (CREST) data for each sampled company are checked against the Waterlow Stock Exchange Yearbook 2010 published by Caritas Data which lists shareholders owning substantial numbers of ordinary shares.
Holdings which remained unallocated after the checking and adjustment process are apportioned according to the following fixed percentages, which were based on additional analysis of the sample of companies.
Assumptions for unallocated excluded shares 2010
Download this table Assumptions for unallocated excluded shares 2010
Assumptions for multiple ownership shares for 2010
Download this table Assumptions for multiple ownership shares for 2010
Analysis of pooled nominee accounts, 2010
ONS would like to thank Equiniti for their analysis from which the percentages for allocating beneficial owner within pooled nominee accounts have been derived.
Categories of beneficial owner
Accounts should be classified according to the category of beneficial owner of the securities. This information is used by the Office for National Statistics (ONS) in compiling data for use in the UK National Accounts. Institutions or individuals that are not resident in the UK are classified to one of the two ‘overseas’ categories. For the purposes of this coding only, residents in Ireland, the Channel Islands and the Isle of Man are classed as ‘overseas’.
Pooled nominee accounts where the beneficial owners all fall into one of the categories listed below should be classified to that category. Otherwise, they should be classified to ‘multiple ownership: pooled nominees’
Changes since Share Ownership 2008 statistical bulletin are clearly indicated in bold
- Individuals: Includes holdings owned by individual persons resident in the UK (whether registered in their own name, through a PEP/ISA, or as clients of a stockbroker or fund management group); shares held for employee share ownership schemes; and shares held in trusts with named individual beneficiaries
- Charities, churches etc.: Includes all private non-profit making bodies, including private trusts set up for charitable purposes, charities and holdings by universities and the church commissioners
- Insurance companies: These are active in both life insurance and non-life (general) insurance
- Pension funds: This includes local authority, public corporation and private pension funds. Pooled pension funds managed by insurance companies are now classified here rather than insurance companies
- Investment trusts: Comprises authorised investment trusts and authorised closed-ended investment companies incorporated in the UK, including PEP/ISAs run by them
- Unit trusts: Comprises authorised unit trusts, including PEP/ISAs run by unit trusts. Open-ended investment companies (OEICs) are now included in this category, rather than investment trusts as both unit trusts and OEICs are open ended funds
- Banks: Comprises institutions authorised as deposit takers by the Bank of England
- Other financial institutions: This includes market participating holdings such as clearing accounts, market makers, stock lending and collateral accounts. This also includes funds such as index funds, exchange traded funds, hedge funds, socially responsible and ethical funds
- Non-financial companies: Includes private limited companies (Ltd’s), public limited companies (PLC’s) and unincorporated partnerships, such as firms of accountants and solicitors. Corporations owned by central government or local authorities should be classified to public corporations
- Central Government: Includes government departments, government agencies and the Bank of England (including its issue department and banking department)
- Local Government: Includes holdings held directly by local authorities. Securities owned by local authority superannuation funds should be classified to pension funds
- Public Corporations: Comprises corporations which, although owned by central government or local authorities, have substantial freedom to conduct their affairs on ordinary business lines. Securities owned by public corporation superannuation funds should be classified to pension funds
- Non-resident: owner in EU: All institutions or individuals resident in countries of the European Union other than the UK
- Non-resident: owner outside EU: All institutions or individuals resident in countries outside of the European Union. Also includes beneficial owners who are known to be resident abroad, but where the country of residence is not known precisely, and pooled nominee accounts where the beneficial owners are all non-residents but the split between EU and non-EU residents is not known
The Summary Quality Report for Share Ownership will be made available in due course on the ONS website.
There are no revisions to previously published estimates.
The assumptions for multiple ownership pooled accounts have been updated for 2010. These assumptions were unchanged between 1998 and 2008. Without undertaking the analysis for every year, which would be labour intensive, it is not possible to identify whether changes happened in particular years or happened gradually.
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The complete run of data in the tables of this statistical bulletin is available to view and download in electronic format through ONS Time Series Data. Users can download the complete bulletin in a choice of zipped formats, or view and download their own sections of individual series.
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