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Welcome to the latest edition of Corporate Update.

Corporate Update is our fortnightly bulletin offering a quick read of the latest developments relevant to corporate counsel. Please get in touch with your usual contact or any of the contacts listed below if you want to explore any of the topics covered in more detail. If you would like to subscribe to this bulletin as a regular email, please click here. 

Publications

Treasury Essentials 

We have published Treasury Essentials – our bi-annual insight into topical issues of relevance to finance and treasury markets. This month, we focus on the debt capital markets, which have been very active during the first half of 2026. We kick off this edition with a closer look at the bond market backdrop in Europe, before turning to more technical matters, including a recap of the recent reforms to both the UK and EU prospectus regimes and an overview of the implications of the forthcoming reform to the Retail Prices Index for index-linked securities. 

News  

FCA consults on Listing Rules changes for closed-ended investment funds 

On 26 June 2026, the FCA published Consultation Paper CP26/21 on proposed changes to the UK Listing Rules (UKLR) for closed-ended investment funds. 

UKLR 11 already contains rules for funds on board independence, related party transactions and material changes to investment policy. However, as part of its review of the UKLRs in relation to investment entities, the FCA has identified areas where minority investors require greater protection.

The changes are principally designed to help strengthen board independence and the protections against conflicts of interest, partly in response to recent shareholder activism targeted at investment trusts (notably we have seen Saba’s well-publicised campaigns against a number of investment trusts, seeking to replace their boards and managers, and to convert some to open-ended structures).

The FCA is keen to balance the aim of protecting minority interests with the need not to deter shareholder activism - which it recognises can play an important role in encouraging companies with poor management or underperforming strategies to improve – or dilute accountability.

The key proposals include:

  • amending the definition of “associate” (for UKLR 11 purposes only) so that directors would not be able to vote on related party transactions involving the substantial shareholder who proposed their appointment;
  • bringing “proposed investment managers” within the related party transaction rules, so that protections around fees would apply consistently before and after the appointment of managers (new UKLR 11.5.3R(2)); and
  • preventing a substantial shareholder who is also an investment manager from voting on material changes to the fund’s published investment policy (new UKLR 11.4.14R).

We will be publishing a briefing on the changes shortly. The consultation closes on 14 August 2026, and the FCA aims to finalise the rules before the end of 2026.

FRC publishes guidance about Provision 29 of the UK Corporate Governance Code and refreshes audit reporting standards

On 24 June 2026, the Financial Reporting Council (FRC) published a “mythbuster” Q&A clarifying auditors’ responsibilities in relation to Provision 29 of the UK Corporate Governance Code 2024 (the Code). Provision 29 applies to financial years beginning on or after 1 January 2026 and obliges boards of companies which follow the Code to monitor and review all material controls and to include in the annual report: 

  • a description of how the board has monitored and reviewed the effectiveness of the company’s risk management and internal control framework;
  • a declaration on the effectiveness of the material controls as at the balance sheet date; and
  • a description of any material controls which have not operated effectively as at the balance sheet date, the action taken or proposed to improve them and any action taken to address previously reported issues.

The FRC’s mythbuster guidance is designed to dispel common misconceptions about the auditor's role in relation to Provision 29. The central point is that the auditor's involvement is narrower than many may expect; in particular, there is no requirement for auditors to test or offer assurance over the material controls that the board has identified, and requirements of the relevant UK auditing standards have not been expanded in response to changes to the Code. 

Instead, the Provision 29 statement is treated as “other information” for ISA (UK) 720 purposes (i.e. financial or non-financial information other than the financial statements and the auditor’s report on them). The auditor’s responsibility is limited to considering whether there is a material inconsistency between the other information and the financial statements or the auditor’s knowledge obtained in the audit. The auditor applies professional judgement to determine what procedures, if any, are needed in their consideration of the Provision 29 statement. Performance of those procedures does not represent an assurance engagement. 

The FRC has also announced new versions of International Standards of Auditing ISA (UK) 700, 701 and 720. Based on feedback to its October 2025 consultation, the FRC says auditor reports have become too long and often contain boilerplate language that adds limited value. The ISA revisions are intended to remove unnecessary reporting requirements, focus reports on information investors find useful and align UK standards more closely with international equivalents. The revised standards apply to audits of financial statements for periods beginning on or after 15 December 2026. For companies that follow the Code, the standards introduce requirements for auditors to describe how the company's system of internal controls affected the audit, and – where very serious control deficiencies are identified – to communicate them in the auditor’s report. Further guidance on these requirements is given in the FRC’s mythbuster guidance. 

FCA publishes final rules on offers to the public, and admission to trading, of cryptoassets 

On 30 June 2026, the FCA published Policy Statement (PS26/9) setting out the final rules that will apply to offers of qualifying cryptoassets to the public and the admission to trading of qualifying cryptoassets on a UK qualifying cryptoasset trading platform (QCATP). Such rules are to be known as admission and disclosures (A&D) rules and will be set out in a new chapter of the FCA Handbook, CRYPTO 3. 

Among other things, before a qualifying cryptoasset is admitted to trading, retail UK QCATPs will have to undertake due diligence and ensure that a qualifying cryptoasset disclosure document is published and uploaded to the FCA-owned centralised repository for cryptoasset disclosures. This will be subject to limited exceptions. 

