EQ Monthly Bulletin - January 2026

In This Edition:

• Shaping the Future of AIM – London Stock Exchange feedback statement
• Institutional Shareholder Services (ISS) – 2026 Proxy Voting Guidelines
• FRC – First reporting insights of the Wates Corporate Governance Principles for Large Private Companies
• Property Digital Assets (etc) Act 2025 – Corporate Aspects
• Glass Lewis 2026 Benchmark Policy Guidelines
• FCA – Consultation Paper CP25/35
• Finance Bill 2026 – Corporate Aspects
• GC100 – Guide for Virtual Shareholder Meetings
• Pre-Emption Group – Annual Report
• Pensions UK – 2026 Stewardship and Voting Guidelines
• Employment Rights Act 2025 – Corporate Aspects
• Department for Business and Trade – Companies (Directors’ Report) (Payment Reporting) Regulations - Guidance

Shaping the Future of AIM – London Stock Exchange feedback statement

On 21 November 2025, the London Stock Exchange (LSE) published its feedback statement following its April 2025 Discussion Paper – Shaping the Future of AIM.  The consultation received over 60 formal responses and broad engagement from investors, companies, advisers, and trade bodies.

Key themes:

Strong support for AIM: emphasising AIM’s unique role as a growth market

• Need for repositioning: AIM must clearly differentiate itself from the Main Market and reaffirm its purpose as a venue for entrepreneurial founder-led and high-growth companies
• Regulatory flexibility: AIM’s non-prescriptive regulatory framework is seen as a strength, enabling adaption to emerging sectors and technologies

Strategic priorities and actions:

1. Access to capital
   
   • Unlocking capital flows is critical to success
   • Engagement with government on Mansion House objectives, pension fund allocations, and British Business Bank involvement
   • Advocacy for tax incentives and certainty around Business Property Relief to sustain investor confidence
2. Regulatory and policy engagement
   • Collaboration with government and regulators to address structural challenges
   • Push for proportionate audit and sustainability reporting
3. Rule changes
   • Acceptance of dual class share structures to attract founder-led businesses
   • Flexibility on director remuneration and related party transaction rules
   • Streamlined approach to M&A transactions, reducing friction for acquisitions
4. Future direction
   • Digital transformation of AIM admission documents to simplify and reduce costs
   • Enhancing AIM’s marketing and digital presence to reinforce its unique positioning
   • Exploring innovations in secondary market trading

Next steps:

• Implementation of derogations and guide changes
• Consultation on AIM Rule revisions and technical guidance for nominated advisers in early 2026
• Development of digital tools and streamlined processes for admissions and trading

The full feedback statement is available here: Discussion Paper - Feedback Statement - Shaping the Future of AIM

Read an update in our article - Championing AIM: An Update On How EQ Is Supporting Growth Companies In 2026

Institutional Shareholder Services (ISS) – 2026 Proxy Voting Guidelines

On 25 November 2025, Institutional Shareholder Services (ISS) published its updated proxy voting guidelines for 2026. Amendments include:

1. Voting disclosure and shareholder dissent
   
   • Companies must disclose AGM voting outcomes promptly, including detailed vote counts and percentages
   • Under the 2024 UK Corporate Governance Code, boards must explain actions taken when 20% or more votes oppose a resolution, with updates within six months and a final summary in the annual report
2. Virtual meetings
   
   • ISS will support hybrid meeting proposals but generally oppose virtual-only AGMs, citing concerns over reduced shareholder engagement
   • New language clarifies that physical meetings should allow direct interaction with directors
3. Relationship agreements with controlling shareholders
   
   • Reflects UK Listing Rule changes in 2024, companies are no longer required to have a legally binding relationship agreement with controlling shareholders, but must disclose how independence is maintained
4. Remuneration policies
   
   • Updated wording on change of control to reflect the Investment Association’s removal of this section; ISS continues to oppose automatic waivers and one-off payments
5. Related party transactions
   
   • UK Listing Rules (2024) significantly reduce the scope of transactions requiring shareholder approval.  ISS will still apply case-by-case analysis where votes occur
6. Minor updates
   
