Dematerialisation, and why it matters now

For many years, dematerialisation was a concept: widely discussed, often deferred, and easy to treat as “future‑state”. In 2025, that shifted materially. The programme now has momentum, a direction of travel, a roadmap for delivery and a target operating model - underpinned by strong political will, political commitment, and (for now) political prioritisation.

What this means for you

For issuers, this is no longer a distant market debate. It is a near‑term readiness challenge with real consequences if left too late. Dematerialisation will change how shareholders receive communications, how they receive payments, and how they evidence and manage ownership. In practical terms, the risk is not simply “paper vs digital” - it is the risk of shareholder disenfranchisement, avoidable friction in servicing shareholders, and a harder (and potentially more disruptive) transition if essential groundwork is not completed early.

To date, much of the industry communication has been formulaic: framed around hypothetical technical considerations. From our discussions with issuers, what’s been missing is a practical understanding of what dematerialisation truly means, what it implies for issuers and shareholders.

That’s why our focus is firmly on listed company clients for whom early readiness is both achievable and most impactful, prioritising practical actions that deliver improved outcomes now, regardless of the eventual end‑state detail.

In its simplest form, your register of members’ longevity can be secured by three clear foundations:

·       Digital payments

·       Digital communications

·       Digital share ownership

These enablers are not yet common practice across all registers for demographic and legacy reasons, including the perceived volume of vulnerable shareholders. But there is clear precedent in society for “digital‑first” service models.

The opportunity now is to embrace the change thoughtfully and support your shareholders through our three-step action plan below.

Step 1: Data integrity

All too often Shareholders do not ensure their data is always accurate – whether that be due to ‘life admin’ burden, prioritisation or a lack of awareness. This outdated data then creates friction, cost, and the risk of shareholder disenfranchisement as the market moves to digital.

MUFG Corporate Markets is proactively working towards a data integrity proposition with the aim to carry out data‑matches across your entire register using highly reliable external sources, resolving discrepancies through robust fraud controls. Where required, targeted forensic tracing is used to identify missing or deceased holders.

Cleaner data, improved reachability, fewer unknown shareholders, and a stronger foundation for transition significantly reduce future cost, complexity, and risk. Cleaner data also ensures protection for both the issuer and the shareholder.

Step 2: Reconnecting dormant shareholders with their assets

Dormant shareholders are most at risk of becoming disconnected as the market digitises, often with unclaimed cash and incomplete contact details.

Following Step 1, and associated detailed tracing activity, our experts can re‑engage your dormant shareholders using Reconnect+, an online solution that reconnects them with their holdings. As part of this process, we collect bank details and email addresses - delivering two of the three digitisation enablers through direct engagement.

Step 3: Onwards Engagement

Dematerialisation risks disenfranchising disengaged shareholders unless we all take deliberate engagement action across the register.

A solution developed from our already proven engagement programme, will explain dematerialisation, drive digital adoption through the promotion of Investor Centre, and offer a fair, cost‑effective exit route for those who do not wish to remain shareholders in this new dematerialised era. A number are trapped by the “exit economics” that typically exist, especially true for small shareholders, which our programme will proactively address.

This will result in more informed shareholders, greater digital uptake, and reduced transition risk. Across this dematerialisation readiness strategy, MUFG Corporate Markets is taking the lead - proactively, practically and pragmatically guiding issuers through the journey. With a broad client base, we are scaling delivery as an industry‑first, client‑wide initiative, supported by communication specialists drafting clear communications that drive action.

While the final end‑state in 2029 will continue to evolve, the duty now is clear: ensure we, our issuers, and our shareholders are as prepared as possible - and that the transition to this first step of digitised registers is delivered with confidence.

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