Listing regime – FCA consultation on UK Listing Rules for closed-ended investment funds

The proposed amendments would extend the rules on relevant related party transactions to proposed investment managers and tighten governance where the investment manager is a substantial shareholder or has appointed a director

The Financial Conduct Authority (FCA) has published a consultation paper (CP26/21) on the UK Listing Rules (UKLRs) for listed closed-ended investment funds in UKLR 11. It is proposing three targeted amendments to UKLR 11 which are intended to address potential conflict of interest issues identified by the FCA in the context of the UKLR related party provisions.

The three key proposals are:

• bringing proposed investment managers within the scope of the relevant related party provisions in UKLR 11;
• amending the definition of “associate” (in relation to closed-ended investment funds only) to include any director whom a substantial shareholder (or any of its associates) has proposed for appointment; and
• restricting the voting rights of an investment manager who is also a substantial shareholder on material investment policy changes.

The consultation closes on 14 August 2026 and the FCA aims to finalise the new rules by the end of the year.

The FCA has put forward its proposals against the background of an increased level of activist investment in UK investment trusts over the last couple of years. However, the FCA is careful throughout the consultation paper to emphasise that it does not wish to impede legitimate shareholder activism.

For more information on the consultation, see this e-bulletin by our Listed Investment Funds team.