The Financial Conduct Authority has launched a consultation on targeted changes to the UK Listing Rules for closed-ended investment funds, aimed at tightening the management of conflicts of interest without undermining shareholder rights or activism. The proposals focus on three areas where the FCA says its current framework should be clarified for future scenarios: appointments of new investment managers, board independence where directors have links to influential shareholders, and shareholder voting where a substantial shareholder is also the investment manager. Under the proposals, a proposed new investment manager would be brought into the related party regime for fee and remuneration arrangements so that protections apply before and after appointment on a consistent basis. Directors who are not independent of a proposed investment manager would be barred from taking part in the board's consideration of that appointment, and directors proposed by a substantial shareholder would be treated as not independent of that shareholder for related party matters involving it. The FCA also proposes excluding a substantial shareholder that is also the investment manager, and in some cases a substantial shareholder whose associate is the investment manager, from voting on material changes to the fund's published investment policy. Alongside the consultation, the FCA has published examples of good practice for investment platforms, brokers and other intermediaries to help retail investors receive clear voting information and face fewer barriers to exercising voting rights. Responses are due by 14 August 2026, and the FCA aims to finalise the rules before the end of the year. It expects any final rules to take effect after a short implementation period of about four weeks and will also consider whether related Technical Notes need updating.

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