Recent Developments for UK PLCs — October 2026

Once-in-a-Generation Overhaul of UK Corporate Reporting

On 7 September 2026, the government published “Modernising Corporate Reporting to support long-term economic growth“, an ambitious, wide-ranging consultation paper which proposes to overhaul the UK’s corporate reporting framework.

In our previous edition, we covered the government’s October 2025 announcement of near-term reforms (including the abolition of the directors’ report, the exemption of most medium-sized private companies from strategic report requirements, and the exemption of certain subsidiaries from producing a strategic report). The government has confirmed that statutory instruments giving effect to those earlier reforms will be laid before Parliament in due course.

This consultation paper goes significantly further by describing high-level proposals for fundamental reform of almost every aspect of the reporting regime.

Key proposals impacting listed companies include:

• Simplification of strategic reporting requirements: replacing most existing prescriptive strategic report requirements with a core set of baseline narrative disclosures, covering a company’s business model, performance review, resources and relationships, strategy, and principal risk exposures. The government is also considering whether all wholly owned subsidiaries with a UK parent (including companies traded on a UK public securities market) should be exempt from the strategic reporting requirements.
• Streamlined framework for financial reporting: moving detailed financial-reporting requirements out of the law and into relevant standards. The government would also streamline the range of accounting standards that are available for use by UK companies to four main UK standards (rather than enabling companies to rely on IFRS as issued by the International Accounting Standards Board): UK-IAS, UK GAAP for large companies, UK GAAP for SMEs, and UK GAAP for micro-entities.
• Remuneration: removing or simplifying several reporting requirements that the government considers are not providing financially material or decision-useful information, such as the CEO-employee pay ratio reporting, the relative importance of spend on pay, and certain disclosures relating to the work of the remuneration committee. Notably, the government is also consulting on whether to remove the shareholders’ annual advisory vote on the directors’ remuneration report, given that remuneration policy is already subject to a binding vote on a triennial basis.
• Sustainability disclosures: considering the approach to sustainability-related financial disclosures, including the future role of the UK Sustainability Reporting Standards (UK SRS) and their interaction with existing climate-related financial disclosure requirements. These proposals are covered in further detail in this Latham article.
• Corporate governance: streamlining corporate governance reporting by, among other things, requiring the publication of certain disclosures only on a company website rather than the annual report and introducing other measures to make better use of the UK Corporate Governance Code’s comply or explain flexibility.
• Digital shareholder communications: enabling the electronic communication of annual reports and other company documents to shareholders by default.
• Virtual AGMs: clarifying the law on virtual annual general meetings by making clear that a “place” of meeting can include virtual locations, where there is shareholder consent. The government is also seeking views on the appropriate safeguards (such as supermajority consent and periodic reapproval).
• Distributable profits and reserves: replacing the current rules on distributable profits and capital maintenance with a solvency-based regime.

The consultation is open for 12 weeks, closing on 30 November 2026. Given the breadth and significance of the proposals, listed companies will want to consider the potential implications and engage early. Further, the FCA will soon launch their review of the Disclosure Guidance and Transparency Rules.

UK SRS to Replace TCFD Disclosures Requirements for Listed Companies

On 30 September 2026, the FCA published Policy Statement PS26/19, “Aligning listed issuers’ sustainability disclosures with international standards”, which sets out its final rules to align listed companies’ sustainability and climate disclosures with the UK Sustainability Reporting Standards (UK SRS). The new rules will replace the existing climate disclosure requirements aligned with the Task Force on Climate-related Financial Disclosures (TCFD).

Key features:

• Comply or explain: The FCA has simplified the regime it consulted on, and now applies a comply or explain approach to all categories of disclosure, including UK SRS S2 (climate), UK SRS S1 (non-climate), and Scope 3 emissions data. The FCA considers that this approach will allow issuers to focus on high-quality, decision-useful information rather than applying the standards mechanically. Where issuers do not provide financially material information, a proportionate explanation of their reasoning and judgement can itself be useful to investors.
• Scope: The rules will apply to the five listing categories currently subject to the TCFD-aligned rules, which are equity shares (commercial companies), equity shares (transition), non-equity shares and non-voting equity shares, equity shares (international commercial companies secondary listing), and depositary receipts. International commercial companies with a secondary listing and depositary receipt issuers must also report against UK SRS on a comply or explain basis, rather than signposting their home-jurisdiction disclosures as originally proposed.
• Timing and transitional relief: The rules will apply to accounting periods beginning on or after 1 January 2027, with first reporting in 2028. Scope 3 disclosures get one year of transitional relief (expiring for financial years beginning from 1 January 2028) and non-climate UK SRS S1 disclosures get two years (expiring for financial years beginning from 1 January 2029).

Alongside the policy statement, the FCA published Primary Market Bulletin 66 to consult on a new Technical Note 803.1, which sets out the level of detail it expects when issuers either comply or choose to explain against UK SRS. Comments are due by 28 October 2026, and the FCA aims to finalise the guidance before the rules come into force.

