On 15 July 2025, the Digitisation Taskforce, chaired by Sir Douglas Flint, published its final report on modernising the UK shareholding framework.
The Digitisation Taskforce’s report focuses on transitioning from paper-based to digital processes, particularly in the context of moving from physical to digital share certificates and shareholder communication. The report proposes ending the issuance of physical share certificates and establishing temporary digital share registers, requiring companies to maintain them until a fully intermediated system of shareholdings is in place. The report also emphasises the need to ensure shareholders, particularly those in the intermediated system, can exercise their rights and receive proper communication during this transition.
On 25 July 2025, the UK Government accepted the Taskforce’s recommendations and confirmed it will legislate to eliminate paper share certificates for publicly‑traded UK companies and introduce digitised share registers, aiming to deliver this “Step 1” by the end of 2027.
MSP Company Secretarial can provide support for your transition from physical to digital share registration and administration. For more information, speak to us here.
Who is in Scope for the transition to digital share certificates?
Organisations in scope for digital transition:
UK incorporated companies whose shares may be purchased and traded by the public (e.g., Main Market and AIM issuers).
Overseas branch registers: legislation is planned so UK companies with, for example, a Hong Kong branch register, can hold shares as ‘digital shares’ (i.e in dematerialised form). The aim for this is to be completed by Q2 2027.
Private companies: There is no mandate for a move to digital shares at this time, though electronic communications and payments remain best practice.
Although this is a UK initiative, there is a desire that the proposals will also be rolled out to the Isle of Man, Jersey and Guernsey jurisdictions.
The Digitisation Taskforce recommendations: What’s changing?
The first transition stage from physical to digital shares
The shift to a digital share register:
The Taskforce’s core recommendation is a move from paper-based share certificates to a digital share certificate system for publicly traded companies.
Temporary digital shareholding registers:
Companies will be required to establish and maintain digital share registers as a temporary measure, replacing the need for physical certificates. It should be noted that all the share registers maintained by MSP Share Registrars are already in digital format.
Shareholder rights:
The report addresses the need to protect shareholder rights during the transition, ensuring that current certificated shareholders can still exercise their rights as they do now.
Shareholder communication enhancement:
The Taskforce emphasises the importance of clear and consistent communication between companies and their shareholders during the digitisation process.
It is also proposed that the current system of allowing shareholders to opt in to receive communication via email will become an opt-out system. This change will improve the speed of shareholder communications and secure cost savings for companies.
An intermediated system:
The report includes provisions to ensure that ultimate beneficial owners within the intermediated securities chain can exercise their shareholder rights.
The implementation timeline for the transition to digital share registers:
The government has indicated it intends to legislate to end the issuance of paper shares and mandate digital share registers by the end of 2027. The Taskforce recommends that the government establish a Technical Group of relevant experts as soon as possible to determine an implementation plan for this first stage.
If you require any more information or support about the actions required in the first stage of digital share transition, please contact MSP Company Secretarial here.
The second stage
The next stage is to reform the intermediated system where investors hold their shares through intermediaries such as brokers or custodians. The target is to ensure these investors can exercise their rights (including voting and receiving information) more effectively and transparently. It is recommended that these reforms take place within the life of the current parliament, meaning they should be completed or in progress by 2029.
The final stage of share digitalisation
The final stage of the reforms is to transition all shares not currently held through intermediaries into the intermediated securities chain. This is expected to take place once the fully intermediated system is in place, and two main options are being considered.
How can MSP Company Secretarial & Share Registrars Help?
We already hold our clients’ share registers in digital format. We introduced an online voting system in 2021 for client general meetings, which is increasingly popular among private shareholders.
Where clients have followed the shareholder consent process required by the Companies Act, we notify clients by email of the availability of information and documents on the company’s website.
We also offer shareholders secure access to their register account, which enables them, once registered, to view their holding(s), change their address, their communication preference and their dividend payment method.
We will keep our clients and their shareholders informed throughout this journey. There is no action that clients need to take at this stage.
If you would like to discuss what this means for you, please contact us.
Frequently asked questions about the Digitisation Taskforce
Will paper share certificates still be valid?
No. For in‑scope public companies, paper certificates will cease to be prima facie evidence of title once digitised registers go live. The digitised register becomes the authoritative record.
Can individuals still hold shares in their own name?
During Step 1, yes—via the digitised register that replicates today’s direct holding model without paper. The Government intends to migrate all holdings into an improved intermediated system at Step 3, but only after Step 2 investor‑protection changes are delivered and criteria are met.
Are private companies affected by recommendations from the Digitisation Taskforce?
There is no mandate for private companies to dematerialise at this stage. However, adopting electronic communications and payments is strongly recommended.
What about overseas branch registers, such as Hong Kong?
Legislation is planned so branch registers can be held in uncertificated form; the Government’s aim is by Q2 2027 support dematerialisation in those markets.