Table of contents
- Main points
- Holdings of UK quoted shares by sector of beneficial owner
- UK stock market
- Changes in 2014 and revisions to 2012
- Rest of the world holdings of UK shares by value
- Individuals’ holdings of UK shares by value
- Insurance companies’ holdings of UK shares by value
- Pension funds’ holdings of UK shares by value
- Unit trusts’ holdings of UK shares by value
- Other financial institutions’ holdings of UK shares by value
- Government intervention in financial institutions
- Geographic analysis of rest of the world holdings of UK shares
- Background notes
1. Main points
The broad make-up of share ownership remained the same at the end of 2014 as it was in 2012, with rest of the world investors holding significantly more shares (in terms of value) than any other sector
Rest of the world ownership stood at an estimated 54% of the value of the UK stock market at the end of 2014. This was up from 31% in 1998 but unchanged from the 2012 estimate
UK individuals owned an estimated 12% of quoted UK shares by value at the end of 2014, an increase from the historic low of 10% in 2010 and 2012
Unit trusts held an estimated 9% by value at the end of 2014, slightly down from the 2012 level but still much higher than in 1998, when they only accounted for 2% of share ownership
Other financial institutions held an estimated 7% by value at the end of 2014, similar to 2012 but lower than the estimated 12% they held in 2010
Insurance companies held an estimated 6% and pension funds an estimated 3% by value at the end of 2014, continuing the downward trends in these sectors seen in recent years
The majority of shares by value are held in multiple-ownership pooled accounts, where the beneficial owner is not held centrally and must be established by means of a Companies Act 2006 Section 793 request. As in 2012, these accounted for over half (59%) of the total holdings by value at the end of 2014. Multiple ownership pooled accounts have been allocated to sectors using further analysis of share registers
This statistical bulletin provides estimates of holdings of ordinary shares in UK domiciled, quoted companies by sector of beneficial ownership, and also incorporates revisions to the 2012 data originally published in September 2013
The beneficial owner is the underlying owner; the person or body who receives the benefits of holding the shares, for example income through dividends (see Annex A for details). Companies included are those which are listed on the London Stock Exchange and are domiciled in the United Kingdom; that is, their country of incorporation is the UK. At the end of 2014, shares in quoted UK domiciled companies were valued at a total of £1.7 trillion
3. UK stock market
The UK stock market covers the total value of shares registered in the UK and quoted on the London Stock Exchange. Between 1 January 2013 and 31 December 2014 the value of all UK ordinary shares quoted on the London Stock Exchange increased from £1,608 billion to £1,727 billion, an increase in value of 7.4%.
Figure 2 shows the FTSE 100 index, the most widely used UK stock market indicator, from 1998 to 2014. It should be borne in mind that the FTSE 100 includes a number of companies that are domiciled overseas; these are excluded from the analysis in this bulletin. Some FTSE 100 companies are domiciled in the UK but conduct the majority of their business operations overseas; these companies are included in the analysis presented in this bulletin
With fluctuations, the trend of the FTSE 100 index is upwards until it peaked in 1999, during the ‘dot-com bubble’. When the speculative bubble burst the FTSE 100 index fell over the period 2000 to 2003 by around 50%. After this event, the UK stock market increased, peaking in late 2007. Subsequently, the FTSE 100 index fell by around 40% during the financial crisis, before recovering again. By December 2014, the FTSE 100 stood at around its pre-crisis level.
Figure 2: FTSE 100 share index, 1984 to 2014
Source: Office for National Statistics
Download this chart Figure 2: FTSE 100 share index, 1984 to 2014Image .csv .xls
4. Changes in 2014 and revisions to 2012
While the methodology used to run the 2014 Share Ownership Survey is broadly the same as the 2012 exercise, the sample selection method has been altered. In 2014, the sample of approximately 200 companies was selected to give coverage of a range of different types of company, including those listed on the Alternative Investment Market (AIM). The results of the 2014 survey are considered to be comparable with those in 2010 and 2012, but these changes to the sample design and selection may have had a small impact.
