Takeover Panel: Consultation – dual class share structures, IPOs and share buybacks (PCP 2025/1)

On 3 July 2025 the UK Takeover Panel (Panel) published PCP 2025/1: Dual class share structures, IPOs and share buybacks (Consultation) setting out a proposed framework for the application of the UK Takeover Code (Code) to companies with dual class share structures (DCSS companies). The Consultation also proposes certain changes (not restricted to DCSS companies) in relation to IPOs and to the Code rules on share buybacks. 

The Consultation closes on 26 September 2025, and the Panel has indicated it intends to publish final rules by the end of the year. A summary of some of the key areas covered is included below.

DCSS companies

Given the different types of DSCC structures used and the likelihood these will continue to evolve over time, the Panel notes that the new provisions are intended to be principles-based in order to allow them to be applied flexibly to different types of DCSS. 

The majority of the proposed Code amendments relate to what the Consultation refers to as DCSS 1 structures (Class B shares that carry multiple votes on all matters from the point of issue and are extinguished/converted to ordinary shares on particular trigger events), as the Class B shareholder(s) will hold a specific and identifiable percentage of the DCSS company’s voting rights.

The Consultation also discusses the application of the Code to what it refers to as DCSS 2 and 3 structures (a single special share that confers effective majority or veto rights on some or all resolutions – either from the point of issue (DCSS 2) or following a change of control of the company (DCSS 3)) where the special shareholder does not hold a specific and identifiable percentage of the voting rights. However, the Panel does not consider it necessary to make material amendments to the Code to take account of these types of structures.

In the context of the application of the Code’s mandatory offer provisions to DCSS 1 companies, the Panel proposes that, where a shareholder’s proportionate voting rights cross a Rule 9 threshold as a result of the Class B shares being converted/extinguished, a dispensation from making a mandatory offer would normally be granted unless either (a) the trigger event is the expiry of a timed sunset provision (although see below in relation to dispensation by disclosure) or (b) at the time it acquired shares the shareholder had reason to believe a trigger event (other than a timed sunset) would occur. 

It is also proposed that, at the time of IPO, the Panel would be able to grant a dispensation to a specific shareholder (or group of shareholders acting in concert) in a DCSS 1 company from the requirement to make a mandatory bid as a result of a timed sunset or other trigger event provided:

• there is appropriate disclosure in the IPO documentation of the maximum percentage of voting rights the shareholder would hold following the sunset or other trigger event (based on the share capital of the company at the time of IPO); and
• except with Panel consent there have been no additional acquisitions of interests in shares by the shareholder/its concert parties between IPO and the time of the trigger event. This would be subject to certain exceptions – e.g. take up of securities pro rata or which are the subject of a separate Rule 9 waiver and increases as a result of buybacks.

In the context of the Code rules on frustrating action, the Panel notes that it will not usually consider the issue of Class B shares to be a restricted action unless it takes place during a “relevant period” (i.e. when the company is in an offer period or subject to a current or recent approach and the frustrating action rules are therefore engaged) and that the exercise by a director of their rights as shareholder under the special shares is unlikely to constitute frustrating action.

Other areas covered in the Consultation in relation to DCSS companies include (among other things) the approach to pricing of a mandatory offer, the formulation of the acceptance condition, and the application of the Code rules on comparable offers and special deals. 

Other proposed changes

The Consultation also sets out certain more general proposed changes including:

• IPOs: Introducing a specific requirement for companies to make appropriate Code disclosure in their listing documentation and to consult the Panel in relation to this as well as codifying the ability of the Panel to grant a Rule 9 dispensation by disclosure in certain circumstances.
• Buybacks: Including amending the provisions around “disqualifying transactions” (which the Panel considers can operate in an overly restrictive manner); introducing a requirement to make certain disclosures where the voting rights of an “innocent bystander” might be increased through a Rule 9 threshold; and codifying existing practice that the Panel may treat a share buyback as an “offer” where it could result in all/substantially all of the company’s shares being held by one person or a group of persons acting in concert. 

