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14 Oct 2026
Insight
UK
The last 12 months have seen a number of significant legislative and regulatory changes affecting corporate governance with the continued implementation of the Economic Crime and Corporate Transparency Act 2023 (ECCTA) and a radical restructuring of the UK prospectus regime. Alongside these, a number of broader corporate governance policy and regulatory issues continue to be debated, from how best to reform, simplify and digitise corporate reporting to the ongoing uncertainty relating to the legality of virtual-only shareholder meetings and what remains of the longstanding audit reform programme. Together, these developments point to a period of transition in which companies operating in the UK must adapt both to implemented reforms and a pipeline of further initiatives, against a backdrop of a new Government with new and shifting priorities from its predecessor.
Together, these developments point to a period of transition in which companies must adapt both to implemented reforms and a pipeline of further initiatives."
Gareth Sykes
Partner
ECCTA roll‑out: Identity verification arrives, registers fall away — and more is still to come
The phased implementation of the ECCTA continues to be one of the most significant governance developments for UK companies since it received Royal Assent in October 2023. The first wave of mandatory identity verification (IDV) provisions came into force on 18 November 2025, triggering the start of a year-long transition period during which existing directors and persons with significant control (PSCs) need to verify their identity.
As well as the start of mandatory IDV, from 18 November 2025 companies are no longer required to maintain certain local (statutory) registers, though the obligation to notify Companies House of any changes which would previously have been recorded on these registers remains. This illustrates the broader shift towards reducing the regulatory burden on companies.
There is more IDV on the horizon, though the provisions extending these obligations to those filing documents at Companies House have been delayed by a year and are now expected to come into force no earlier than November 2027. The implementation dates for extension of the mandatory IDV regime to corporate directors, corporate LLP members, and officers of corporate PSCs remain unclear.
Further changes introduced by the ECCTA that are also yet to come into force include changes to account filing procedures (expected from April 2028), and measures to improve transparency relating to limited partnerships and to prohibit corporate directors (timings for which are unknown).
Virtual shareholder meetings: Guidance is here, but legislative certainty is not (yet)
Virtual and hybrid shareholder meeting formats remain a live governance topic. The legal backdrop is still not fully settled, and shareholder expectations and voting guidelines continue to evolve.
Hybrid meetings (where a physical place for attendees to meet is combined with a platform for electronic participation) are compliant with English law provided that the company’s articles do not prohibit remote participation and shareholders can properly participate and vote. Fully virtual‑only meetings however remain more legally sensitive. This is because section 311 of the Companies Act 2006 (CA 2006) refers to the “place” of the meeting, which has historically been interpreted to mean a physical place, creating uncertainty in a modern context about whether a virtual place could satisfy the statutory requirements.
In December 2025 the GC100 published guidance aimed at companies considering virtual‑only meetings, emphasising the steps which should be taken before moving to a virtual-only meeting format, including shareholder engagement and suggested standards. This is an important market signal: even before any legislative change, investors are likely to expect that any move towards virtual‑only formats is accompanied by strong safeguards and a clear rationale (see for example the guidance published by the Investment Association in October 2026). The Government has indicated an intention to amend the CA 2006 to clarify that virtual‑only meetings are permitted and included this proposal within its review of corporate reporting (see Modernising corporate reporting below). However, with the consultation only recently launched, the timing and final form remain uncertain.
Given the uncertainty, a cautious approach remains sensible for many issuers: to wait until the Government’s proposals are clear before making any decisions about the future format or meetings or how to take advantage of them.
Audit reform: No new bill, but targeted changes remain
In one of the most notable governance-related announcements early this year, the Department for Business and Trade (now renamed as the Department for Business, Innovation, Science and Trade, or BIST) confirmed that it would not be moving forward with its previously outlined plans to reform audit, corporate governance and reporting legislation, citing a desire to avoid imposing significant new costs, to reduce administrative burdens, and to promote economic growth.
This means that the long-trailed legislative reform, including the creation of a new statutory regulator with a broad remit, is no longer imminent. However, the Government has indicated that it still intends to pursue steps to put the Financial Reporting Council (FRC) on a statutory footing when parliamentary time allows. No further details have yet been provided, but this would likely include giving the FRC improved revenue-raising powers.
More broadly in relation to corporate reporting, the Government has launched a review of the current framework, aiming to modernise and simplify it, reducing the burden for reporting entities (see Modernising corporate reporting below).
