Dematerialisation update: DEMAT have published their Dematerialisation Market Action Taskforce Report

The Report reaffirmed that ownership of UK shares will be solely evidenced electronically by the end of 2027, with legislation coming earlier that year. The report positions Model 1 as an interim step towards a fully intermediated securities system (“Model 3”), in which shares are held through an intermediary operating within CREST, transitioning from the end of the current Parliament (July 2029).

What the report covers

• Removal of paper certificates: Paper certificates will cease to be evidence of ownership. Shareholdings will instead be evidenced through digital registers, with no requirement for shareholders to surrender existing certificates.
• Modernisation of stock transfers: Legislation will enable digital transfers and electronic signatures while retaining physical transfer options, with issuers and registrars retaining discretion over transfer methods.
• Digital register operation: Government-endorsed standards will support digital registers, shareholder access to holding information, stronger transfer security measures and existing powers to refuse registration. 
• Stamp duty: The Taskforce supports aligning dematerialisation with the introduction of the proposed Securities Transfer Tax, replacing existing stamp duty regimes. 
• Issuer preparation: Companies will not be required to amend articles, but are encouraged to update outdated certificate references. GC100 will develop model drafting and guidance. 
• Branch registers and international listings: Legislative changes will support digitised branch registers, provide flexibility for international structures and address transfer processes in future market reforms. 
• Awareness Campaign: A coordinated awareness campaign will educate shareholders on the reforms through consistent messaging, guidance materials and a dedicated government information website.

Next steps

• Late 2026: National public awareness campaign begins, coordinated by DEMAT and delivered through companies, registrars, brokers, investment platforms and stakeholder organisations
• Summer 2027: Draft Statutory Instrument presented to Parliament. DEMAT's second report will address the longer-term transition to Models 2 and 3
• Late 2027: Model 1 goes live and paper share certificates cease to be valid evidence of ownership
• 2028 onwards: Many listed companies are expected to update their articles of association to remove outdated references to paper certificates

Read the report

If you’d like to hear more about dematerialisation, please contact one of our team at our Dematerialisation hub.