Proposed changes to the UK Listing Rules for closed-ended investment companies
July 2026
The FCA has recently published a consultation proposing a number of rule changes designed to strengthen governance, manage conflicts of interest more consistently, and enhance shareholder protections across the sector.
Key proposals include:
Director independence – Directors who are not independent of a proposed investment manager would be excluded from board discussions and decisions relating to that appointment.
Directors nominated by substantial shareholders – Directors appointed following nomination by a substantial shareholder would be treated as associated with that shareholder for related party purposes, preventing them from participating in board decisions involving that shareholder.
Related party rules – Proposed investment managers would be brought within the related party regime, ensuring fee arrangements receive consistent shareholder protections both before and after appointment.
Investment policy changes – Where a substantial shareholder is also the investment manager, the FCA proposes restricting their voting rights on material changes to investment policy, while consulting on three alternative approaches to managing these conflicts.
The FCA has made clear that it recognises the important role shareholder activism plays in UK markets and does not intend these proposals to undermine shareholders’ ability to hold boards to account.
The consultation closes on 14 August 2026, with the FCA aiming to publish final rules before the end of the year. The changes are expected to come into force around four weeks later.
For investment trusts, REITs and VCTs and their company secretaries, legal advisers and boards, now is the time to review the proposals and consider how they may affect governance arrangements and shareholder approvals.
Perivan continues to support investment companies and their advisers with the production and secure distribution of shareholder communications and regulatory documentation.
We are currently market leaders in the production of annual reports for members of the Association of Investment Companies (AIC), reflecting our deep sector expertise and long-standing client relationships.