UK Shareholders (led by Charles Henderson) and ShareSoc (led by Mark Northway) were advisers to the Digitisation Task Force. The recommendations in the Digitisation Task Force’s final report are a step forward for modernisation and, if done properly, for governance.
UK Shareholders and ShareSoc have agreed a joint position on the Digitisation Taskforce’s final report.
We support the final report’s recommended path to digitisation through implementation of a fully intermediated securities chain. We recognise it has the potential to enhance shareholder engagement and reduce administrative burden and cost. It can also strengthen the transparency and effectiveness of underlying beneficial owners’ (UBOs’) stewardship and, as a result, improve corporate governance.
We particularly welcome the Taskforce’s recognition of the need for a legislated Shareholder and Underlying Beneficial Owner Bill of Rights. While critical details remain to be refined, this initiative provides a valuable framework for ensuring that all investors, whether on the share register or a UBO, retain meaningful participation in company decision‑making.
We look forward to engaging constructively with the Dematerialisation Market Action Taskforce (DEMAT) under its Chairman, Mark Austin, in its upcoming roundtables and over the coming years as it implements digitisation.
This implementation will be in three stages:
- Step 1 – existing paper-based or ‘certificated’ share registers will be replaced by ‘digitised’ share registers, temporarily replicating the system as it exists today but without paper share certificates. This will happen before the end of 2027.
- Step 2 – improvements will be made to the intermediated system, in which most shares are already held, to facilitate the ability of beneficial owners of shares to exercise their rights effectively and efficiently through intermediaries. These improvements will be made over the course of this Parliament.
- Step 3 – once these improvements have been made, shares on the temporary digitised registers will transition into the intermediated system. The report recommended considering methods for delivering this transition, such as making the digitised registers a ‘one-way street’, with shares moving into the intermediated system when shareholders take corporate actions, and/or setting a ‘sunset date’ by which all shares need to move.