In this publication, the total value of shares in quoted UK domiciled companies is consistent with the UK financial balance sheet (Table 1.6.9 of the UK Economic Accounts) published in June 2015. Since the publication of the 2012 share ownership results, the estimated total value of shares in UK quoted and domiciled companies at the end of 2012 has been revised down by £148 billion. This has an impact on the grossing applied to the smaller companies in the 2012 sample, reducing the contribution they make to the overall results. The impact this has on the headline 2012 results is shown in Table 2. No revisions have been made prior to 2012.
Table 2: Beneficial ownership of UK shares by value, revisions to 2012 data
|Rest of the world||53.2||53.6||0.4|
|Other financial institutions||6.6||6.6||0.0|
|Private non-financial corporations||2.3||2.4||0.1|
|Charities, church, etc||0.6||0.6||0.0|
|Source: Office for National Statistics|
|1. Components may not sum due to rounding|
Download this table Table 2: Beneficial ownership of UK shares by value, revisions to 2012 data.xls (29.7 kB)
11. Government intervention in financial institutions
The financial crisis of 2008 led to unprecedented government intervention in the UK financial industry. There was initial recapitalisation of The Royal Bank of Scotland Group plc (RBS) in November 2008 with a further injection in 2009. The recapitalisations of LloydsTSB Group plc and HBOS plc took place in 2009. The Government also participated in 2 subsequent recapitalisations of Lloyds Banking Group plc in 2009.
Since the end of 2012, the Government has sold some of the shares it held in Lloyds Banking Group; details can be found in the Public Sector Finances statistical bulletin, under “Recent events”. On 31 December 2014, the remaining shares held in Lloyds Banking Group and RBS by the Government had a market value of £49 billion. For further information of the treatment of government interventions see our article Public Sector interventions in the Financial Crisis.Back to table of contents
13 .Background notes
Understanding the data
Interpreting the data
This statistical bulletin, produced by the Office for National Statistics every 2 years, shows the ownership of ordinary shares in quoted companies in the UK at 31 December 2014.
Share ownership is measured using data from Euroclear (CREST), the electronic settlement system for equity share trading, and further analysis of share registers. Many of these shares (59% in 2014) are held in pooled nominee accounts with multiple ownership, or in the form of paper shares not on CREST. Some of the reference tables accompanying this bulletin show these shares separately; see the notes of these tables for details.
In order to identify the true beneficiary of multiple ownership pooled accounts, a sample of these accounts from company share registers were analysed. The analysis is further described in the methods section of the background notes. Paper shares are also assigned to a category of beneficial owner. All the tables and charts in this bulletin, and the remainder of the reference tables, are on this basis.
Care should be taken when making comparisons between years. 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 were from that point onwards classified as other financial institutions. This makes long-term trends in these sectors harder to identify. Note also that the analysis of pooled nominee accounts was not updated between 1998 and 2008. For each of these years the 1997 analysis was used to compile the results. The impact of this is discussed in the relevant sections of this bulletin.
Note that the share ownership analysis has not been carried out at uniform intervals and care should be taken when interpreting time series charts and tables in this publication.
Uses of the data
The main purpose of the share ownership estimates is to populate the financial accounts. The data are used to derive the asset breakdown for the transaction line "Quoted Shares" in the financial accounts and, in the absence of any other information, the transaction line "Unquoted Shares".
The main use of the data externally is to provide definitive or benchmark data on the ownership of shares in UK companies. Individual companies need to know who owns their shares but there is also an interest in ownership more widely and the implications for policy in, for example, growing overseas ownership or declining ownership by individuals. Our data provides this benchmark every 2 years.
We regularly engage with users to gain feedback on the data. A Share Ownership User Group was set up in 2012 to take key users and stakeholders through the methodology used to produce the results. We have also regularly consulted with users on a bilateral basis.
