What does 2026 have in store for UK listed companies?

Our experts review key trends shaping the future of UK listed companies in 2026.

Passives take control 

In previous editions we have discussed how active fund managers can seek to justify higher fees by engaging in some public shareholder activism, visibly demonstrating their active management of portfolios. However, the march of the passive funds has continued unabated: a recent study showed that at the end of 2025 the percentage of AUM in passive funds across the IA UK All Companies sector was five percentage points higher than that of the AUM in active management (52.5% versus 47.5%). 

A report for the FCA also concluded that in 2024, the average UK passive fund was four times larger than its active counterpart (£1,431m versus £373m of AUM). Passive funds on a shareholder register have a particular impact for ongoing shareholder engagement: low-fee passive fund operators typically cannot dedicate the same resource to stakeholder dialogue as an active fund. We have seen issuers struggle for consistent engagement with passive fund managers ahead of key votes, especially in circumstances where a passive strategy may sit under the same asset manager, but alongside different investment theses. In addition, allowing underlying holders of the shares in passive funds to actually vote remains a challenge – especially for specific corporate actions including proposed takeovers (and their defence). Boards of issuers will, of course, know the positive impact that index inclusion can have on share prices (and trading volumes) – but they must also be mindful of the impact of such a large passive holding on a share register; understanding the impact and seeking dialogue where possible remains key.

The listed funds roller coaster will continue 

2025 was quite the ride for the listed funds sector. It started out with the attack by activist shareholder Saba Capital on seven different Investment Trusts (which was soundly defeated in each case). Although broad-based media campaigns succeeded in getting shareholders to vote against the proposals, those funds that trade at a persistent discount to NAV remain very much in the crosshairs. 

In the UK REIT sector, the consolidation play continues – with REITs being active bidders in competitive situations. In particular, Tritax Big Box REIT led the bidding for Warehouse REIT in a cash-and-shares deal (ultimately losing out to Blackstone’s cash offer), and Primary Healthcare Properties PLC ultimately succeeded in their cash-and-shares offer for Assura plc. A key element of the PHP offer for Assura was convincing shareholders of the merit in having a large REIT in this asset class remaining listed on the London market and available to all investors – so cash is not always king. 

We expect to see more transactions across the listed funds sector in 2026: drivers include the ability for listed funds to issue shares as takeover consideration without a shareholder vote (or a prospectus – more below), wealth manager consolidation driving larger funds (wealth managers fear having an interest which is too large in any given listed fund), and listed boards having to proactively deal with persistent share price discounts – or face activist attack.

A year to consolidate regulatory changes 

The UK capital markets have been fundamentally reshaped, and the new prospectus regime which went live in January 2026 represents the last piece of the puzzle. Although this new regime may feel familiar (not least the exemptions to prospectus issuance including offers to fewer than 150 persons and/or to qualified investors), there is a very significant shift. 

For secondary capital raises, the threshold below which a prospectus is not required will increase from 20% of the issuer’s existing share capital to 75% – giving listed companies significant strategic flexibility in capital raising efforts. Given the various deregulatory steps that we have covered previously (see this article and this article) – in particular the removal of a shareholder vote requirement in most circumstances – it is inevitable that the pace of regulatory change for 2026 will significantly slow. We hope that the listed company community will start to make the most of this new-found flexibility in 2026.

All hail retail 

What’s not to like about Sweden? Cinnamon buns, Volvos, lake houses on the archipelago and… retail investing? Indeed, Sweden was the most successful capital markets venue in the EU in 2025 – both in terms of volume (27 IPOs), and the biggest IPO of the year (Verisure). The success has been built in part through meaningful retail participation – nearly a quarter of Swedes have direct shareholdings in listed companies, boosting liquidity and ensuring a strong local demand for listings. 

As part of its capital markets overhaul, the UK is looking to some of these Swedish techniques by continuing to encourage retail investment (including through supporting retail-focused platforms in new issuance participation). Changes to limits on ISAs to facilitate greater allocation to equities (at the expense of cash) are all designed to encourage retail investors – ultimately supporting the liquidity and pools of capital that a well-functioning capital market needs. It is often said that UK consumers drive the UK economy (consumer spending is c. 60% of UK GDP) – and it seems that the UK Government is also encouraging them to drive a stock market renaissance. Whereas listed boards have previously shied away from engagement with retail shareholders, this shift in emphasis will likely require a change in approach from listed companies and the advisory community to ensure that the demands of retail shareholders are also satisfied.

CMA merger intervention likely to be relatively subdued, as the competition authority pursues “pro-growth” agenda

2025 was a pivotal year for competition policy in the UK. Government pressure for the CMA to do more to support investment and growth prompted a marked shift in the regulator’s approach to enforcement. In particular, the CMA announced a slew of initiatives to improve the speed, transparency and predictability of its work, aiming to be a more “business-friendly” regulator. The impact of these measures and the CMA’s new mindset has already been seen clearly in the merger control sphere – the CMA is moving faster to clear deals, opening fewer in-depth investigations and showing a willingness to be more flexible when considering remedies. 

It is by no means open season for problematic mergers, but we have come a long way since the days of the CMA intervening in otherwise green-lighted global deals (Microsoft/Activision). There has been a step change in the regulator’s strategic priorities – we expect less “stick” and more “carrot” from the CMA in 2026.

Read more on the competition law outlook for 2026.

Remuneration is (and likely always will be) a hot topic 

Key remuneration and share plan developments to look out for in 2026 include a possible renewed use by listed companies of tax-qualified share plans such as Enterprise Management Incentive Plans (EMIs) and Company Share Option Plans (CSOPs), given significantly increased participation limits and eligibility thresholds. For smaller listed companies, EMI options become available again as the gross asset threshold has quadrupled from £30m to £120m.

In the drive to make the UK more attractive for international business and talent, the FRC updated its guidance on the Corporate Governance Code in 2025 to suggest that non-executive directors could be granted share awards (along the lines of US practice). While listed companies may, and some already do, pay NED fees in shares, the amended guidance goes further by opening the door for time-based nil-cost options and conditional awards as part of the NED remuneration package. The introduction of such awards for NEDs will likely require a new remuneration policy to be put to shareholders, so we expect to see issuers with remuneration policies up for renewal this year to start proposing such changes in 2026 AGM season.

Will PISCES contribute to growing positive sentiment in the capital markets? 

The UK Government and its regulators have been looking at a range of ways to stimulate the capital markets, including the PISCES framework – designed to enable a new form of market to provide intermittent secondary trading in private company shares and therefore create a more functional late-stage liquidity venue. 

The first markets operating under the PISCES framework – which are lighter on disclosure, pared-back on post-trade transparency, and enable share trading free from stamp duty – are set to be fully operational in 2026. It will be interesting to see if this has any positive impact on the capital markets; at a minimum PISCES will be a helpful addition to the late-stage funding environment, providing a new route for shareholders in private companies to access liquidity, and for employees to realise value from share schemes. A regulatory driver for PISCES was to promote the listed company environment more broadly – potentially as a step on the journey to a full IPO. 

Along with the swathes of other regulatory initiatives we have talked about (including a new three-year stamp duty holiday for shares transfers for new issuers), there are signs that public investor sentiment is improving – with 2025 also marking a potential thawing of the London new issues market (along with record highs for the FTSE 100). There are reasons for cautious optimism for UK capital markets (and in particular more IPO activity) throughout 2026.