   • Incorporating changes from the 2024 UK Corporate Governance Code and the 2023 QCA Code for AIM companies, including advisory votes on remuneration for AIM-listed companies and updated guidance on board tenure and governance disclosures

The Guidelines can be accessed here: 2026-EMEA-Policy-Updates-Final Version

We’re pleased to share more information in our article - EQ Proxy: ISS And Glass Lewis Policy Updates For 2026 - Equiniti

FRC – First reporting insights of the Wates Corporate Governance Principles for Large Private Companies

On 3 December 2025, the FRC published its first reporting insights of the Wates Corporate Governance Principles for Large Private Companies since these principles were brought under the oversight responsibility of the FRC earlier in 2025.

The Wates Principles remain a viable governance framework for large private companies, especially those preparing for IPOs or seeking stronger governance, although reporting quality can vary significantly, with some still generic and lacking detail.

The report highlighted the following areas for improvement:

• Company purpose and how it aligns with the company’s values, strategy and culture.
• Board composition, which is often boilerplate and lacks sufficient detail.
• Remuneration, specifically reporting on executive pay.

The report further notes that various sections of a company’s annual report can be prepared by a variety of teams, this can lead to a fragmented approach to reporting.  Companies are encouraged to consider the annual report as a cohesive, integrated document.

The report is available here: The Wates Principles for Large Private Companies Reporting Insights

Property Digital Assets (etc) Act 2025 – Corporate Aspects

On 2 December 2025, the Property Digital Assets (etc) Bill received Royal Assent and came into force as the Property (Digital Assets etc) Act 2025.

The impact of the Act on companies is in terms of legal certainty and operational flexibility, including:

1. Legal recognition of digital assets
   
   • Companies can now treat certain digital assets (e.g. crypto-tokens, non-fungible tokens) as personal property, even though they do not fit into traditional categories of “things in possession” or “things in action”
   • This means businesses can officially own, transfer, and enforce rights over digital assets under English law
2. Enhanced commercial use
   
   1. Digital assets can be used as collateral for loans, included in insolvency proceedings, and inherited, creating new financing and risk management opportunities
   2. Companies operating in fintech, blockchain, and digital asset markets gain a clear legal framework for structuring transactions and custody arrangements
3. Reduce litigation risk
   
   1. The Act removes ambiguity about whether digital assets qualify as property, reducing legal costs and uncertainty in disputes

Full text of the Act is available here: Property (Digital Assets etc) Act

Glass Lewis 2026 Benchmark Policy Guidelines

On 4 December 2025, Glass Lewis published its 2026 benchmark policy guidelines which includes the following updates from the 2025 guidelines:

• Glass Lewis will now recommend voting against (rather than abstaining) the re-election of the audit and / or remuneration committee chair if either committee is below the minimum size required
• Following the FTSE Women Leaders review, Glass Lewis will recommend voting against the nomination committee chair where the board does not meet at least 40% gender diversity, unless mitigating circumstances exist
• Updated to align with the 2023 QCA Code of Governance for AIM-listed companies – AIM boards should be at least 50% independent and include a minimum of two independent non-executive directors.  If this threshold is not met, Glass Lewis will recommend voting against one or more non-independent directors
• Introduction of a new pay-for-performance scorecard which includes defined score ranges (severe, high, medium, low, negligible concern)
• Clarification that remuneration recommendations remain based on a holistic assessment, not solely the model outcome
• Audit, remuneration, and nomination committees are considered “key” for attendance purposes
• Reinforced expectation of five-year combined vesting and holding periods for long-term incentives, with a minimum three-year performance / vesting period, in line with the UK Corporate Governance Code 2024 and IA principles.

The 2026 Benchmark Policy Guidelines can be viewed here: Benchmark Policy Guidelines 2026 - United Kingdom.pdf

We’re pleased to share more information in our article - EQ Proxy: ISS And Glass Lewis Policy Updates For 2026 - Equiniti

FCA – Consultation Paper CP25/35

On 5 December 2025, the FCA published a consultation paper, CP25/35, on further changes to the listing for new securities, the UK Listing Rules (UKLR) and the Public Offers and Admissions to Trading Regime.

