DEMAT and Share Digitisation in the UK
The UK government is moving to fully digitise shareholding by abolishing paper share certificates by the end of 2027. The Dematerialisation Market Action Taskforce (DEMAT) was set up to implement the recommendations of the Digitisation Taskforce, which proposed a three-step plan:
- Replace paper share registers with digital ones by 2027.
- Improve the intermediated system so beneficial owners can exercise their rights more easily, with changes expected by 2029.
- Transition all shares into the intermediated system, using methods such as a ‘one-way street’ for corporate actions or a set deadline.
Key challenges include ensuring record accuracy, protecting investor rights, updating legal frameworks, handling untraced owners, upgrading infrastructure, and educating investors. There are also concerns about overreliance on intermediaries and maintaining shareholder autonomy.
DEMAT will report to the government by summer 2026 with a recommended go-live date and an implementation plan. The move is a significant step in modernising UK capital markets, and all stakeholders will need to prepare for the operational, legal, and technological changes required.
For more information with respect to this, please do not hesitate to contact Daniel Bellau, or any other member of the Corporate team.
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