FRC overhauls the Investor Stewardship Code

The new code – developed through a consultation involving over 1,500 stakeholders – will take effect from 1 January 2026.

The UK Stewardship Code operates as part of a comprehensive regulatory framework alongside the Financial Conduct Authority's oversight of financial markets, The Pensions Regulator's protection of member interests, and the Department for Work and Pensions' pension scheme regulations.

It currently has nearly 300 signatories who represent around £50trn in assets under management.

The FRC said the 2026 code aims to build on its success while responding to feedback from signatories and the wider investment and corporate issuer community.

FRC chief executive Richard Moriarty said: "The UK Stewardship Code 2026 provides signatories with a flexible principles-based framework that provides greater transparency on their stewardship in the face of unprecedented uncertainty.

"Extensive consultation confirmed strong investor backing for the code's importance and has directly informed the changes we have made to ensure it remains fit for the future. The updated code focuses on long-term sustainable value creation while cutting unnecessary reporting and improving engagement quality. New dedicated principles for proxy advisers increase transparency in the investment chain."

He added: "The code is not prescriptive and does not direct how any signatory should choose to invest. It takes a principles-based approach which is focussed on delivering a clear outcome of value creation for clients and beneficiaries."

Key features of the UK Stewardship Code 2026 include:

• An enhanced definition of stewardship: The updated definition focuses on the principle of stewardship as the creation of long-term sustainable value for clients and beneficiaries.
• Reduced reporting burden: The code features fewer principles and shorter 'how to report' prompts instead of detailed reporting expectations, helping to eliminate 'box-ticking' approaches to reporting against the principles. The FRC said early evidence suggests signatories may be able to reduce reporting volume by 20-30% while maintaining quality.
• Flexible reporting structure: The FRC said signatories can submit separate policy and context disclosures and activities and outcomes reports or combine them into a single document. The policy and context disclosure will only need to be submitted once every four years.
• Targeted Principles: The code now includes dedicated principles for different types of signatories, including asset owners, asset managers, and for the first time, specific principles for proxy advisors, investment consultants, and engagement service providers.
• New guidance: Optional guidance will provide useful tips and examples to support effective implementation, particularly for those managing non-equity asset classes.
  The FRC said that, to support signatories in adapting to the new code, 2026 would serve as a transition year. During this period, it said no existing signatories will be removed from the signatory list following their 2026 application.

The FRC said this will allow current signatories to familiarise themselves with the new format and use it as a platform to explain their individual approach to stewardship. The FRC will engage with signatories through publications, webinars, and bilateral discussions to support the transition.

Read the UK Stewardship Code 2026 and its Feedback Statement in full here.