The Policy Statement also describes the rules for the market abuse regime for cryptoassets (MARC). Set out in a new CRYPTO 4 chapter of the FCA Handbook, the regime will prohibit insider dealing, unlawful disclosure of inside information and market manipulation. It is based on the UK Market Abuse Regulation, but with adaptations to reflect the unique features of cryptoasset markets and the scope of the FCA’s rule-making powers under the Cryptoassets Regulations. There will be additional obligations for large UK QCATPs, including on-chain monitoring and cross-platform information sharing.

The new rules are set out in Cryptoassets (Admission of Qualifying Cryptoassets to Trading and Offers of Qualifying Cryptoassets to the Public) Instrument 2026 (FCA 2026/37) and Cryptoassets (Market Abuse) Instrument 2026 (FCA 2026/38), and will come into force on 25 October 2027.

FCA publishes guidance on how intermediaries can help investor clients to vote

On 26 June, the FCA published guidance encouraging investment platforms, stockbrokers, trading apps and other retail investment intermediaries to consider what they can do to help retail investors exercise voting rights attached to shares the intermediary holds on their behalf. 

The guidance is part of efforts by the Dematerialisation Market Action Taskforce to improve the UK’s intermediated shareholding system, and particularly to ensure that investors who do not hold legal title to their shares are able to enjoy similar rights to those who hold shares in their own name (see Corporate Update Bulletin - 23 October 2025).  

Such improvements are intended to be implemented before all shareholders in UK-incorporated listed companies become required to hold shares via an intermediary (as recommended by the Digitisation Taskforce), which is currently planned to occur by July 2029.

CLLS and Law Society respond to proposed redomiciliation regime 

On 18 June 2026, the City of London Law Society (CLLS) and the Law Society of England and Wales (the Law Society) published a joint response to the government’s consultation on a new UK corporate redomiciliation regime. If implemented, the regime would allow overseas companies to move their place of incorporation to the UK while retaining their legal identity (see our briefing here). The response is strongly supportive of the proposals on the basis that the existing routes for moving a company’s place of registration to the UK are costly and complex, and that a regime allowing companies to retain their legal identity would be simpler and more efficient. 

However, the response also urges the government to allow outward redomiciliation of UK companies, and to consider wider reforms such as a UK cross-border merger regime. While these changes would be more difficult and time-consuming to implement, it argues that such features would make the UK legal framework more attractive to companies.

The consultation closed on 19 June 2026. The government says it is committed to establishing the framework as quickly as possible and will provide further details in due course. 

Consultation on information flows receives support from CLLS and the Law Society

On 23 June 2026, CLLS and the Law Society published a joint response (dated 28 May 2026) to the FCA’s Consultation Paper CP 26/14 on proposed changes to how investment research is published during UK IPOs.

As set out in CP 26/14, the FCA’s proposals are intended to reduce risk and costs for issuers, and to boost the competitiveness of UK capital markets (see Corporate Update Bulletin - 30 April 2026). The CLLS and Law Society strongly support the proposed changes, including:

  • removing the seven-day waiting period between publication of an approved registration document or prospectus and connected research (COBS 11A.1.4FR); and
  • removing the requirement for syndicate banks to identify and share information equally with unconnected analysts before connected analysts can communicate with issuers (COBS 11A.1.4BR – COBS 11A.1.4ER).

Going further than the FCA, however, the response also argues that the requirement for an early registration document under COBS 11A.1.4FR(4) / PRM 9.5 adds cost and complexity for issuers without delivering material benefits to the IPO process and that a registration document should be optional in specific circumstances, rather than mandatory.

The consultation has now closed. The FCA will publish feedback on responses and issue a policy statement once they have reviewed responses.

Legislation 

Sustainability reporting: EC adopts new CSRD acts 

Following a public consultation in May 2026, the European Commission (EC) has adopted two delegated acts relating to the standards for sustainability reporting introduced by the Corporate Sustainability Reporting Directive 2022 ((EU) 2022/2464) (CSRD).

  • The first act revises and simplifies the European sustainability reporting standards for companies subject to mandatory CSRD reporting. The final standards broadly mirror the proposed final drafts that were published in May (see our blog post for more details), which themselves largely followed the drafts submitted by the technical group EFRAG in December 2025. Companies that fall within scope of the CSRD must adopt these revised standards for their sustainability reporting on financial years beginning on or after 1 January 2027 (but may do so sooner if they wish).
  • Meanwhile the second act sets out voluntary standards for companies outside the mandatory CSRD scope. It therefore provides a helpful framework for smaller organisations to produce sustainability reporting in a way that is proportionate to their size. It also determines the limits on what information can be requested by in-scope companies of their value chain partners with fewer than 1,000 employees.

Both acts will apply after two months’ scrutiny by the European Parliament and the Council of the EU (see Corporate Update Bulletin - 14 May 2026). Provided there are no objections, they will then be published in the Official Journal and will enter into force.

Note that non-EU companies that fall within scope of CSRD are required to report under a separate standard – known as the ESRS for Third-Country Groups (ESRS-TC). It is expected that a draft of the ESRS-TC will be published for public consultation on 23 July 2026, with a view to being formally adopted by the Commission in 2027.