Press Release: Digitisation Taskforce Report

Final report is fatally flawed and could lead to shareholders losing their rights

Digitisation Taskforce has failed to address its Terms of Reference
City lobby’s influence outweighed shareholder interests
Move to fully intermediated (nominee) shareholding system fails to protect key shareholder rights
Proposed “Bill of Shareholder Rights” misses the mark
Report is silent on key stewardship issues
“Investor pays” access to rights will further diminish shareholder engagement
Critical checks and balances are at risk

London – 22nd July 2025

ShareSoc, the UK’s premier organisation representing individual investors, has today condemned the final report from the government’s Digitisation Taskforce, labelling its recommendations a “betrayal of investors” that puts shareholder democracy at risk.

The Digitisation Taskforce, comprising Sir Douglas Flint, Mark Austin and, latterly Chris Horton, has at long last released its long-awaited final report.

The report recommends the complete elimination of both paper share certificates and digitised share registers, forcing all UK investors into the intermediated (nominee) system, where shares are held on their behalf by financial institutions.

It suggests a series of enhancements to the nominee system, which has been heavily criticised for disenfranchising individual shareholders by largely ignoring the stewardship rights associated with share ownership.

ShareSoc warns that these enhancements fall short of the mark, and that the taskforce’s proposals contain fatal flaws that will strip essential rights from millions of investors and will erode their ability to hold company boards to account.

“This report fails to address some of the Digitisation Taskforce’s key objectives and is a significant blow to investors,” comments Mark Northway, ShareSoc policy director. “For over a decade, we have campaigned for every investor in UK shares to have full, frictionless access to the shareholder rights legally enshrined in the Companies Act.

This is a critical element of the checks and balances that hold company directors to account. The proposals in the final report show a clear bias in favour of issuers and financial institutions and threaten to further silence the voice of the investor.”

ShareSoc has identified two fundamental failures in the report:

1. Shareholder activism is at risk: the report proposes a “Shareholder Bill of Rights” which sets out a baseline service level for the facilitation of shareholder entitlements and rights to the ultimate beneficial owner (UBO). This focuses on information rights and on the right to vote and participate in general meetings.Critically, it fails to address and preserve other key shareholder rights including the rights to inspect and receive copies of the shareholder register, to submit statements and requisitions and to requisition meetings.

It also seeks to remove the headcount test for court sanction of schemes of arrangement (CA2006 S899) which protects minority shareholders in takeovers and delistings.

The protection of these rights is fundamental to good governance and to shareholder activism.

A further key proposal is to prevent investors with ‘proper purpose’ from having access to email addresses of other investors. This eliminates a huge potential benefit of digitisation: electronic communication between investors on stewardship matters including excessive executive pay, poor strategic / operational management, or environmental and social failings.

2. Investors are financially incentivised to opt out: although the report proposes a baseline service, it then completely undermines this concept by allowing intermediaries to offer a level of service without access to shareholder rights at a lower cost.

This creates a perverse financial incentive for investors to opt out, en masse, from the rights associated with their share investments. It also introduces the risk that nominees will introduce prohibitive charges for the baseline service, effectively penalising responsible shareholders (by way of example, IG currently charges its clients more than £100 to facilitate attendance at an AGM).

Allowing discriminatory pricing also degrades the rights of current certificated shareholders.

“This is a charter for boards to become unaccountable to shareholders,” Mark Northway continues. “It fails to protect key shareholder rights and introduces dangerous financial incentives which will further erode investor engagement.

It is particularly disappointing that the taskforce has chosen to prevent investors from leveraging digital technology to communicate between themselves by email. Without the threat of shareholder activism, many of the corporate governance improvements of the past twenty years would not have happened.”

ShareSoc is also calling for individual investor representation within the proposed Technical Group to ensure that the interests of the underlying investor are properly addressed during the implementation phase.

ShareSoc will continue to engage with Treasury to press for adjustments to be made to address these flaws and to ensure that the process of dematerialisation complies with the taskforce’s formal terms of reference.

About ShareSoc

ShareSoc (The UK Individual Shareholders Society) is the premier not-for-profit organisation dedicated to representing and supporting UK private investors. Through advocacy, education, and community-building, ShareSoc works to enhance the rights and opportunities of all individual investors.

The organisation campaigns for better corporate governance, provides resources to help investors make informed decisions, and offers a platform for connecting with like-minded investors. ShareSoc’s mission is to ensure that the voice of the individual investor is heard and respected in the UK’s financial markets. For more information, visit www.sharesoc.org.

Post Date: July 23, 2025

Damning ShareSoc Press Release on Digitisation Report – Roger W. Lawson's Blog says:

23rd July 2025 at 1:56 pm

[…] ShareSoc have issued a press release on the Final Digitisation Report issued by Sir Douglas Flint. It is highly critical of some aspects of the report and quite rightly so. See https://www.sharesoc.org/sharesoc-news/digitisation-taskforce-report/ […]

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Group description:	The aim of this group is to share our investing ideas and experiences across all equity markets, brokers, websites and software to the benefit of us all. We do not discuss sums of money invested but may mention percentages gained and lost. We will rotate the chairperson who is responsible for creating, with member’s help, suitable agendas. We also rotate members to deliver a presentation, lasting between 15 and 45 minutes, on a topic of their choosing.
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Group description:	A small group whose primary interests are equity and Investment Trusts.
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Group description:	We welcome anyone interested in investments regardless of their level of knowledge and experience.
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Press Release: Digitisation Taskforce Report

Final report is fatally flawed and could lead to shareholders losing their rights

About ShareSoc

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Group description:	Our group is interested in sustainable investing and our goal is to identify and evaluate businesses that will thrive through innovation and their transition to a ‘One Planet Economy’. By leveraging the skills of group members, we aim to deeply understand these businesses, particularly focusing on how they develop long-term valuable benefits for their customers. Each year, we plan to evaluate around seven businesses to identify opportunities where our valuation exceeds the market price. A successful outcome is defined as achieving a compound annual growth rate (CAGR), including dividends, of 10% over a decade.
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Group description:	An online group for those who are new to investing, or have only been investing for a few years. Including topics such as: – What is a share or a bond, why and how to buy them. – Comparing funds, unit trusts, Investment trusts and exchange traded funds. – Portfolio management and diversification. – ISAs, pensions, SIPPS and how to save tax. – How terms such as PE ratio and dividend yield are used to value a share. – How to use technical analysis or charting.
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Group description:	All levels of experience welcome. A typical meeting agenda includes: – Macro Environment – Trades: Members review existing positions and identify securities with promising TA entry patterns or setups and with suitable risk/reward. Any security, long, short, futures, options may be considered. The convener takes actual positions in trades and maintains his own detailed ledger, accurately measuring performance of individual securities and cumulative activity. Members are notified by e-mail prior to the entries or exits that are decided upon. Following each meeting an updated copy of the ledger is circulated together with the next meeting agenda. Members may wish to maintain similar ledgers of their own but there is no obligation to do so. – Technical Analysis: Techniques and systems used in trades. Members can request discussion of particular aspects of TA.
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