Dematerialisation: What Should Issuers Be Doing Now?

The UK’s move towards a fully digital shareholding framework is taking another significant step forward. 

In July 2026, the Dematerialisation Market Action Taskforce (DEMAT) published its implementation plan for the withdrawal of paper share certificates. The journey has three stages, beginning with the removal of paper certificates and creation of digital registers before improvements are made to the intermediated system and, ultimately, shares move into an improved intermediated model.

For issuers and shareholders, that naturally raises questions about what happens next.

In our recent Equiniti webinar, our experts explored the latest developments and what organisations should be thinking about as the market prepares for change.

It starts with removing paper 

The first thing to understand is the scope of Step One, which is due by late 2027.

Paper share certificates will cease to provide evidence of ownership for in-scope securities, with the definitive shareholder record going digital. Step One is an interim stage, ahead of further changes to the intermediated shareholding framework under Steps Two and Three.

Much therefore stays familiar for directly registered shareholders during this initial transition.

Dematerialisation represents a major change to market infrastructure, but it does not mean shareholders need to take immediate action simply because paper certificates are being withdrawn.

As our experts explained during the webinar, communications will need to clarify not only what dematerialisation means, but:

“More importantly, [clarify] that there will be no mandatory action needed to be undertaken.”  

Communication will be critical 

For Equiniti, one of the most important considerations is how the industry takes shareholders on this journey.

Many investors own shares in more than one company. Consistency will therefore matter when explaining the changes and what shareholders need to know.

DEMAT is expected to provide template wording to help registrars and companies communicate aligned messages, alongside online content supporting shareholders through the transition. Equiniti is also preparing how to support issuers with tailored communication plans as greater detail becomes available.

And communication shouldn't necessarily end when the initial change takes place. Shareholders may only encounter the practical effects of dematerialisation when they subsequently need to do something with their holding, such as selling shares or dealing with an estate.

What should issuers consider now 

The message from our webinar was not that issuers should rush to make changes.

There are, however, sensible areas to keep under review:

• Existing processes that rely on paper share certificates will need to operate differently in a certificate-free environment. Equiniti is reviewing the journeys supported by our core systems to accommodate this change and prevent future certificates from being produced.
• Articles of Association will also form part of the conversation. The webinar noted that the relevant statutory instrument to effect this change will override any provisions in a company’s Articles of Association, with this not expected to be laid before Parliament until summer 2027.
• Model provisions are expected to be produced to enable companies to update their Articles of Association to align to the new legislation.

The key is therefore preparation rather than panic. As one of our speakers put it during the discussion:

“The change will not need to be made to articles prior to the delivery of Step One.” 

Issuers can therefore continue to monitor developments and consider how their articles may need to be aligned once the statutory instrument and model provisions become available.

Preparing for a more digital future 

Step One is an initial part of a much wider journey. Steps Two and Three will consider improvements to the intermediated system and the eventual transition towards a fully digital model of share ownership within the intermediated system of holding shares.

For issuers, now is an opportunity to understand the direction of travel, consider where existing processes may eventually need to change, and prepare for clear, consistent shareholder communications.