(Takeover Panel, PCP 2025/1, 03.07.2025)

Takeover Panel: New Practice Statements

On 3 July 2025 the UK Takeover Panel (Panel) published new Practice Statements in relation to profit forecasts, quantified financial benefits statements and investment research (PS 35) and unlisted share alternatives (PS 36). 

Profit forecasts quantified financial benefits statements and investment research 

PS 35 describes the way in which the Panel normally interprets and applies certain aspects of Rule 28 of the Takeover Code (Code) including (among other things): the application of Rule 28 following the rejection of an approach; when the Panel may be prepared to grant dispensations from certain requirements in the context of long term forecasts, profit estimates and quantified financial benefits statements; the application of the rules to profit forecasts provided privately by the target to a bidder for due diligence purposes and subsequently included in a bidder document/announcement; and when a statement will be treated as an aspirational target rather than a profit forecast. It also describes the way in which the Panel normally interprets and applies Note 4 on Rule 20.1 in relation to investment research published by a connected firm and when the Panel may be willing to dispense with the requirement for investment research published by a connected firm to be pre-vetted.

Unlisted share alternatives

PS 36 sets out guidance on how the Panel normally interprets and applies relevant Code provisions in respect of an unlisted share alternative (also referred to as a stub equity alternative) to a cash offer. Among other things it discusses considerations around: the terms of the alternative (including minimum/maximum acceptance thresholds and exchange ratios); the rights attaching to the unlisted securities, including interaction with Rule 16/special deals; the level of disclosure the Panel would expect to see; the approach to valuation of the stub equity under Rule 24; and situations where the target board is unable to form a recommendation in respect of the unlisted share alternative and/or the Rule 3 adviser is unable to advise whether or not the financial terms of the alternative offer are fair and reasonable.

(Takeover Panel, Practice Statement 35 and Practice Statement 36, 03.07.2025)

Companies House: Updated guidance on preparing and filing Companies House accounts

On 1 July 2025, Companies House published updated guidance on preparing and filing the accounts a company must deliver every year to Companies House. In most cases the updates reflect changes being made by the Economic Crime and Corporate Transparency Act 2023 (ECCTA) to the Companies Act 2006.

Key updates include the following:

• Using software to file accounts – from 1 April 2027, all companies, including dormant companies, must file accounts at Companies House using commercial software. Companies will need to apply to file with Companies House using software. Companies House will then create a presenter account and give the company a presenter ID and code. The paper filing route for accounts will end on 1 April 2027 and the current online service for filing accounts and a Company Tax Return will close on 31 March 2026.
• Micro-entity accounts - from 1 April 2027, the accounts filing options for micro-entity companies are being streamlined and as part of the changes, micro-entities will be required to file a copy of their profit and loss account at Companies House.
• Small company accounts - from 1 April 2027, small companies will have to file a copy of their balance sheet, directors’ report, auditor’s report (unless exempt) and profit and loss account at Companies House. They will no longer be able to file abridged accounts.
• Small company audit exemption statements - from 1 April 2027, if a company is claiming an audit exemption, it will need to give an enhanced statement from the directors on the balance sheet. This will need to state the exemption the company is claiming and confirm that the company qualifies. 
• Dormant companies – these, like all other companies, will need to file their accounts via commercial software from 1 April 2027. From that date, dormant subsidiary companies will need to deliver all the component parts of their accounts to Companies house together rather than separately as they are currently permitted to do.
• Audit exemption for subsidiary companies - from 1 April 2027, if a subsidiary company is claiming an audit exemption, the company will need to provide an enhanced statement from the directors on the balance sheet. This will need to state the exemption being claimed and confirm that the company qualifies.
• Accounting reference date – the number of times a company can shorten its accounting reference period is being limited. From 1 April 2027, a company will have to provide a business reason if they want to shorten the period more than once within 5 years and this measure will be the subject of separate legislation as it is not provided for in ECCTA. 

