UK Equity Markets Update: Key Trends Shaping 2026

What’s important to you? What’s on your agenda?

When we plan our quarterly updates and insights, those are always the questions we start with. What sits at the top of my agenda may not be at the top of yours, and that's exactly as it should be. We all engage with change at different stages and with different priorities. Much of my role is focused on horizon scanning: understanding what's coming, assessing the potential impact, contributing to industry discussions and helping shape future developments before they reach implementation.

All of these stages form part of the change lifecycle, and whether you're focused on what's just around the corner or what needs attention today, there is value in understanding both the destination and the journey.

We recently ran a CGPro Network breakfast, and one of the themes that particularly resonated with me was trust, which is also a core EQ value. One of the key takeaways was that trust is built through consistency, honesty and confidentiality.

With that in mind, this quarterly update is designed to provide a consistent view of the topics shaping our industry, introduce emerging developments, and offer an honest perspective on the progress being made. While confidentiality will always limit how much can be shared on some industry initiatives, I'll aim to provide as much insight as possible into the direction of travel and share further detail as developments become public.

In our Q1 update we explored a number of topics including the Annual General Meeting (AGM), the journey towards digitising the UK shareholding framework, economic crime and corporate transparency, prospectus reform and capital markets for private companies. If you would like a refresher, you can read the update here.

In this edition we will look at what’s changed, what’s new, and what may be coming next.

And if you’d like to explore these topics in more detail Jennifer Rudman, Industry Director for Employee Share Plans, and I will be hosting a joint webinar on 14 July. We’ll be discussing a number of developments affecting both share registration and employee share plans and we’d be delighted if you could join us. Register here and bring your questions for us to answer live at the event.

• Virtual Annual General Meetings (AGMs) - Balancing flexibility and shareholder engagement
• The UK shareholding framework - An evolving landscape
• Economic crime and corporate transparency - Bringing greater clarity to who owns shares
• Prospectus reform and share issue - Making it easier for companies to raise capital and reduce costs
• AIM Market: The future - A focus on making it fit for purpose

Virtual AGMs

Balancing flexibility and shareholder engagement

In our last update, we reported on the announcement made on 20 January 2026, which indicated the government's intention to progress plans to enable virtual AGMs. We expect further detail to emerge through the Department for Business and Trade's wider consultation on corporate reporting. At the time of writing, that consultation has not yet been launched.

The topic continues to generate significant interest amongst our issuer clients and, as part of the ongoing policy discussion, we were pleased to provide government with insights based on AGM formats and associated costs. The information, provided by clients on a confidential basis, demonstrated a broad range of costs across different meeting formats, company sizes and circumstances. Importantly, the data suggested that further analysis would be needed to understand the underlying drivers of those costs, including factors such as sector, shareholder demographics, venue arrangements and engagement objectives. As with many areas of corporate governance, there is unlikely to be a single solution that meets the needs of every company, and optionality may ultimately prove to be an important consideration.

What we have heard consistently from issuers is that legislative change is only one part of the equation. Even if the law were amended to permit virtual AGMs, many companies would still need shareholder support to adopt that approach. A further dimension of the debate is the role played by institutional investors and proxy advisers. Proxy voting recommendations can influence voting outcomes, meaning that views on virtual AGMs will continue to be shaped by a range of stakeholders, each with their own perspectives on shareholder rights, engagement and corporate governance.

At the same time, issuers often observe that shareholder participation takes many forms. Some investors engage directly at meetings, while others participate through proxy voting or through ongoing dialogue with companies outside the AGM process. This has led to broader discussion around the respective roles of AGMs and other shareholder engagement channels, a topic that has been debated within the market for many years.

There are strongly held views on all sides of this discussion. Ultimately, AGMs connect companies and their shareholders, and the most appropriate approach will depend on the circumstances, objectives and shareholder base of each individual company.

Coming soon, we will share some perspectives on AGM practices beyond the UK and how different markets are approaching similar questions around shareholder participation and meeting formats.

Read our research on changes to company Articles of Association over the past three years as companies and shareholders determine how to regulate the running of the company going forwards.

The UK shareholding framework

An evolving landscape

The UK is taking concrete steps to modernise a shareholding framework that still relies on paper processes. At the same time, regulators are beginning to explore what a future digital market infrastructure could look like. The destination beyond digitisation remains uncertain, but the direction of travel is clear

In the last update we highlighted the launch of our co-ordinated communications campaign for issuers, to support them on the journey towards dematerialisation and digitisation of the UK shareholding framework. Access our Dematerialisation Hub for ongoing updates.

As a reminder, the first step is the removal of paper share certificates and creation of fully digitised shareholder records. Industry work has continued to contribute to the work of DEMAT (Dematerialisation Market Action Taskforce). Q2 has seen the culmination of the work to draft the DEMAT report that will be delivered to government and is due for publication as part of the Mansion House speech in July 2026. This report will confirm the timeline for implementation of this first step, expected at the end of 2027, and the action plan needed for delivery. Following this, work will continue to agree industry standards across the operational processes that will be needed in the absence of paper share certificates. And in parallel, DEMAT will work on what is required to deliver Steps 2 and 3, where all shares are recommended to move into the intermediated share ownership chain.

