PLC QTRLY - Q2 2026

This is our regular quarterly update to help our listed company clients and other market participants keep up to date with key developments relevant to issuers on the Main Market and AIM market of the London Stock Exchange.

FCA regulatory initiatives grid: key developments

The Financial Conduct Authority (FCA) published its Regulatory Initiatives Grid in May 2026, setting out the expected timeframes for a number of regulatory initiatives relevant to listed companies. These include:

• Changes to the Disclosure and Transparency Rules (DTRs): The FCA is reviewing the DTRs to consider their value for issuers and investors and whether changes are needed to make UK public markets more attractive while maintaining high standards and market integrity. This will be the next milestone of a major programme of reform to UK public markets, following significant reforms to the UK Listing Rules in 2024 and new prospectus rules which came into force in January. The FCA plans to publish a public consultation document in Q3 2026.
• Dematerialisation of shares: The Dematerialisation Market Action Taskforce will report by Summer 2026 with a recommended go-live date for Step 1 of its three-step process (the replacement of paper-based certificated share registers by digitised share registers), which should be before the end of 2027, and an implementation plan for the actions industry participants need to take to deliver this.
• UK Listing Rules investment entities review: The FCA is reviewing how the UK Listing Rules apply to specific types of investment entities, including whether eligibility criteria relating to risk-spreading are unduly restrictive and how the rules, in the context of company law, ensure that boards support strong shareholder rights and engagement and manage conflicts of interests. The FCA plans to set out its proposals in a consultation paper and to complete the work by the end of Q4 2026.
• Sustainable finance: The FCA aims to publish a policy statement on its consultation on requirements for UK listed companies to report against the UK SRS (see PLC QTRLY Q1 2026) in Autumn 2026.

FCA consults on changes to its penalty and decision-making policies

The FCA is consulting on changes to its Decision Procedure and Penalties Manual to keep its policy current and consistent with how it works in practice. Proposed changes include:

• Market abuse: for the most serious cases, raising the minimum penalty for individuals from £100,000 to £150,000 to account for inflation.
• Deterrence for wealthier individuals: making clear the FCA may increase penalties for deterrent effect, having regard to income and assets.
• Relevant income for individuals: clarifying how the FCA treats deferred bonuses, pay and shares, in line with recent Tribunal decisions.

The consultation remains open until 10 August 2026.

FCA Primary Market Bulletins

Primary Market Bulletin 62

On 8 April 2026, the FCA published Primary Market Bulletin 62, which covers key aspects of the FCA's misleading statements case against Carillion plc (as reported in PLC QTRLY Q1 2026).

The FCA notes that:

• Carillion plc's announcements made misleadingly positive statements about its financial performance generally and about its UK construction business, Carillion Construction Services (CCS), in particular. They did not reflect significant deteriorations in the expected financial performance of CCS and the increasing financial risks as a result.    
• Carillion plc’s procedures, systems and controls were not sufficient to ensure that contract accounting judgements made within CCS were appropriately made, recorded and reported internally to the Board and the Audit Committee.
• The FCA found that the former CEO and finance directors of Carillion plc had acted recklessly and been knowingly concerned in Carillion plc’s contraventions. They were each aware of the deteriorating expected financial performance within CCS and the increasing financial risks as a result. They failed to ensure that the Carillion plc announcements, for which they were responsible, accurately and fully reflected these matters. They failed to make the Board and the Audit Committee aware of the increasing risk, resulting in a lack of proper oversight.    

The outcome of the case underlines the high standard of disclosures expected of listed companies and the need to maintain adequate procedures, systems and controls.  It also highlights the FCA's willingness to hold executives to account for breaches by issuers, underscored by the 2024 UK Corporate Governance Code’s introduction of board accountability for effective internal controls at listed companies. 

Primary Market Bulletin 62 also covers:

• The FCA's concerns that UK micro-cap or small-cap issuers are being targeted directly as part of potentially manipulative schemes to affect those issuers’ share prices, including fake investor takeover approaches (share price manipulation) and equity fundraising linked to pump-and-dump schemes. The FCA reminds listed companies that it is vital to carry out appropriate due diligence on any approach before engaging further.
• The FCA's review of sponsor work on modified transfers to the equity shares (commercial companies) category.
• The FCA's consultation on proposed clarificatory amendments to the Prospectus Rules: Admission to Trading on a Regulated Market sourcebook (PRM).

Primary Market Bulletin 63

Working capital statements

On 27 April 2026, the FCA published Primary Market Bulletin 63, which sets out proposed changes to the guidelines on working capital statement disclosures in prospectuses to allow issuers to take into account financing under uncommitted facilities in their working capital calculations in certain circumstances. The proposed changes are intended to provide flexibility so that a clean working capital statement may be given where a judgement can be made that it is appropriate to rely on uncommitted facilities, subject to appropriate disclosure being made. This will allow issuers to avoid the costs of obtaining committed financing solely to be able to give a clean working capital statement.