(Companies House, Guidance on preparing and filing Companies House accounts, 1.07.2025)

Parliament: The Companies Authorised to Register, Unregistered Companies and Overseas Companies (Application of Company Law) Regulations 2025

On 30 June 2025, The Companies Authorised to Register, Unregistered Companies and Overseas Companies (Application of Company Law) Regulations 2025 were laid before Parliament. These Regulations amend secondary legislation made under the Companies Act 2006 (CA 2006) to extend identity verification requirements, as well as other reforms to company law made by the Economic Crime and Corporate Transparency Act 2023 (ECCTA), to overseas companies, companies authorised to register, and unregistered companies.

Under the CA 2006, as amended by ECCTA, directors and people with significant control (PSCs) of UK companies will be required to verify their identity from a date yet to be determined in Autumn 2025. These Regulations extend identity verification requirements to rarer types of corporate structures, namely overseas companies, unregistered companies and companies authorised to register. 

The Regulations do this by making amendments to the Companies Authorised to Register Regulations 2009, the Unregistered Companies Regulations 2009 and the Overseas Companies Regulations 2009 to require that their directors and, where applicable, PSCs, are identity verified and not disqualified directors under director disqualification legislation. The Regulations also makes other amendments to those regulations to apply provisions introduced by, and make amends which are consequential on, ECCTA’s reforms to company law. 

To enforce these new requirements, the Regulations also apply offences to these entities in relation to failure to comply with identity verification obligations and they make transitional provisions to require that existing directors of unregistered companies and existing directors of overseas companies are identity verified. Transitional provisions are not necessary for companies authorised to register, as once they are registered provisions under the CA 2006 apply to them as if they were a company formed and registered under the CA 2006.

The provisions in the Regulations come into force when the relevant new CA 2006 provisions (section 167M - prohibition on director acting unless ID verified, section 167G – duty to notify Registrar of change in directors, and section 790LA - duty to notify Registrar of confirmed persons with significant control) come fully into force.

(The Companies Authorised to Register, Unregistered Companies and Overseas Companies (Application of Company Law) Regulations 2025 (SI 2025/761) and Explanatory Memorandum, 30.06.2025)

Parliament: The Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025 – Draft

On 30 June 2025, the Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025 were laid before Parliament in draft. These draft Regulations apply certain company law provisions introduced into the Companies Act 2006 (CA 2006) by the Economic Crime and Corporate Transparency Act 2023 (ECCTA) to limited liability partnerships (LLPs).

The relevant company law provisions being applied to LLPs are those concerning identity verification, prohibitions on the appointment of disqualified directors, and the removal of the requirement to keep certain “local” registers of information relating to directors and persons with significant control (PSCs).  

Most of the provisions in the draft Regulations will come into force when section 167M CA 2006 (prohibition on director acting unless ID verified) comes into force. Certain provisions relating to PSCs come into force immediately after section 790LA CA 2006 (duty to notify Registrar of confirmed persons with significant control) comes into force. Provisions relating to the delivery of a statement that a member or PSC of an LLP is not disqualified under the director disqualification legislation will come into force only when section 167G CA 2006 (duty to notify Registrar of change in directors) comes fully into force. 

Regulations 13 to 16 of the draft Regulations contain transitional and saving provisions relating to the abolition of local register provisions being applied to LLPs. In regulations 13 and 14, where an LLP was required to make a note in its register of members or PSC register under one of the provisions in column 1 of the relevant table, it will instead be required to give a notice to the Registrar of Companies of the change under the corresponding provision in column 2, and will have 14 days from the day that section 43 of ECCTA comes into force to do so. Regulation 15 saves provisions requiring notification of changes to an LLP’s PSCs. Regulation 16 makes transitional provision in relation to the delivery of identity verification statements of existing members of LLPs.

