Section 793 notice

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A section 793 notice is issued under the Companies Act 2006, a provision which permits a public company to require anyone who might be “interested” in its shares to answer written questions about the nature of their interests. They are often sent to custodians — especially those like prime brokers whose clients include activist shareholders like hedge funds.

Companies may use section 793 notices to track possible stake-buildings exercise or takeover activity, but also to explain unexpected share movement or simply as routine house keeping of their register.

An “interest” under the act includes those held by spouses, trusts, offshore vehicles, nominees and coordinated arrangements between apparently unconnected individuals acting in concert and so on. Basically it is meant to get around any sneaky subterfuge and creative use of the corporate veil.

If you don’t respond to a s793 notice the company can “block” the shares you hold, preventing any underlying shareholder from voting or transferring its interests, until the answers are provided.