| What is coming | digital share registers required, paper certificates no longer proof of ownership |
| For whom | all publicly traded UK companies |
| When | legislation to take effect before the end of 2027, date to follow |
| Shareholders | need do nothing in the first phase, rights unaffected |
| Basis | Digitisation Taskforce (July 2025), DEMAT implementation plan (14 July 2026) |
| Updated | November 2026 |
What dematerialisation means
Dematerialisation means the share no longer exists as a paper certificate, only as an entry in an electronic register. In the UK that is the CREST system, an electronic register of shares and shareholders through which shares are transferred electronically. Buy on the stock market today and you almost never receive paper. On AIM it is even a rule: shares there must be eligible for electronic settlement.
Alongside that, there are still shareholders today who hold their shares directly and on paper, with a certificate in a folder. That is the part now set to disappear.
What the government has decided
It began with the Digitisation Taskforce chaired by Sir Douglas Flint. Its final report of July 2025 recommended a staged approach: first move paper registers to digital registers, then improve the intermediated system through brokers and platforms, and finally move all shares there. The government accepted this plan in three steps.
For the first step, the Dematerialisation Market Action Taskforce (DEMAT), chaired by Mark Austin, published its implementation plan on 14 July 2026, and the government accepted it. It intends to require by law that all publicly traded UK companies keep digital share registers and that paper shares in those companies no longer count as proof of ownership. The legislation is due to take effect before the end of 2027; the government will announce the exact date.
The three steps at a glance
This is how the taskforce and the government describe the road. Only the first step has a timeframe so far.
| Step | Content | Timeframe |
|---|---|---|
| 1 | abolish paper shares, digital registers for traded companies | legislation before the end of 2027 |
| 2 | improve the exercise of rights through brokers and platforms | during the current Parliament |
| 3 | move all shares into the intermediated system | once criteria set by the government are met |
GOV.UK: Digitisation Taskforce (July 2025); Government response to DEMAT Implementation Plan (July 2026)
What it means for shareholders
For shareholders holding paper certificates, the key news is that they need do nothing in the first phase. Companies and their registrars organise the change, supported by DEMAT, and shareholders' rights are unaffected. The certificate in the safe deposit box does not become worthless; it simply stops being the proof. The proof is the entry in the digital register.
Before the final step, full intermediation, the government is to set criteria first. The needs of older and vulnerable investors are named expressly. If you hold your shares directly today and want to keep it that way, you have time, but not for ever.
What it means for your PLC
The announced duty applies to publicly traded companies. If your PLC is not quoted on a trading venue, the government response means nothing changes for it directly in this first step. With a listing, though, the topic becomes yours at the latest, because a clean register capable of electronic settlement is then part of the basic kit anyway.
From the company secretary's side the preparation is unspectacular, and yet it is what everything hangs on: every transfer in the register documented, every share class unambiguous, every address current. The share's identifiers, the ISIN in particular, should be settled. How to obtain them is under LEI and ISIN. DEMAT also intends to publish operational standards for digital share registers. Once they are out, we align your PLC's register keeping with them.
Transfers and stamp duty: what stays the same
Dematerialisation changes how ownership is proved, not whether a transfer is taxed. Buy existing shares electronically through CREST and you pay Stamp Duty Reserve Tax, deducted automatically. Transfer outside CREST and the tax is still due, only nobody deducts it automatically, and HMRC has to be told in writing.
In PLCs with few shareholders who move shares between themselves, this is often forgotten. A digital register makes such transfers more visible, not tax-free. Rates and exemptions are collected under UK PLC tax.
Sources: GOV.UK: Government response to DEMAT Implementation Plan, July 2026; GOV.UK: Dematerialisation Market Action Taskforce; GOV.UK: Digitisation Taskforce, July 2025; GOV.UK: Tax when you buy shares (CREST); London Stock Exchange: AIM Rules for Companies (August 2026)
