meta_id 3274390

On June 26, 2026, the Financial Conduct Authority (FCA) published a consultation paper proposing targeted changes to the UK Listing Rules for closed-ended investment funds, with a focus on strengthening the management of conflicts of interest and shareholder protections. Closed-ended investment funds operate as both listed companies and investment vehicles, with shareholders appointing boards that oversee appointed investment managers. The FCA's review, announced in March 2026 as part of its broader work on UK Listing Rules, stress-tested how existing rules would operate under different hypothetical scenarios to ensure they remain robust as markets evolve. Through this exercise, the FCA identified three specific adjustments to ensure consistent rule application. First, the proposals would extend protections currently applied to arrangements with existing investment managers to situations where new managers are being appointed, ensuring consistent protections for all changes to investment manager fees and strategies. Second, the rules would recognise the association between a director and a substantial shareholder that proposed them for board appointment, strengthening board independence from any investment manager. Third, the FCA would recognise conflicts arising where a substantial shareholder is also an investment manager and votes on material changes to investment policies, ensuring minority shareholder protections. Jon Relleen, director of infrastructure and exchanges – supervision, policy and competition division at the FCA, said the changes reflect the central role of the investment management relationship for these companies and represent forward-looking adjustments to conflicts of interest management. The FCA is welcoming views on these proposals until August 14, 2026, with the intention to finalise the rules before the end of 2026. Alongside this consultation, the FCA is publishing good practice guidance to support retail investors in exercising their voting rights as part of its broader work promoting effective shareholder engagement.