UK Listing Rules and PRM amendments

Primary Market Bulletin 63 also summarises various minor amendments made to the UK Listing Rules and PRM since September 2025, states that further minor amendments may be required as the regimes continue to be used in practice and encourages market participants and advisers to tell the FCA about potential 'snagging' issues relating to the UK Listing Rules or PRM by the end of August 2026. The FCA intends to consult in Q4 2026 to address any additional issues.

FCA consults on changes to information flows for equity IPOs

The FCA recently consulted on proposed changes to the rules on information sharing during equity IPOs.

The FCA introduced rules in 2018 to encourage the production of unconnected pre-deal investment research during the IPO process, including the addition of a seven-day delay for connected research. Market feedback suggests that these rules have not always achieved their intended effect and have instead added unnecessary market risk and costs for issuers listing in the UK.

In light of this feedback, the FCA proposes to:

• Remove the seven-day waiting period between the publication of an approved registration document or prospectus and connected research (which in practice extends the IPO timeline by at least seven days); and
• Remove the requirement for syndicate banks intending to publish connected IPO research to share the same information with unconnected analysts as they do with their own connected research analysts.

The consultation also includes discussion questions on other aspects of the 2018 IPO information flows rules, including the requirement to publish an approved registration document or prospectus before connected research and the rules on the involvement of analysts in pre-mandate communications, to help explore where there are further opportunities for reform of these rules.

The FCA will publish feedback on responses to the consultation and issue a policy statement once it has reviewed the comments.

FCA publishes amendments to the UK Listing Rules

On 24 April 2026, the FCA published Handbook Notice 140, setting out a number of amendments to the UK Listing Rules which took effect that day including:

• The listing application process has been streamlined so that further issuances of securities already listed in the FCA's Official List will become automatically listed on issue, without the issuer needing to submit a further listing application to the FCA. However, the issuer will still need to apply to the London Stock Exchange for those securities to be admitted to trading in accordance with its Admission and Disclosure Standards.
• The requirement for listed issuers to notify the market as soon as possible of the results of any new issue of securities or any public offer of existing securities has been removed, leaving only the new requirement for issuers to notify admissions to trading within 60 days of securities being allotted.

FCA publishes findings on market soundings in UK equity capital markets

The FCA has published the findings of its review of the impact of market soundings on market quality in equity capital market transactions in UK listed shares. The review analysed data from 5 banks acting as bookrunner on equity transactions over £50 million between January 2023 and June 2025 and focused on 50 accelerated bookbuilds with a collective value of £32 billion.

The FCA found that trading volumes fell by an average of 13% during the market sounding period but did not observe material impacts on other market quality metrics, such as effective and quoted spread and market depth.

On average, 33 investors were sounded per transaction, with the maximum sounded on a transaction in the sample being nearly 90. However, the accelerated bookbuilds that achieved high coverage from a sounding after approaching an above average number of market sounding recipients did not meaningfully grow in overall demand or oversubscription after launch.

While the FCA does not prescribe the number of market sounding recipients that can be market sounded, it reminds firms that the risk of inside information leaking may increase as the scale of a market sounding grows and states that firms may wish to consider whether their policies and procedures appropriately consider the scale of their market soundings.

London Stock Exchange consults on changes to the AIM Rules

The London Stock Exchange has published AIM Notice 62 to consult on proposed changes to the AIM Rules following its April 2025 discussion paper on the future of AIM (see PLC QTRLY Q2 2025). The proposed changes are designed to differentiate AIM from the Main Market, to reduce unnecessary regulatory burdens on admission, to support AIM companies undertaking transactions and fundraisings, to tailor the approach for founder-led, innovative and growing companies and to attract international companies.

The key proposed changes include:

• Simplifying and streamlining the requirements for admission documents, including replacing the working capital statement with lighter disclosure obligations, allowing issuers to publish financials using UK GAAP instead of IFRS, and permitting incorporation of information by reference.
• Allowing AIM companies to seek a "capital access window" during fundraising for their securities to be temporarily suspended from trading to better manage the fundraising process and reduce market volatility.
• Changing the criteria for reverse takeovers to include a fundamental change in the AIM company's business, board and/or voting control (in addition to exceeding 100% in the class tests).
• Allowing nomads to request dispensation of suspension from trading when a reverse takeover is announced where appropriate alternative disclosure is feasible.
• Changing the application of class tests, including increasing the class test thresholds for substantial transactions from 10% to 25%.
• Removing the requirement for nomads to provide a "fair and reasonable opinion" on non-standard director remuneration where satisfied that appropriate commercial protections are in place.
• Allowing admission of companies with dual class share structures.
• Replacing "comply or explain" reporting against a recognised corporate governance code with lighter disclosure requirements.
• Replacing the existing AIM Designated Market route with a new Express Market route to enable companies listed in a wider range of jurisdictions to seek expedited admission to AIM.

The London Stock Exchange also published AIM Notice 63, which includes proposed changes to the AIM Rules for Nominated Advisers and a new Technical Note for Nomads setting out expectations on nomads in performing their obligations.

If you would like to discuss any of these issues or any other public company matters, please contact: Connor Cahalane, James Channo or Karen Hendy.