External users' main concerns with the data reflect the extent to which the published data differ from the industry view or outside analysis. Some users had commented that individuals owned a larger share of Alternative Investment Market (AIM) companies than those on the main market. AIM is the London Stock Exchange’s global market for smaller and growing companies.
With this in mind, the sample design was altered to increase the number of AIM companies selected. Table 4 shows beneficial ownership of FTSE 100, AIM companies and other listed companies.
Table 4: Holdings of FTSE 100, AIM and other quoted companies by beneficial owner
Per cent Benificial owner FTSE 100 AIM Other quoted Individuals 9.5 30.6 21.0 Charities, churches, etc. 1.3 0.3 0.6 Insurance companies 5.9 2.3 6.3 Pension funds 3.0 2.7 3.0 Investment trusts 1.9 1.5 1.6 Unit trusts 8.6 10.6 10.4 Banks 1.5 1.6 1.0 Other financial institutions 7.2 4.6 6.9 Private non-financial companies 2.3 0.9 0.7 Public sector 3.6 0.0 0.0 Rest of the world 55.2 45.0 48.5 Total1 100.0 100.0 100.0 Source: Office for National Statistics Notes: 1. Components may not sum due to rounding
Download this table Table 4: Holdings of FTSE 100, AIM and other quoted companies by beneficial owner.xls (29.2 kB)
These figures use the full sample of companies surveyed by Equiniti and Orient Capital to allocate pooled nominee accounts to beneficial owners, as the sample size is too small to use subsamples for each of the 3 groups. Therefore these figures should be regarded as indicative. However, the evidence suggests AIM companies are indeed owned to a greater extent by individual shareholders. However, because this study is conducted by value and AIM companies represent a small proportion (by value) of quoted shares of UK domiciled companies, they do not substantially affect the final results. We will continue to liaise with users to ensure that any differences in view are fully explored and reconciled.
Differences in definition may be a factor in explaining this difference in view. One such difference is the difference between the beneficial owner and the registered owner; another is that the scope of the UK Economic Accounts (and hence this survey) only includes companies domiciled in the UK. The size of the sample could also be a factor.
There is also some concern over the extent to which the data are comparable over time. As noted elsewhere, the analysis of pooled nominee accounts conducted in 1997 was not updated until 2010. This means that there are issues of comparability with the data for 1998 to 2008. This is made clear in the presentation of Figures 3 to 8 in the main part of the bulletin. The results for 2010, 2012 and 2014 are considered to be broadly comparable.
Definitions and explanations
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.
Beneficial Owner: The true underlying owner of the share who receives the benefits of holding the share, for example income through dividends.
Buyback: The repurchase of shares by the issuing company in order to reduce the number of shares on the market.
Dematerialisation: Shares that are dematerialised 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.
FTSE 100: The FTSE 100 index is the most widely used UK stock market indicator. It tracks the performance of the top 100 companies, representing around 80% of the total market capitalisation of the London Stock Exchange. The index has a base level of 1000 on 3 January 1984.
Held in treasury: The portion of shares that a company keeps in their own treasury. Treasury stock may have come from a repurchase or buyback from shareholders or it may never have been issued in the first place.
Market Capitalisation: Total value of a listed company’s shares in issue, calculated as the number of shares multiplied by share price.
Multiple ownership pooled nominee accounts: One entry on the share register representing many beneficial owners from at least 2 different sectors. Therefore the electronic share register cannot give the complete breakdown of beneficial ownership sector: this must be established by means of a Companies Act 2006 Section 793 request.
Ordinary shares: An ordinary share gives the right to its owner to share the profits of the company (dividends) and to vote at general meetings of the company. They are the most common form of shares in the UK.
Quoted shares: Shares that are quoted on the London Stock Exchange. A quoted company is a company whose shares are quoted in this way.
