Dematerialisation and Issuer Agency: Insights from the QCA Annual Conference 2026

Each year, the Quoted Companies Alliance host their annual conference, bringing together issuers, advisers and other key industry stakeholders to help drive improvements to the UK public markets. As we gear up for some of the most pivotal changes the UK has experienced in decades, this article sets out some of the key takeaways from this event.

A consistent theme throughout the day was that this is not a single-issue challenge, as is often the case. Capital, culture and narrative were key discussion points which are all interlinked with progress dependant on addressing all three, ideally in parallel.

There was broad agreement that whilst smaller listed companies sit at the heart of the UK economy, they continue to face structural headwinds. Liquidity, visibility and retail participation came up repeatedly, alongside the need for greater stability in policy and regulation to allow companies to plan with confidence.

What also stood out was the focus on “self-help” across the ecosystem, from issuers telling a clearer story, to industry pushing for practical changes, to a more direct articulation of what is actually needed to unlock investment. Being laser focused on a small number of items was referenced as the best route forward with government in response to panels often articulating a long wish-list.

The discussion on market plumbing also highlighted tangible movement. The direction of travel on AIM reform, and the broader push to simplify and reduce costs while giving issuers more agency, felt increasingly deliberate. But equally there is a demand side challenge, particularly sustained outflows from UK funds and the underrepresentation of domestic investment, which remains unresolved.

Against that backdrop, the conversation between James Ashton and Mark Austin CBE, Chair of the Dematerialisation Market Action Taskforce (aptly abbreviated to 'DEMAT'), was particularly instructive. 

The message was clear: work to digitise the UK shareholding framework is firmly underway.

• The first report to HM Treasury is due imminently, with publication expected at the Mansion House Speech in July
• Step 1 and the removal of share certificates is slated for the end of 2027
• A full mandated move to an intermediated model (Step 3) remains the stated end point
• Delivery of Step 3 by the end of this Parliament in 2029 is still the working ambition

Importantly, the discussion reinforced that Step 1 is as much about communication as it is about process. With around 10 million paper certificates across 6 million shareholders, the immediate priority is awareness and ensuring investors understand what is changing, what it means for them, and what action they need to take. With an average 23% of issued share capital quoted as being held in certificated form for AIM companies these are not insignificant investors that the market can be complacent about.

For Steps 2 and 3, the signs were equally significant:

• Issuer representation is strengthening, with the QCA expected to play a more active role supporting the DEMAT
• The harder policy questions such as costs, intermediated structures, and the treatment of harder-to-reach shareholders were acknowledged as being central to the next phase
• Transparency is expected to be preserved, with enhancements to existing mechanisms (including s793) rather than a loss of issuer visibility through unintended consequences as seen with SRDII in some European markets
• Registrars were referenced as evolving rather than being displaced, playing a broader role in a digitised ecosystem (something I wholeheartedly agree with given the intrinsic value we represent to companies, broader market participants and the wider ecosystem)

Taken together it points to a clear trajectory, dematerialisation and digitisation are no longer theoretical with the Step 1 report nearly complete and a government decision pending on the DEMAT's proposed implementation plan.

However, there is still complexity to navigate and some genuinely difficult trade-offs ahead. But the direction feels settled, and the next 18 months will be critical in shaping how the Step 1 model will work in practice to ensure its success.

More broadly, the day reinforced a simple point that awareness creates momentum. The challenge now lies in converting that into sustained action across policy, markets and behaviour so that UK public markets remain a credible, competitive destination for growth capital - something the QCA and its members are clearly focused on.

There is a quote attributed to business leader and Ariel Investments co-CEO Mellody Hobson, "We have admired the problem long enough". This serves as a call to action to stop complaining, citing statistics, or endlessly discussing issues, and instead begin implementing practical solutions - the latter being something we are actively progressing at MUFG Corporate Markets as part of our work on dematerialisation for clients, their shareholders and the betterment of capital markets.

We remain committed to ensuring our issuers, and their shareholders are as prepared as possible - and that the transition to a fully digital shareholder eco-system is delivered with confidence.

Please contact us for more information on how we can help you manage this transition.