Q3 2026 saw the digitisation of UK equity markets moving from strategy to delivery. Multiple programmes are moving into implementation rather than policy design. Some of the key programmes are highlighted below:
Modernising Corporate Reporting: A New Chapter for Digital Shareholder Engagement
On the 7 September, the government published its long-awaited consultation on modernising corporate reporting, which closes for responses on 30 November 2026. This brings together a number of reforms of interest to issuers and ourselves, namely virtual AGMs, electronic shareholder communications, directors’ remuneration voting, digital reporting, and shareholder digitisation.
Dematerialisation of Shares
The DEMAT (Dematerialisation Market Action Taskforce) published their Implementation Plan for the Withdrawal of Paper Share Certificates, with expected implementation in Q4 2027 and a shareholder awareness campaign indicated to begin in H2 2026.
T+1 Settlement
As the implementation date is now a year away, market participants are working together to prepare for go-live on 11 October 2027.
Tokenisation
This is a rapidly developing area, with the publication of the Wholesale Digital Champions report in July 2026, the response to the Call for Input by the FCA and Bank of England, and the LSEG announcement that, through a partnership with Payward, their forthcoming LSE 24 digital trading platform will trade in synthetic tokens (or xStocks) representing shares of the top 100 UK companies.
Stamp Taxes Modernisation
A modernisation agenda is progressing, proposing a new Securities Transfer Tax which has seen draft legislation published, with a targeted implementation date of 2027. A further update on the commencement date is expected in autumn 2026.
The UK's market reform agenda increasingly looks like a connected programme rather than a series of individual initiatives. Whether considering dematerialisation, electronic shareholder communications, digital reporting, T+1 settlement or tokenisation, the common thread is a move towards a more digital, efficient, and connected shareholding framework. For issuers, the focus is increasingly shifting from understanding what may happen next to preparing for what is now being implemented. Read more about these programmes below:
- Virtual Annual General Meetings (AGMs): from discussion to consultation - Virtual AGMs move one step closer to legal certainty
- Default electronic shareholder communications - Could default electronic communications transform shareholder engagement?
- Directors’ Remuneration: removal of the annual vote? - Consulting on proposing to remove the annual advisory vote
- DEMAT: the conversation has changed - DEMAT moves from concept to implementation
- T+1 Settlement: the clock is ticking - T+1 moves from planning to execution
- Tokenisation and Digital Securities - Tokenisation moves from exploration to testing
- Stamp Taxes Modernisation - A digital-first replacement for Stamp Duty and SDRT
Virtual Annual General Meetings (AGMs): from discussion to consultation
In the Q2 update, we were awaiting further details of the government’s wider consultation on corporate reporting. We now have draft policy on this area following the publication of the consultation on modernising corporate reporting. The consultation considers the concerns raised, that the Companies Act 2006 does not clearly address how the requirement for notices of AGMs to include the ‘place’ of the meeting relates to virtual locations. The government is interested in understanding if shareholder safeguards would be appropriate when clarifying that ‘place’ can include a fully virtual location, with the specific consultation question looking for responses to: “The government will make clear that a virtual location is considered a place in relation to AGMs and other meetings. Are there any additional shareholder safeguards that should accompany this change?”
With the government expecting to publish a report six months after the close of the consultation, could this mean change on the horizon from mid-2027 onwards? And what could that mean for the future of AGMs for issuers and their shareholders? Legal clarity is the first step in this journey, with shareholder consent remaining central and additional safeguards under consideration. As the digitisation of UK capital markets progresses, we will be interested to see how this legislative change will impact on market practice.
Read our research on changes to company Articles of Association from January 2023 to June 2026 as companies and shareholders determine how to regulate the running of the company going forwards, including those companies who have made changes to the format of holding general meetings.
Default electronic shareholder communications
Government has now accepted the recommendation that companies should be able to communicate electronically with shareholders without needing prior consent, while retaining a shareholder right to opt back into paper communications. This is part of the consultation on Modernising Corporate Reporting and forms part of Step 2 of the Digitisation of the UK Shareholding Framework recommendations.
At the same time, the government agrees that individual shareholders should have a right to opt in to receiving hard copy communications and companies will still be required to contact shareholders individually by electronic means (typically via email) to alert them to any new documents being available to view on the company website (for example, the annual report and accounts). This change should significantly cut the costs associated with shareholder communications.
The government is interested in responses to the question: “The government has committed to making electronic communication with shareholders the default option. What factors should the government consider when introducing this change?”
For issuers this change will potentially impact on the distribution of annual reports, AGM notices, circulars, shareholder engagement and communication costs.
The July 2026 DEMAT Step 1 report includes a proposal that any failure to provide electronic communication details could mean that the issuer is not obliged to communicate or deliver information to the shareholder until electronic communication details are provided, although this would be subject to any rights shareholders have to opt-in to receive hard copies or where communications are required to be made in hard copy form.
