The Board notes that the market for shareholder services is a national market, which is currently moderately concentrated. 6 FCTC is the second largest shareholder servicing operation in the United States, managing approximately 12.1 million shareholder accounts, representing approximately 17.2 percent of total accounts in the United States. Boston EquiServe is the third largest shareholder servicing operation in the United States, managing approximately 11.5 million shareholder accounts, representing approximately 16.3 percent of total accounts in the United States. On consummation of this proposal, EquiServe would become the largest shareholder servicing operation in the United States, managing approximately 23.6 million accounts, representing approximately 33.5 percent of total accounts in the United States. The structure of the market for shareholder services mitigates the adverse effects of this proposal.
Many companies choose to be self-providers of shareholder services.
Moreover, the decision by several large companies that currently are self-providers to outsource the function could significantly change the market share of a successful bidder for that business. In addition, there are numerous potential entrants into this market. Currently, more than 200 firms specialize in providing shareholder services to groups of affiliated investment companies. Although only a few firms provide shareholder services to industrial or financial companies and to investment company groups, many of the activities and organizational features of the types of firms that provide shareholder services to investment company groups are similar to those activities of firms providing these services to industrial or financial companies. The investment company shareholder servicers appear to be fully capable of entering the commercial services industry with little difficulty.