For each Share Ownership Survey, a sample of companies is taken from a database obtained from the London Stock Exchange. The typical sample size is around 200, with the top 80 to 90 largest companies in terms of market capitalisation automatically selected and the remaining companies drawn with their probability of selection proportional to their capitalisation. This set up ensures a large coverage in terms of market capitalisation and reduces the need for a larger sample, which would add to the cost of carrying out the survey.
In 2014, the results are based on 198 companies, representing approximately 85% of the total value of UK listed shares (as set out in the UK Economic Accounts). The sample comprised the 88 largest companies and 110 smaller listed companies.
In a change to previous years, 30 of the 110 smaller companies were selected from the Alternative Investment Market (AIM). This was in response to user feedback that AIM companies had different patterns of ownership to main market companies. This is discussed in Section 2 of these notes.
For the sampled companies, the beneficial owners are obtained. Since 1998 data are acquired from Euroclear (CREST), the electronic settlement system for equity share trading. Each registered participant in CREST has to specify to which National Accounts category the beneficial holder of the shares belongs. This information is used to estimate the value of UK quoted shares by sector of beneficial owner on a particular date.
This list gives these sector categories, in line with the UK National Accounts:
Charities, churches etc
Other financial institutions
Non-resident: owner in EU
Non-resident: owner outside EU
Multiple ownership: pooled nominees
Annex B provides more detail on the composition of each of the categories. The multiple ownership category covers all those accounts where the beneficial owners are from 2 or more of the categories listed above, and are referred to as pooled nominee accounts.
Additionally, there are excluded shares not held on CREST. These are shareholdings in material form, such as some shareholdings of company directors. This value is calculated as the difference between the total shares in issue on the London Stock Exchange and those held on CREST. A range of sources are used to identify any major shareholdings which are then assigned to the correct beneficial ownership sector.
The remaining excluded shares are allocated to 2 sectors – individuals (87.3% in 2014) and the rest of the world (12.7% in 2014). These percentages are based on analysis by Equiniti and Orient Capital.
Work on multiple ownership for the 2014 results
The work undertaken for the 2014 Share Ownership Survey followed the same basic methodology as the 2012 survey. This was explained in a note, Share Ownership Methodology, published in July 2013.
We continued our relationship with Equiniti and Orient Capital, who provided the analysis of multiple and single nominee accounts. We would like to thank Equiniti and Orient Capital for their work on the 2014 results.
The Quality and Methodology Information Report for Share Ownership is available on our website.
The quality of the share ownership results for 2014 is likely to be high. The sample is representative and covers a large proportion of shares in scope. The survey has benefited from the continuing input by Equiniti and Orient Capital, who are recognised experts in the field.
Sampling errors will arise when estimates are based on a sample rather than the whole population. In 2014, the Share Ownership Survey collected data from a sample of 198 companies, representing approximately 85% of total market capitalisation. The sample comprised the 88 largest companies and 110 smaller companies. Errors in the estimates will arise to the extent that the 110 small companies were unrepresentative of smaller companies in total, for example in the proportion of beneficial owners classified to the insurance sector.
Non-sampling error can arise due to errors in measurement and process. The primary data source for the Share Ownership Survey is CREST. Each registered participant in CREST has to specify, when setting up their account, to which National Accounts category the beneficial owners of the shares belongs. This information drives the allocation of the results and it is important that it is accurate and regularly maintained: We have previously worked with Euroclear to emphasise the importance of the sector allocation on CREST to clients and asking them to review their member account categorisation.
Non-sampling errors may also arise in the analysis of share registers. Identifying the true beneficial owners is a specialised undertaking and in recent years this task has been carried out by Equiniti (2010) and Equiniti and Orient Capital (2012 and 2014).
There are some revisions to the previously published estimates for 2012. These are described in the main part of the bulletin.
MQ5: Investment by Insurance Companies, Pension Funds and Trusts
Public Sector interventions in the Financial Crisis
Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: email@example.com
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 selections of individual series.
Code of Practice for Official Statistics
National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.
The UK Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.
