On 26 June 2026, the Financial Conduct Authority (FCA) published Consultation Paper 26/21: Proposed changes to the UK Listing Rules for closed-ended investment funds (CP26/21).

The proposals in CP26/21 apply to a market comprising 264 closed-ended investment fund issuers, managed by 145 investment manager firms, with total assets under management of £217bn (as at May 2026). Average assets under management per fund were £863m, with a median of £325m.

Background

On 3 March 2026, the FCA announced that it was bringing forward a targeted review of the UK Listing Rules (UKLRs) for investment entities, that would, amongst other things, allow it to assess how its rules ensure boards support strong shareholder rights and manage conflicts of interests.

Consultation

Through this process, the FCA has identified certain areas where making targeted adjustments now would ensure that its rules remain robust across future scenarios. The changes the FCA is consulting on are set out further in chapter 3 of CP26/21 and are designed to address these by:

  • Bringing proposed investment managers within the scope of the UKLR 11 relevant related party provisions. The proposal seeks to ensure that there are consistent protections for all changes to investment manager fees.
  • Ensuring that the association between a director and a substantial shareholder that proposed them for a board appointment is adequately accounted for in the UKLRs in order to strengthen the integrity of a board being able to act independently of any investment manager.
  • Where a substantial shareholder is also an investment manager of the closed-ended investment fund, recognising the conflict arising by preventing the substantial shareholder from voting in material changes to the investment policy.

The FCA states that when drafting the proposals, it has carefully considered the impact any changes may have in relation to impeding legitimate shareholder activism and diluting accountability. The FCA intends any reform to be as limited as possible in protecting minority interests in niche hypothetical scenarios, without impacting broader shareholder activity.

Alongside CP26/21, the FCA is also publishing guidance on good practice to support retail investors in exercising their voting rights, as part of the regulator’s broader work to promote effective shareholder engagement.

Next steps

The deadline for comments on CP26/21 is 14 August 2026.

The FCA states in CP26/21 that its proposals, if finalised, would apply from a specified date. It anticipates the rules would come into force a short period, of about 4 weeks, after it publishes the policy statement and final rules.

As part of its 3 March 2026 announcement, the FCA stated that it was also exploring which types of investment entities should be eligible to list in the UK. Specifically, if the requirement for listed closed ended investment funds to manage their assets in a way that aligns with the objective of spreading investment risk is proportionate. The FCA states that this work is ongoing and that it will publish a timeline for taking it forward later this year.