The new prospectus regime: A more flexible secondary issuance framework for listed companies
The most consequential capital markets development for listed issuers over the last year has been the implementation of the reformed UK prospectus regime through the Public Offers and Admissions to Trading Regulations 2024, supported by the detailed rules in the new Admission to Trading on a Regulated Market (PRM) sourcebook in the Financial Conduct Authority (FCA) Handbook.
The new regime took effect from 19 January 2026. The most significant change for listed companies is the increase in the threshold for triggering a prospectus for further issuances on a regulated market from 20% to 75% of existing share capital. For existing issuers, this has the potential to enable significantly larger follow‑on fundraisings without an FCA-approved prospectus.
The reforms are intended to streamline admissions and fundraising processes for already‑listed classes of shares. One notable knock-on effect for existing issuers is the removal of the block listing regime from the FCA’s Handbook. Block listings are no longer required on the basis that new issuances of shares that belong to a class of shares which has already been admitted to listing, are now automatically admitted to listing. Under the new regime, issuers only need to allot the shares and within 60 days of allotment apply to the operator of the relevant market for admission to trading (eg, the London Stock Exchange for admission to the Main Market) and comply with its requirements. There is then a requirement under the PRM to publish an announcement setting out certain prescribed information within 60 days of admission to trading. While the proper interpretation and application of these rules to further share issuances (for example, in connection with share schemes) generated considerable debate amongst governance professionals, that debate has now been settled following further changes to the FCA Handbook in May 2026 (see our blog post for more details).
FCA changes to share buyback notifications: Seven market sessions, not next‑day
Share buybacks remain a common capital management tool for UK listed companies, and the FCA has made a practical change designed to reduce friction in execution. From 27 February 2026, the FCA amended the UK Listing Rules (UKLR) requirements for notifying purchases of own shares following a buyback. Under the revised rule, notifications must be made no later than the end of the seventh daily market session following the purchase (replacing the prior “as soon as possible/next business day by 7.30am” backstop). The FCA’s stated rationale was to align the UKLR notification timetable with the UK Market Abuse Regulation buyback safe harbour timetable and reduce overlap. In practice, this gives issuers more flexibility to batch disclosures and eases operational pressure on teams managing programmes, while still preserving the detailed information content required in notifications.
Corporate reporting continues to evolve through a mixture of targeted regulatory amendments and wider “modernisation” drives."
Caroline Hagg
Senior Associate
Corporate reporting: New disclosures confirmed against backdrop of proposals to modernise
Corporate reporting continues to evolve through a mixture of targeted regulatory amendments and wider “modernisation” drives. There are a number of areas to keep on the radar.
For more details on these areas, please expand the menu below.
Digitisation of shareholding: Staged removal of paper certificates and a roadmap to intermediated holding
Finally, the implementation of the plans to move to fully digitised share ownership has commenced with the publication of the report by the Dematerialisation Market Action Taskforce (DEMAT) on the measures to effect step one of the three-stage process to transition away from paper share certificates. The staged approach set out in the final recommendations of the Digitisation Taskforce involves:
- replacing paper share registers with digitised versions while maintaining current service levels for certificated shareholders;
- improving the intermediated system; and
- transitioning all shares into an intermediated model once criteria are met.
For further details, see our article After the dinosaurs and the dodo, share certificates are about to become extinct: What dematerialisation means in practice.
A common thread across these developments is the need for operational readiness during a period of transition. This period of transition has been exacerbated by the change in leadership in the Government in July this year, with uncertainty remaining at present in relation to the priorities and goals for the new Burnham Government.
Notwithstanding this, identity verification obligations, changes to the timing for buyback disclosures and new reporting obligations all require governance functions to refine processes and documentation now. Meanwhile, virtual meetings reform and reporting modernisation may create new options, but for many companies the best approach for the time being is to monitor, engage and prepare rather than rushing to constitutional change.
Chapters
- Governance Insights 2026: Navigating a path through change
- Governance reforms in 2026: Same same but different?
- Is everything under control? Complying with Provision 29 in practice
- Information overload: How much disclosure do investors and creditors really want?
- Great(er) Expectations: Who would be a non-executive director of a UK plc?
- The starting gun has fired: Where next for ISSB reporting?
- After the dinosaurs and the dodo, share certificates are about to become extinct: What dematerialisation means in practice
- Governance leadership survey: Taking the temperature on key issues of the day
Key contacts
Caroline Hagg
Senior Associate, London
Isobel Hoyle
Knowledge Counsel, London
Gareth Sykes
Partner, Head of Corporate Governance Advisory, UK, London
Hannah Whitney
Senior Associate, London
Legal Notice
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills Kramer 2026