To prepare for the new regime, the FCA encourages listed companies to identify financially material sustainability and climate-related risks and opportunities. It also asks them to review governance arrangements, build sustainability into corporate strategy, assess business model resilience, and develop the necessary data, metrics, and targets. The FCA further recommends putting internal controls in place, building capability, and engaging with investors on their disclosure expectations. Listed companies will want to consider the FCA’s draft guidance and begin preparations well ahead of the first reporting cycle.

FRC Annual Review of Corporate Reporting Flags Areas for Improvement

On 29 September 2026, the Financial Reporting Council (FRC) published its Annual Review of Corporate Reporting 2025/26, which sets out its assessment of the current state of UK corporate reporting and highlights areas for improvement. The FRC found that the proportion of its reviews resulting in substantive queries has fallen for the second consecutive year. Restatements prompted by FRC reviews have also fallen for the second year in a row, with the majority of restatements this year continuing to arise in companies outside the FTSE 350.

Cash flow statements returned to the top of the list of most frequently raised issues for the first time in four years (e.g., arising from companies erroneously classifying certain cash flows under “investing” rather than “financing”, or the incorrect inclusion or exclusion of items within cash flow statements), while fair value measurement entered the top five for the first time. A substantial portion of the fair value measurement queries relate to investment trusts (and similar entities) which had not clearly explained how they had applied the requirements of the disclosure standard to their fair value measurements and the valuation techniques they had used. The FRC also observed that the number of complaints about specific corporate reporting matters this year has doubled year-on-year, noting that several of the complaints appear to have been drafted using AI.

Looking ahead, the FRC noted that companies should be well advanced in their planning for the implementation of IFRS 18 (applicable for periods beginning on or after 1 January 2027, and which introduces requirements on management-defined performance measures), and that the UK Corporate Governance Code provision 29, which requires boards to make a declaration on the effectiveness of their material internal controls (on a comply or explain basis), applies for the first time for periods beginning on or after 1 January 2026. The FRC emphasised that many common areas of challenge could be identified through sufficiently robust review processes and encouraged companies to consider the key expectations set out in section 4 of the report when preparing their next annual report and accounts.

Regulators Puts Cybersecurity in the Spotlight

Cyber security is attracting sustained regulatory attention for UK listed companies, particularly in relation to market disclosure, internal controls, and annual reporting.

• Disclosing inside information relating to cyber incidents: In PMB 66, the FCA flags that not every cyber incident will amount to inside information, but companies should assess that question case by case as soon as they become aware of an incident, and it is prudent to start from the assumption that it could. Companies should be taking into account the scale and nature of the incident (including compromise of sensitive customer or commercial data), reputational impact, and actual or expected operational or financial disruption. The FCA gives examples where a delay of disclosure may be justified, for example while negotiating with attackers, but confidentiality must be ensured and continually reassessed because attackers may hold the information. Companies should ensure any disclosures of inside information relating to cyber incidents to government or law enforcement agencies are lawful, with recipients warned that the information may be inside information and the basis of disclosure documented by the company.
• Cybersecurity controls: On 23 September 2026, the FRC published a mythbuster addressing common concerns around the application of Provision 29 of the UK Corporate Governance Code (i.e., a board’s annual declaration on the effectiveness of material internal controls) to cybersecurity controls. Cybersecurity is a significant issue for companies, especially those who rely on digital systems and technologies, like AI, to conduct business operations.
  Prepared in consultation with the Department for Digital, Culture, Media and Sport and the National Cyber Security Centre, the mythbuster clarifies that Provision 29 does not require boards to disclose commercially sensitive information or the specific technical controls underpinning a company’s cyber resilience, nor does it expect boards to guarantee total cybersecurity. Rather, the declaration should focus on whether the board is satisfied that its material controls were effective as at the balance sheet date and explain the process by which it monitored and reviewed their effectiveness. The FRC also confirmed that the declaration is a point-in-time assessment and does not imply enduring protection against future threats, recognising that the cyber risk landscape can change rapidly and that boards cannot plan for or mitigate against unknown risks.

Updated Working Capital Guidance Gives Flex for Uncommitted Facilities

On 30 September 2026, the FCA published Primary Market Bulletin 66, which finalises Technical Note 619.3 and makes consequential amendments to Technical Note 321.5 on working capital statements and risk factors in the prospectus. These revised guidelines allow issuers to take into account financing under uncommitted facilities in their working capital calculations in certain circumstances, by incorporating additional disclosures alongside the working capital statement.

The intention of this change is to allow issuers to avoid the costs of obtaining committed financing solely for the purpose of giving a clean working capital statement, where certain uncommitted facilities can be considered available for the entirety of the working capital period. Where the uncommitted facilities cannot be considered available and sufficient committed financing cannot be secured, issuers should instead include a qualified working capital statement in the prospectus.