Policy paper

Government response to Digitisation Taskforce final report

Published 15 July 2025

The government is pleased to respond today to the report it has received from the Digitisation Taskforce. The Taskforce, chaired by Sir Douglas Flint, has been assessing how the UK can eliminate the use of paper share certificates for traded companies, which create inefficiencies and costs for companies and investors, and improve the intermediated system of share ownership so that investors are better able to exercise rights associated with shares which intermediaries hold on their behalf. These are important steps as part of the government’s Wholesale Financial Markets Digital Strategy to make UK capital markets more efficient, resilient and competitive.  

The Taskforce published an interim report in July 2023 which asked stakeholders for their input and sought feedback on their initial proposals. Following this feedback and further engagement, the final report recommends three steps for delivering the digitisation of share certificates:

• Step 1 – Firstly, existing paper-based or ‘certificated’ share registers should be replaced by ‘digitised’ share registers, temporarily replicating the system as it exists today but without paper share certificates.
• Step 2 – Secondly, improvements should be made to the intermediated system to facilitate the ability for beneficial owners of shares to exercise their rights effectively and efficiently through intermediaries.
• Step 3 – Finally, once these improvements have been made, all shares should transition into the intermediated system. The report recommends 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.

The report recommends that the government should set up a Technical Group, with experts from different parts of the sector, to finalise the digitisation process – including working with industry stakeholders to deliver Step 1 and setting a precise date for this to take place, and creating a detailed plan for the changes which the market will need to make as part of Steps 2 and 3.

A full list of the recommendations in the report can be found on page 14, including a comprehensive package of measures which would enhance the service that beneficial owners receive under the intermediated system.

The government supports the staged approach set out in the Taskforce’s report and accepts all the recommendations made to the government. This approach will remove the inefficiencies caused by remaining paper shares while providing time for the necessary improvements to be made to the intermediated system before all shares are migrated into it.

The government also agrees with the recommendation to move to a fully intermediated system of shareholding in the UK and to consider ways of delivering this transition, such as making the digitised registers a ‘one-way street’ in future. This step should take place after the necessary improvements have been made in Step 2 to facilitate the ability of beneficial owners of shares to effectively and efficiently exercise their rights through intermediaries (as set out in the original Terms of Reference for this Taskforce). To reinforce this, the government will set criteria which should be met before Step 3 takes place. This will include ensuring that the needs of vulnerable and older investors are considered and accounted for when transitioning shares into the intermediated system. These criteria will form part of the terms of reference for the recommended Technical Group.

The government therefore intends to:

• Legislate to end the issuance of paper shares and require companies to replace paper share registers with digitised share registers. The government aims to deliver this by the end of 2027 at the latest, with a precise date to be determined by the recommended Technical Group.
• Amend relevant legislation so that shares in UK companies can be held on overseas branch registers in uncertificated form. The government aims to deliver this by Q2 2027 at the latest, so that UK firms listed in Hong Kong can participate in the dematerialisation of shares on the Hong Kong Stock Exchange.
• Take forward the recommendations made to the government which need to be delivered through legislation as part of Step 2. A full list of these measures can be found on page 28 of the report. The government aims to deliver these over the course of this Parliament.
• Appoint an industry Chair to establish and lead the recommended Technical Group on this topic. The government will publish terms of reference detailing the setup and objectives of the group and a timeline for it to report back to the government with its implementation plan.

The government would like to thank Sir Douglas and the Taskforce for their work on this important issue. The government is confident that the approach he recommends will deliver the benefits of removing paper shares relatively quickly while setting a path towards a fully digital, modern and efficient system of share ownership in the UK.