Dematerialisation Readiness Strategy: From Preparation to Progress

As we outlined in the previous articles, Dematerialisation is no longer something on the distant horizon. Following the publication of the implementation plan earlier this year, the focus has firmly shifted from understanding what change is coming to preparing for it.

For many issuers, the key question is no longer if action is required, but how best to prepare shareholders and registers for a fully digital future.

With that in mind, we wanted to share an update on the progress of our Dematerialisation Readiness Strategy (DRS) and some of the insights emerging from the programme so far.

The response from impacted issuers has been encouraging. To date, over 80 clients have joined the proactive initiative, creating a strong platform for delivery across a significant number of share registers including many in the FTSE 350. Alongside confirmed participants, a pipeline of clients continues to evaluate the opportunity, reflecting the growing recognition that early preparation can reduce risk, improve shareholder engagement, mitigate queries, and simplify future implementation activities.

The programme itself is designed around three connected stages: improving data integrity, reconnecting dormant or disengaged shareholders, and preparing investors for dematerialisation through education and digital adoption activity. The objective is simple: help issuers and shareholders enter the Step 1 transition from the strongest possible starting position.

One of the most valuable aspects of the programme has been the evidence generated through our pilot activity and first tranche of live clients. While many organisations recognise there may be data quality challenges across their register, the results have highlighted the significant scope for improvement.

The Data Integrity stage (phase 1) identified that approximately 70% of the register required some form of update, with 54% of addresses updated to meet the national standard, ensuring best-in-class formatting and accuracy.  Perhaps more significant however is that at least 16% of shareholder records required some form of significant attention. This included shareholders who may no longer be at the registered address, potentially deceased shareholders (that we had not been informed about), and records where updated information was required to improve future communication effectiveness. Put simply, around one in every six shareholder records examined contained an issue significant enough that it could impact future engagement.

The findings also reinforced the importance of acting early. Mortality screening identified that 70% of these newly identified deceased shareholders had been deceased for more than two years, demonstrating how dormancy and disengagement can naturally build on a register over time. The longer these issues remain unresolved, the more difficult they become to address.

The Reconnect pilot (phase 2) has been equally encouraging. Working with an initial pilot issuer, shareholders were invited to update information, validate details and engage digitally. The programme generated a 21% response rate, while 59% of shareholders responding via our web form provided e-communications permissions, 41% updated address details, and 18% provided bank account information. These outcomes demonstrate that when shareholders are presented with a clear, convenient route to engage, a sizeable proportion choose to take action.

Beyond the statistics, perhaps the most important outcome is confidence. Confidence that shareholders can be successfully re-engaged. Confidence that data quality improvements can be achieved at scale. And confidence that our approach and the proactive preparation materially reduces the risk of shareholder disenfranchisement as the market transitions towards digital ownership models.

As we move into the next phases of delivery, including the Dematerialisation Engagement Programme, the focus will increasingly shift towards education, digital adoption and helping shareholders understand what the forthcoming market changes mean for them. Preparation today will help make the eventual transition smoother, more efficient and less disruptive for everyone involved.

For issuers that have not yet participated, the results seen so far provide a clear indication of the value that can be delivered well before regulatory deadlines arrive. Cleaner data, improved shareholder engagement, increased digital readiness and better visibility of register health are benefits available today, while also laying the foundations for tomorrow's dematerialised shareholding landscape.

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