From an issuer perspective, some of the discussions have focussed on the communication plan to shareholders. This is being centrally considered by DEMAT, and the share registration industry has contributed our thoughts to this e.g. FAQs, website pages and using existing issuer communication channels. Shareholder education will not be a one-off event; it will need to continue well beyond implementation, because in reality it will be when a shareholder needs to do something with their shares e.g. sell, or they are part of a deceased person’s estate, that they will be advised that the share certificate is not proof of ownership, and they will need to do things differently. It will be necessary for issuers, through their registrars and their support infrastructure to manage clear and consistent communications and help shareholders to navigate these new processes.

As part of our support for issuers, we recently published an article providing a practical overview of what issuers can learn from how other markets have moved away from paper share certificates. Amongst the findings is that dematerialisation is ultimately driven by legislation, even where markets evolve first. And whilst holding shares through intermediaries is becoming the norm, any mandating towards this requires active protection of shareholder rights. No single model of share ownership has been adopted globally. Instead, each jurisdiction reflects a balance between efficiency, investor choice and regulatory priorities.

Whilst the industry remains focused on completing the move away from paper share certificates, regulators are also beginning to explore a very different question: what could the future of share ownership look like in a fully digital market?

During Q2 the FCA and Bank of England issued a Call for Input on the future of tokenisation, a welcome development considering the US SEC regulator approved tokenised securities in December 2025. This Call for Input considers eight questions, with responses due 3 July 2026. Following this, it is expected that a response statement will be published in summer 2026 and later in 2026 the publication of a full roadmap for the Bank of England and FCA work to digitalisation of the UK wholesale markets. At its simplest, a tokenised share would be a digital record of ownership, with the same legal rights as a share. One of the benefits would be faster settlement of trades; the UK market is currently on T+2, with a move to T+1 agreed for 11 October 2027. Tokenised shares could drive settlement even quicker, to being almost instantaneous – the term being used is “atomic settlement”. Another potential benefit for investors wanting to hold shares in tokenised form, is the broadening of access to investment opportunities.

Linked to this, was the publication of the FCA’s emerging technology horizon scan. In the rapidly changing and accelerating global change in technology, the FCA is considering how emerging technologies could create new outcomes for consumers, firms and markets and acts to highlight new risks the technologies might introduce. This publication makes for an interesting read, and highlights some key trends:

• Technological convergence is accelerating
• Personalised intelligence could help consumers navigate their financial lives
• Synthetic crime is evolving fast and will affect how we tackle financial crime
• Programmable finance could support growth by reshaping financial infrastructure and enabling new markets

On this last point they highlight distributed ledger technologies (DLT) and tokenisation as positive opportunities.

Looking across these developments, it is interesting to consider how wide-ranging the conversation around the future of share ownership has become. On the one hand, the industry is working through the practical challenge of removing paper share certificates, a system that has existed for hundreds of years. On the other, regulators are beginning to explore how emerging technologies such as tokenisation could transform future market infrastructure. Whilst the direction of travel towards greater digitisation appears clear, the long-term end state is far from settled. For issuers, understanding both the immediate changes ahead and the longer-term possibilities will be increasingly important as the UK's shareholding framework continues to evolve.

Economic crime and corporate transparency

Bringing greater clarity to who owns shares

The Economic Crime and Corporate Transparency Act (ECCTA) continues to be implemented in the UK. Its purpose? The overarching purpose is to crack down on economic crime, money laundering and fraud. The role of Companies House reform under the Act is to implement a number of provisions to improve transparency over UK companies and other legal entities to strengthen the business environment, support national security and disrupt economic crime while delivering a more reliable companies register to underpin business activity.

We continue to seek clarity on the timeline for implementation of the changes to the Companies Act 2006 which will require a forename and surname for each directly registered member. Considering the work of the industry group DEMAT, who are working on the digitisation of the UK shareholding framework, a co-ordination of these workstreams and timelines could be beneficial.

So in summary, the position remains the same as we reported in the Q1 update - these changes and requirements are still not in force.

AIM Market: The future

A focus on making it fit for purpose

Jennifer Rudman, Industry Director for Employee Share Plans, and I recently attended the QCA Annual Conference. EQ are members of the QCA that represents small and mid-cap companies, and it was good to see the focus on how to deliver growth and investment for these companies. It was also the day that the LSE announced their consultations on changes to the AIM rules for companies and Nominated Advisers (NOMADs). These changes follow on from an LSE discussion paper and feedback statement in 2025, where they are looking to differentiate AIM from the Main Market. The proposed amendments to the AIM Rules cover several areas:

1. Reducing unnecessary burdens relating to admission,
2. Making it easier to fundraise and enable retail participation,
3. Supporting AIM company acquisition activity,
4. Giving greater flexibility to support innovative and growing companies,
5. Providing greater agency for AIM companies,
6. Attracting international companies and ease of transfer for Main Market companies
7. Leveraging NOMAD corporate finance expertise
8. Buyer beware
9. Further proposed amendments and administrative updates

One thing that stood out, which may be of interest to company secretaries, will be the proposed amendment to AIM Rule 26, that an AIM company is not required to adopt or comply or explain against a particular corporate governance code.

The full LSE AIM Rules Consultation Paper can be found under AIM Notice 62