The draft Regulations have yet to be approved by resolution of each House of Parliament.

(The Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025 – Draft, 30.06.2025)

Parliament: The Register of People with Significant Control (Amendment) Regulations 2025 – Draft

On 30 June 2025, The Register of People with Significant Control (Amendment) Regulations 2025 were laid before Parliament in draft. Among other things, these draft Regulations make some amendments to new requirements relating to the “People with Significant Control” (PSCs) of companies. The new requirements were inserted into the Companies Act 2006 (CA 2006) by the Economic Crime and Corporate Transparency Act 2023 (ECCTA). 

Currently, companies are required to maintain a “local” PSC register and record PSC-related information in it, including various “additional matters” relating to the company’s investigations into its PSCs. Companies are required to update their local PSC register within 14 days of having confirmation of a change occurring. Companies are then required to update Companies House within 14 days of updating their local PSC register. 

ECCTA has introduced amendments that will require companies to report PSC information directly to Companies House, who will hold the “central” PSC register. Companies will be required to update Companies House within 14 days of having confirmation of a PSC change occurring. The draft Regulations also require the delivery of information to Companies House under the new regime relating to the company’s investigations into its PSCs, including relevant dates relating to any changes to PSC information. 

The draft Regulations achieve this by amending Part 21A CA 2006 (which concerns the PSC regime) and inserting new sections into it. In addition, Regulation 15 amends the Register of People with Significant Control Regulations 2016 (SI 2016/339), by inserting new regulation 8A. This requires a company to notify Companies House when it knows, or has cause to believe, that certain information previously delivered to Companies House is no longer true. 

These draft Regulations will come into force immediately after section 790LA CA 2006 (duty to notify Registrar of confirmed persons with significant control) comes fully into force.

The draft Regulations have yet to be approved by resolution of each House of Parliament.

(The Register of People with Significant Control (Amendment) Regulations 2025 - Draft and Explanatory Memorandum, 30.06.2025)

Parliament: The Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025 - Draft

On 1 July 2025, The Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025 were laid before Parliament in draft. These draft Regulations make amendments to primary and secondary legislation which are consequential on changes made to company law by the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

The draft Regulations make changes to various pieces of primary and secondary legislation which are consequential on ECCTA removing the requirement for companies to maintain their own versions of registers (i.e. ‘local registers’) containing information about their directors, people with significant control (PSCs) and secretaries. Instead, companies will report information directly to Companies House, which will hold ‘central’ registers. 

The draft Regulations also include other miscellaneous provisions, including the following: 

• a requirement that a person or entity applying to be an authorised corporate service provider (ACSP) provides their anti-money laundering registration number to Companies House with their application to become an ACSP; 
• provisions to require ‘unique identifiers’ (the. codes issued by Companies House when an individual’s identity has been verified) to be supplied by individuals who have had their identities verified alongside statements that their identity is verified, enabling Companies House to confirm that the individual’s identity is verified, and 
• provisions requiring the Registrar of Companies not to make certain identity verification statements available for public inspection.

The Regulations are proposed to come into force at the same time as section 43 (prohibition on director acting unless ID verified) of ECCTA comes into force.

The Regulations have yet to be approved by resolution of each House of Parliament.

(The Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025 – Draft and Explanatory Memorandum, 01.07.2025)

Parliament: Private Member’s Bill - Company Directors (Duties) Bill

On 27 June 2025, the Company Directors (Duties Bill was published ahead of its second reading in the House of Commons on 4 July 2025. This is a Private Members Bill that had its first reading in October 2024.

It is a Bill to amend section 172 Companies Act 2006 (CA 2006) to require company directors to balance their duty to promote the success of the company with duties in respect of the environment and the company’s employees. To achieve this, the Bill proposes a new section 172(1) CA 2006 as follows:

“(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of— (a) its members as a whole, (b) the environment, and (c) the company’s employees.”

