Can a stock transfer form be executed electronically?

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Published on LexisPSL on 26/03/2019

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Can a stock transfer form be executed electronically?

The focus of this Q&A is on electronic signatures, rather than the distinct topic of how to conduct virtual signings in which copies of a contract may be circulated electronically to signatories at different locations and then signed in hardcopy (and may subsequently be circulated in scanned form), for which, see Practice Notes: Virtual execution of documents and Executing documents—deeds and simple contracts.

In addition, this Q&A relates to a transfer of certificated shares (ie not shares traded via the CREST system, see Practice Note: Form of transfer of shares). It exclusively considers the position and assumes no foreign legal (or cross-border) considerations arise.

As explained in Practice Note: Transfer of shares—law and procedure, the form that an instrument of transfer takes is governed by the Stock Transfer Act 1963 (STA 1963) and the articles of association of the company whose shares are being transferred. If STA 1963 applies, a company's shares may be transferred using the stock transfer form it specifies, rather than any provided for in the company's articles. However, STA 1963 does not invalidate instruments of transfer that would otherwise satisfy the requirements of a company's articles (STA 1963, ss 1–4 and Sch 1). As STA 1963 applies only to fully-paid shares, the requirements of a company's articles as to the form of an instrument of transfer are those that must be observed

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