Final report recommends the digitisation of UK shareholdings through a fully intermediated system of shareholding, with an interim phase of digitised share registers.

By Mark Austin CBE, James Inness, Anna Ngo, and Johannes Poon

On 15 July 2025, the Digitisation Taskforce, chaired by Sir Douglas Flint, published its final report, marking a significant milestone in the journey towards digitising the UK shareholding framework. Its findings have been welcomed by HM Treasury on behalf of the UK government, which has said that its recommendations will be implemented in full.

The comprehensive report outlines the staged plan by which paper share certificates will be eliminated and all shareholders will hold through the intermediated securities chain. This will allow them to exercise their shareholder rights more effectively, while also reducing costs for issuers.

Key Proposals for Digitisation

The final report, following extensive stakeholder engagement since the interim report in July 2023, recommends a phased approach to digitisation:

• Step 1: Replace paper-based/certificated share registers with digitised registers, temporarily replicating the current system, but without paper certificates.
• Step 2: Enhance the intermediated system to ensure ultimate beneficial owners can efficiently exercise their rights through intermediaries.
• Step 3: Once the improvements to the intermediated system have been made, complete the transition to a fully intermediated system, potentially making digitised registers a “one-way street” and setting a “sunset date” by which all shares need to move to the intermediated system.

The report proposes the establishment of a Technical Group to oversee the digitisation process, ensuring collaboration with industry stakeholders to implement Step 1 and develop detailed plans for Steps 2 and 3.

Implications for Issuers and Investors

• Issuers: The digitisation initiative targets publicly traded companies, excluding private entities. The Digitisation Taskforce’s proposed shift to electronic communication and payments promises to reduce issuer costs and environmental waste, streamlining shareholder communication by reducing printed materials.
  The proposals envisage that issuers would be required to maintain temporary digital share registers, prohibiting the issuance of physical share certificates, until the move to a fully intermediated system of shareholding. Companies would also be expected to keep their shareholders informed about the digitisation process.
• Investors: Current certificated shareholders will retain their rights during the initial digitisation phase notwithstanding the elimination of paper certificates, ensuring that they will receive the same service and ability to exercise their shareholder rights as they do now.
  The report further proposes measures to ensure that ultimate beneficial owners within the intermediated securities chain would be able to exercise shareholder rights that are presently only guaranteed for registered shareholders, as well as measures to enhance communication between companies and ultimate beneficial owners.

Timing and Next Steps

The UK government has expressed its support for the staged approach towards the implementation of a fully intermediated system of shareholding and has accepted all of the Digitisation Taskforce’s recommendations made to the government.