For these purposes it is stated that “the environment” includes the natural environment and the social environment, and “employees” includes workers.

New sections 172(1A) and (1B) then provide as follows:

“(1A) In carrying out the duty under subsection (1), a director of a company must have regard to— 

(a) the likely consequences of any decision in the long term, 

(b) the interests of the company’s employees, 

(c) the need to foster the company’s business relationships with suppliers, customers and others, 

(d) the impact of the company’s operations on the community and the environment,

(e) the desirability of the company maintaining a reputation for high standards of business conduct, and 

(f) the need to act fairly as between members of the company. 

(1B) In carrying out the duty under subsection (1), a director of a company must seek to reduce (so far as is reasonably practicable) harms the company creates to the environment.”

The six factors in proposed section 172(1A) are the same as those in the current section 172(1) CA 2006 save that the words “(amongst other matters)” are not included.

For companies that are not medium-sized, it is also then provided that a section 172(1) statement prepared under section 414CZA (Section 172(1) statement) C A 2006 must include a description of the steps the directors have taken to comply with their duties under proposed section 172 (1) to (1B). 

The proposed date in force is 6 April 2026.

(Parliament, Private Member’s Bill, Company Directors (Duties) Bill, 27.06.2025 and here).

FCA: Amendments to UKLR 11

On 25 June 2025 the Financial Conduct Authority (FCA) made amendment Instrument FCA 2025/26 which sets out certain amendments to Chapter 11 of the UK Listing Rules (UKLR) in relation to closed-ended investment funds (CEIFs). 

The amendments, which came into effect on 27 June 2025 and are referred to in Handbook Notice No 131, reinstate the requirement to ensure that (in circumstances where the UKLR require a CEIF to obtain shareholder approval for a related party transaction) the related party/its associates do not vote on the relevant resolution. As discussed in sections 3.31 – 3.45 of Handbook Notice No. 131, the failure to carry this requirement forward was an unintended omission when changes were made to the UKLR in July 2024. 

For the avoidance of doubt, the rules on when a CEIF must obtain shareholder approval for a related party transaction have not changed. As set out in UKLR 11.5.5R this will be required for “relevant related party transactions” (in summary, those relating to the fees/remuneration payable to the investment manager or members of its group) which represent 5% or more on any of the class tests or are uncapped.

(FCA, Handbook Notice No 131, 27.06.2025)

Instrument FCA 2025/26

ISSB: Comprehensive review of priority SASB Standards and targeted amendments to others proposed

On 3 July 2025, the International Sustainability Standards Board (ISSB) published two exposure drafts proposing amendments to the SASB Standards and consequential amendments to the Industry-based Guidance on Implementing IFRS S2.

The proposed amendments:

• present a comprehensive review of nine industries that were prioritised (all eight industries in the Extractives & Minerals Processing sector and the Processed Foods industry);
• align some metrics in a further 41 industries for topics such as Water Management and Workforce Health & Safety; and
• propose updates to Industry-based Guidance on Implementing IFRS S2 (affecting the nine prioritised industries and 37 of the 41 industries) to maintain alignment with climate-related content in the SASB Standards.

The ISSB included these enhancements in its 2024–2026 work plan to provide timely support to companies applying IFRS Sustainability Disclosure Standards (ISSB Standards) and to enhance the decision-usefulness of information provided to investors. This work will support implementation of the ISSB Standards, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures and will also benefit the many companies that apply the SASB Standards on a voluntary basis.  

Comments are requested by 30 November 2025.

(ISSB, Exposure Draft and comment letters: Proposed Amendments to the SASB Standards, 03.07.2025)

(ISSB, Exposure Draft and comment letters: Proposed Amendments to the Industry-based Guidance on Implementing IFRS S2, 03.07.2025)

(ISSB, ISSB proposes comprehensive review of priority SASB Standards and targeted amendments to others, 03.07.2025)