Designation can be broadly interpreted to mean that the statistics:
- meet identified user needs
- are well explained and readily accessible
- are produced according to sound methods
- are managed impartially and objectively in the public interest
Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.
Copyright and reproduction
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You may use or re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence, or write to: The Information Policy Team, The National Archives, Kew, London TW9 4DU.
The share ownership data are used to improve the sector breakdown of the ownership of shares in the National Accounts and to assign the dividends received to the correct sector of ownership. This use essentially defines the concept of beneficial ownership – the beneficial owner is the person or organisation who benefits from the dividends or increases in the share price.
The beneficial owner is not necessarily the person or organisation managing the shares or the registered owner whose name appears on the share register and on CREST. In particular, since the dematerialisation of shares in 1996 there has been a growing trend towards investors using pooled nominee accounts: at the end of 2014, 58.4% of the total value of UK shares was held by multiple ownership pooled nominees, or those where the beneficial owner was not known. In these cases, in order to identify the true beneficiary, further analysis needs to be conducted on the accounts.
The difficulties in identifying the beneficial owner can lead to differences between different outputs even where they are trying to measure the same thing (this is over and above any differences that might result from factors such as differing sample sizes). There are a number of holdings which are difficult to analyse conclusively and judgements sometimes need to be made based on the information available. This is why it is important to use the services of a specialist company in this area.
Other outputs can sometimes be measuring something different, such as economic exposure or interest. The ONS statistical bulletin MQ5: Investment by Insurance Companies, Pension Funds and Trusts also reports investment in UK quoted shares by insurance companies. The numbers can sometimes differ significantly from the figures reported here. The difference could in part be attributed to funds and other investment instruments run by insurance companies, which the 2014 Share Ownership Survey categorises as other financial institutions. In addition, the analysis of share registers to identify the true ownership of pooled nominee accounts classifies pension funds run by insurance companies as pension funds.
The analysis published in this Bulletin is a snapshot, taken at 31 December. At any one point in time shares might have been lent or sold but CREST may not have been updated in time for the snapshot; or CREST might have been updated where the change of ownership, although real, is only temporary. The following examples illustrate some of the difficulties in identifying or defining ownership:
- if a bank holds shares as a depository for an insurance company, then they should still be classified to the insurance sector as ownership will not have changed
- shares are regularly lent between sectors. In principle, these should be recorded under the sector borrowing the shares as ownership has changed. In practice, some depositaries disclose lent shares and it may not be possible to identify which shares have been lent. There is the further issue that if shares on loan are recorded as with the new owner, shares that move in the other direction should be treated in the same way; however, there may be an interest in recording the gross position, representing economic exposure or interest rather than ownership
- if the insurance sector puts up shares for collateral for a financial transaction it may not be clear who owns the shares. An example is where an open derivative position is held and the shares are used as collateral. The shares may be reregistered and then classified as other financial institutions but the beneficial ownership remains with the party that has lodged the collateral.
Accounts should be classified according to the category of beneficial owner of the securities. 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’.
- Individuals: Includes holdings owned by individual persons resident in the UK (whether registered in their own name, through an Individual Savings Account (ISA), Self-Invested Personal Pension (SIPP) or tax-incentivised plan, or as customers of a stockbroker; 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 ISAs run by them.
- Unit trusts: Comprises authorised unit trusts, including ISAs run by unit trusts. Open-ended investment companies (OEICs) are now included in this category, rather than investment trusts as both unit trust 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). Part of the “public sector” category in the final results.
- Local government: Includes holdings held directly by local authorities. Securities owned by local authority superannuation funds should be classified to pension funds. Part of the “public sector” category in the final results.
- 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. Part of the “public sector” category in the final results.
- Non-resident: owner in EU: All institutions or individuals resident in countries of the European Union other than the UK. Part of the “rest of the world” category in the final results.
- 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. Part of the “Rest of the World” category in the final results.
Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: firstname.lastname@example.org
14 . Methodology
Contact details for this Statistical bulletin
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