The consultation includes the following proposals:

• Lowering the administrative fee for overdue regulatory returns from £250 to £100, reflecting improved compliance and reduced processing costs
• Streamlining the UKLR by removing redundant document submission requirements, eliminating prospectus-related confirmations from listing applications, and consolidating and simplifying rules for new securities listing
• Technical corrects and clarifications regarding the Public Offers and Admissions to Trading Regime 

The consultation closes on 19 January 2026.

CP25/35 is available here: CP25/35: Quarterly consultation paper No. 50 | FCA

Finance Bill 2026 – Corporate Aspects

Following the Budget in November 2025, the Finance Bill 2026 was published.

The Bill introduced a new Stamp Duty Reserve Tax (SDRT) relief for transfers of chargeable securities in newly listed companies, effective for agreements made on or after 27 November 2025.

The relief applies for three years from the company’s admission to the official list, covering all chargeable securities issued by the company. It excludes cases involving mergers, changes of control, or insertion of a new holding company linked to listed entities and ends if control changes during the relief period.

See the Finance Act 1986, new section 89C – pages 216-217: Finance Bill 2026

GC100 – Guide for Virtual Shareholder Meetings

On 8 December 2025, GC100 published its guidance for virtual shareholder meetings.

The Guidance supports the UK government’s digitisation agenda and provides best practice for listed companies holding virtual shareholder meetings, particularly AGMs.  It emphasises that virtual formats must not restrict shareholder rights, and companies should ensure transparency, engagement, and accessibility.

Key provisions:

• Maintaining an up-to-date dedicated website or platform with meeting details
• Clear instructions in the notice of meeting, enabling shareholders to see and hear directors, submit questions via multiple channels (voice, chat, Q&A), and view responses
• Ensure the chair explains how questions will be handled, including grouping and mediation

Companies should disclose their approach to engagement and consider time-limited authority (e.g. five years) when seeking shareholder approval to amend the Articles of Association for virtual meetings.

The Guidance is available to subscribers of Thomson Reuters Practical Law: GC100 Guidance for Virtual Meetings of Shareholders

Pre-Emption Group – Annual Report

On 9 December 2025, the Pre-Emption Group (PEG) published its third annual report on the use of its principles for disapplying shareholder pre-emption rights, examining the implementation of the principles by FTSE 350 companies holding AGMs between 1 August 2024 and 31 July 2025.

The report highlights the following:

Strong uptake of principles:

• 77.6% of FTSE 350 companies sought enhanced disapplication authority, up from 67.1% in 2024/25
• 92% of companies tabled resolutions to disapply pre-emption rights, 97% sought authority to allot shares

Voting outcomes:

• 99.1% of disapplication resolutions passed

Enhance authority trends:

• 260 companies requested enhance authority

Best practice observations:

• Majority of companies adhered to PEG templates and disclosed rationale for deviations
• Decline in outdated practices

Shareholder dissent:

• Minority opposition persists, particularly for higher disapplication limits
• Votes against were generally low, but enhanced authority requests attracted slightly higher dissent

The report can be accessed here: Pre-Emption Group - Annual Monitoring Report

Council of the European Union –  Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD)

On 9 December 2025, the Council of the European Union and the European Parliament reached a provisional agreement to simplify sustainability reporting and due diligence requirements under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).  

Key changes are as follows.

CSRD:

• Employee threshold raised to 1,000 employees
• Added turnover threshold to €450 million
• Listed SMEs removed from scope
• Financial holding undertakings exempted
• Transition exemption for “first wave” companies for 2025/26
• Review clause for future scope extension

CSDDD:

• Scope threshold increased to 5,000 employees and €1.5 billion turnover
• Focus on high-risk areas in value chains
• Comprehensive mapping replaced by general scoping
• Climate transition plan obligation removed
• Civil liability harmonisation removed
• Transposition deadline postponed to July 2028, compliance by July 2029

The Council of the European Union press release can be found here: Council and Parliament strike a deal to simplify sustainability reporting and due diligence requirements and boost EU competitiveness - Consilium

The Directive was formally adopted by the European Parliament on 16 December 2025.