Directors’ Remuneration: removal of the annual vote?
Whilst the consultation on modernising corporate reporting considers in detail the topic of simplifying remuneration reporting, the subject of the annual advisory vote on the directors’ remuneration report will be of interest to both issuers and their shareholders. The government is consulting on removing this annual advisory vote while retaining remuneration disclosures and the binding remuneration policy vote, which typically takes place at a minimum once every three years. In its rationale, the government considers that as a non-binding vote on an area already agreed through the remuneration policy this takes up shareholder and company time and resource which could be directed to other matters at the AGM.
The specific consultation question asks for responses on: “Do you agree or disagree with the proposal to remove the shareholders’ annual advisory vote on the directors’ remuneration report? Please explain your answer”.
Director remuneration is a subject that has historically gathered considerable attention, both at AGMs and occasionally in the media. Will a potential legislative overhaul in this area lead to changes in how director remuneration is approached and considered? The impacts for AGM agendas, shareholder voting, and proxy advisor engagement are just some of the areas for consideration.
DEMAT: the conversation has changed
In July 2026 the DEMAT (Dematerialisation Market Action Taskforce) published its Implementation Plan for the Withdrawal of Paper Share Certificates, which is Step 1 of the digitisation of the UK shareholding framework. Often considered by many as the “simplest” of the Steps to implement, it is however a major milestone to digitising the UK shareholding framework, and one which the registrar industry continues to play a major role in as we now move into implementation phase. With the expected implementation date of Q4 2027, we have continued to support delivery of this through:
- Operational standards: developing the industry operational standards to deliver changes to many operational processes that currently require the use of a paper share certificate as evidence of ownership.
- Shareholder awareness campaign: DEMAT has indicated that the shareholder awareness campaign will begin in the second half of 2026, and with issuers seeking guidance on what this could mean, we have been working on providing our knowledge and experience on what a shareholder communications approach, core messaging, and FAQs could be.
- Legislative change: we have been supporting the work of DEMAT and government on the legislative changes required for the withdrawal of paper share certificates. The DEMAT report indicates that draft legislation will be provided in Summer 2027, and we expect this to over-ride provisions in an issuers’ Articles of Association. Issuers may choose to update their Articles of Association following the effective date, and therefore from their 2028 AGMs onwards.
Our Dematerialisation and Digitisation Hub for issuers, is a useful resource to refer to, in gaining an understanding of the latest position on the dematerialisation programme.
T+1 Settlement: the clock is ticking
With a year to go to the implementation of T+1, the FCA has become firmer in its messaging to firms, expecting them to finalise plans now, implement system changes, and prepare for testing by the end of 2026.
The UK is currently settling trades on T+2, whilst the US and other jurisdictions have moved to T+1. The implementation date of 11 October 2027 will align both the UK and EU with this accelerated settlement of trades. In the rapidly changing environment of potential tokenisation of equity and “atomic settlement” (the ability for settlement to happen instantaneously) a move to T+1 for the current equity capital markets and market infrastructure is necessary.
Tokenisation and Digital Securities
Since the last update there have been a number of notable developments. The first report from the Wholesale Digital Markets Champion was released in July 2026 and the FCA and Bank of England published their Feedback Statement on their Call for Input on the future of tokenisation. The FCA and Bank of England will now produce a joint tokenisation roadmap later in 2026 which will set out target dates for their work on the supporting regulation of the tokenisation of the wholesale market.
In its simplest explanation, for those new to tokenisation, the FCA explains that tokenisation is the digital representation of assets and their ownership using distributed ledger technology.
We have also seen the LSE announce their partnership with Payward to allow trading of tokens representing shares of FTSE 100 listed companies. These tokens will be available to international investors from a number of countries but will not be available to UK investors. The LSE will support trading of these assets on its new LSE 24 venue, which will offer extended trading hours, subject to regulatory approval.
Given the rapidly developing environment of tokenised equities, it will be important for UK issuers to keep abreast of developments. EQ has a dedicated webpage on Tokenisation and Digital Ownership where you can find more information to understand what tokenisation is and what this could mean for issuers, shareholders and the future of capital markets which can be found here.
Stamp Taxes Modernisation
Government published draft legislation proposing a new Securities Transfer Tax to replace Stamp Duty and SDRT (Stamp Duty Reserve Tax). The consultation closed on 7 September 2026, and government is targeting an implementation date during 2027. A further update on the commencement date is expected in autumn 2026. Modernisation includes the introduction of an online portal for the self- assessment and payment of the tax.
The DEMAT July 2026 report makes reference to the anticipated new Securities Transfer Tax and online portal and the proposals to ensure that there are no undue delays in updating share registers.