On 10 July 2023, among the Mansion House Reforms (see FC Feature 11 July 2023), the Digitisation Taskforce published Interim Report: Digitisation Taskforce setting out a number of potential recommendations for the government and seeking feedback across a number of key questions, ahead of the publication of a report setting out final recommendations.
On 20 July 2022, the government published Digitisation Taskforce: Terms of reference following the Chancellor's announcement in his 2022 Mansion House speech (see FC Feature 20 July 2022) that the government accepted in full the recommendations of the UK Secondary Capital Raising Review (see FC Feature 19 July 2022). These included the establishment of a taskforce to modernise the UK shareholding ownership framework through digitisation of the securities settlement infrastructure for capital markets. The Chancellor had asked the Taskforce to provide a public report on its progress by Spring 2023 (see FC Feature 21 July 2022).
The potential recommendations in the interim report include those set out below.
- Legislation should be introduced, and company articles of association changed, as soon as possible to stop the issuance of new paper share certificates.
- The government should introduce legislation to require dematerialisation of all share certificates at a future date, to be determined as soon as possible.
- The government should consult with stakeholders on the preferred approach to 'residual' paper share interests and whether a time limit should be imposed for the identification of untraced ultimate beneficial owners.
- Intermediaries should be required, as a condition of participation in the clearing and settlement system, to put in place common technology that enables them to respond to untraced ultimate beneficial owners requests from issuers within a very short timeframe.
- Intermediaries offering shareholder services should be fully transparent about whether clients can access their rights as shareholders, as well as any charges for that service.
- Where intermediaries offer access to shareholder rights, the service should facilitate the ability to vote, with confirmation that the vote has been recorded.
- Following digitisation of certificated shareholdings the industry should move, with legislative support, to discontinue cheque payments.
Feedback on the interim report should be received by 25 September 2023.
The Chancellor has welcomed the interim report (HM Treasury Press Release).
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