Pensions UK – 2026 Stewardship and Voting Guidelines

On 11 December 2025, Pensions UK (formerly the Pensions and Lifetime Savers Association PLSA) published its 2026 Stewardship and Voting Guidelines.

These guidelines have the same broad structure as prior years but include enhanced narrative, updated voting recommendations and a new section on key emerging themes.

Key changes in the 2026 Guidelines:

• AI and cyber security – strengthened narrative on what good company behaviour looks like and strengthened voting recommendations
• Governance – A change in narrative to reflect that while governance scrutiny is rising, shareholders do have less ability to influence
• Climate and sustainability – the narrative has been revised to consider policy developments throughout 2025 as well as global political backlash against ESG
• Social factors and workforce – this section has been refreshed to reflect the increasing prominence of social issues, from workforce wellbeing to pay structures to supply-chain labour practices
• Equality, diversity and inclusion (EDI) – guidelines reflect Pension UK’s commitment to EDI as a driver of stronger outcomes
• Emerging trends – a new section highlights the most significant developments from the 2025 voting season, including declining support for Say-on-Climate votes, creeping dissent on governance flashpoints, and the expanding risk focus on AI and cyber security
• Pass-through voting – the guidelines introduce pass-through voting as one option for schemes seeking to exercise shareholder rights directly

The Guidelines can be accessed here: Stewardship-and-Voting-Guidelines-2026.pdf

Employment Rights Act 2025 – Corporate Aspects

On 18 December 2025, the Employment Rights Bill received Royal Assent, and the Employment Rights Act 2025 was published.

The Act impacts on corporate reporting as section 33 inserts a new section 78A into the Equality Act 2010, setting out that future regulations will require employers with at least 250 employees to develop and publish equality action plans.

The new section also states that:

• Future regulations may make provisions about the content, form and manner of the equality action plan, how frequently it is published, requirements for senior approval and a description of the employers and employee information
• After publication of the equality action plan, the company will not be required to publish information more frequently than every 12 months
• The regulations may also set out how a failure to comply will be enforced
  The government anticipates bringing these provisions into force in the Equality Act in 2027.

Full text of the Employment Rights Act: Employment Rights Act

Department for Business and Trade – Companies (Directors’ Report) (Payment Reporting) Regulations - Guidance

On 30 December 2025, the Department for Business and Trade (DBT) published guidance on reporting on payment data in directors’ reports, following the Companies (Directors’ Report) (Payment Reporting) Regulations 2025 that came into force on 1 January 2026, for reporting years beginning on or after 1 January 2026.

The guidance closely reflects the requirements set out in the legislation and includes worked examples for illustrative purposes, as well as more information on how to deal with such issues as use of supply chain finance and payments for which no invoice is issued.

The guidance is available here: Guidance to reporting on payment data in directors' reports - GOV.UK

Department for Business and Trade – PSC Regime Guidance

On 5 January 2026, the Department for Business and Trade published and laid before Parliament draft updates to its statutory guidance for both companies and LLPs on the meaning of “significant influence or control” under the PSC regime.

The two sets of draft updated guidance make changes to reflect the abolition of the requirement for companies and LLPs to maintain a local PSC register, as well as minor changes to clarify language used in the existing versions of the guidance.

Parliament has 40 days beginning with the day the draft is laid before it to resolve not to approve either set of guidance. If no such resolution is made within those 40 days in respect of a set of guidance, the Secretary of State must issue and publish that guidance in the form of the draft.

Draft Statutory Guidance on the Meaning of “Significant Influence or Control” over Limited Liability Partnerships in the Context of the Register of People with Significant Control can be found here: Draft Statutory Guidance on the Meaning of “Significant Influence or Control” over Limited Liability Partnerships in the Context of the Register of People with Significant Control

Draft statutory guidance on the Meaning of “Significant Influence or Control” over Companies in the Context of the Register of People with Significant Control can be found here: Draft statutory guidance on the Meaning of “Significant Influence or Control” over Companies in the Context of the Register of People with Significant Control