BT itself does not endorse any service for the buying or selling of shares. Stockbroking services are available through brokers and banks, some of which provide online dealing services. Only registered brokers can deal in the market - everyone else has to deal through them. This way, there is a controlled and regulated market.
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.
This is direct participation in the stock market - but investment can also be made in shares through unit or investment trusts, as part of a collective investment scheme. Pension schemes, life insurance policies, Personal Equity Plans, ISAs and unit trusts all invest in shares traded on the stock market.
Traditionally, shares have been held in paper form - a share certificate, evidencing ownership of the 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.
To sell your shares, you will normally need to deliver the original share certificate to your broker, who will ask you to complete some forms. You will receive payment (net of broker's commission) within a few days from the broker selling your shares.
When buying shares, you will need 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.
Telephone dealing services may also use traditional certificates following a purchase - but may not require them in order to sell (as they use high-security identification practices).
You can now hold shares as an electronic record, receiving a 'statement' periodically. 'Electronic shares' are held in a nominee account. Brokers often administer the shareholding on your behalf - you do not receive a share certificate, but you remain the beneficial owner of the shares, and you receive dividends.
The nominee can usually provide you with copies of the company's annual reports, (you can also request or download them online), and you should be able to 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 (CREST).
All shares in Personal Equity Plans and ISAs are held in nominee accounts.
When buying or selling shares, you will usually pay a broker's commission each time you buy or sell. There may be also be on-going costs (other than commission) for each transaction, or annual fees.
Additional stockbroking services may be available for additional fees - including investment advice and communication. Broadly, there are three levels, or types of stockbroker service:
execution only - you make all the investment decisions, tell your broker what to do, and communicate with your broker by post, telephone or internet. Also called discount brokers.
advisory dealing - a stockbroker listens to your ideas and offers advice or recommendations.
discretionary broking - you hand over control of your investments to an investment manager, who will act on your behalf, without consultation.
When you buy shares, you are liable to pay stamp duty (in the UK currently 0.5 per cent of the share price) but not when you sell.
How you choose to hold your shares may also influence costs - there may be an additional charge if you want to hold a traditional paper certificate.
The confirmed official opening prices for BT Group and mmO2 shares for Capital Gains Tax ('CGT') purposes, were 285.75 pence and 82.75 pence respectively. This means that, of the total value of 368.50 pence, 77.54% is attributable to BT Group and 22.46% to mmO2.
Accordingly, for CGT calculations, the base cost of your BT Group shares is calculated by multiplying the acquisition cost of your BT shareholding by 77.54%, and the base cost of your mmO2 shares is calculated by multiplying the acquisition cost of your BT shareholding by 22.46%.