AIMing high, acting fast: the London Stock Exchange's feedback statement plans to revitalise AIM with immediate rule changes

In April 2025, the London Stock Exchange (LSE) published a discussion paper "Shaping the Future of AIM". It posed 39 questions to market participants to solicit feedback from stakeholders on the functioning and positioning of AIM, the market for small and medium-size growth companies.

The LSE has now responded to the feedback gathered from its discussion paper. Buoyed by broad market support for its initiatives, the LSE's feedback statement sets out its plan to reassert AIM's buyer-beware identity, reduce friction and cost for growth companies and refocus the role of nominated advisers (known as Nomads).

What has changed?

Founder control and governance 

Dual-class share structures: With immediate effect, dual-class share structures meeting the current Main Market requirements (applying equivalency where appropriate) will be acceptable for prospective AIM companies. Consistent with a buyer-beware market, these share structures will be disclosed allowing investors to make their assessments according to their own risk tolerance. This will be attractive to many founder-led companies seeking an admission to AIM.

Director remuneration (AIM Rule 13): To improve competitiveness with private equity, international peers and private markets in terms of talent, where non‑standard director remuneration terms include reasonable commercial protections for the company (for example, good/bad leaver provisions), the Nomad is no longer required to provide a "fair and reasonable" opinion under AIM Rule 13. All other aspects of the rule continue to apply.

M&A execution 

Reverse takeover or significant transaction: AIM companies are habitually at growth stage and may seek to grow inorganically (that is, through acquisition). Pending rule changes, where a Nomad can demonstrate that an acquisition does not result in a fundamental change of business, AIM Regulation may treat it as a significant transaction under AIM rule 12 rather than a reverse takeover under AIM rule 14. AIM Regulation may still require shareholder approval, but a new admission document would not be required.

Suspension flexibility: AIM Regulation will consider requests from Nomads not to suspend trading of a company's securities on the notification of a proposed reverse takeover (and where an admission document is not published at that time) if appropriate alternative disclosure can be made.

Changes to the class tests: The threshold for significant transactions will increase from 10% to 25% through a redraft of the AIM Rules for Companies (AIM Rules) and there is broad support for the removal of the profits class test (except in the case of related party transactions). It is expected that this will aid an AIM company in swiftly carrying out M&A activities and removes the anomaly that AIM was, in this regard, more onerous than the main market. Accordingly, before the AIM Rules are updated to reflect these points, Nomads are encouraged to submit derogation requests. 

Admission documents and financial reporting 

Incorporation by reference: Derogations are now available to permit companies to incorporate historical financial information into admission documents by reference where it is readily accessible to investors. 

UK GAAP (FRS 102) permitted: Recognising that most UK applicants prepare accounts under UK Generally Accepted Accounting Practice (GAAP) pre‑admission, Nomads may request derogations to use Financial Reporting Standard (FRS) 102 for historical financial information (and other local GAAPs where International Financial Reporting Standards (IFRS) equivalence is demonstrated). Given the increased alignment between UK GAAP and IFRS for periods beginning on or after 1 January 2026, this change could materially reduce cost and timetables for AIM admissions.

Second lines of securities: AIM Regulation will consider derogations from the requirement to publish an admission document when admitting a second line of securities, provided there is adequate disclosure of the rights attaching to those securities (for example, a new class of shares, warrants or loan notes).

Attracting international admissions 

AIM Designated Market (ADM) fast-track admissions: Responding to criticisms that market practice for ADM admissions has evolved to mirror the work undertaken by Nomads for standard AIM admissions, the LSE is looking to Nomads for guidance in streamlining the process with the aim that the ADM route provides a genuine fast-track route to market. The list of eligible markets for an ADM admission will be reviewed with an emphasis on the extent of publicly available information on the home exchange.

What might change in future?

Admission document design 

The LSE is to review content requirements, placing the focus on material disclosures, the removal of redundant or disproportionately burdensome requirements (of which it considers the working capital statement to be one) and investigating how digital solutions might aid circulation and digestion of admission documents. This is consistent with the approach in the Public Offer and Admission to Trading Regulations (POATRs).

Trading halts to support secondary fundraising activity 

The LSE is considering trading halts for secondary fundraises. Feedback received suggested that this would be beneficial to companies and investors by reducing transaction risk (caused by potential market volatility), enabling discussions with investors (including retail investors and those who would not normally be wall-crossed). Precedent from international markets will be reviewed alongside the process for requesting such halts. 

Role of the Nomad 

A consistent theme of the discussion paper and the feedback statement is the "mission creep" in the role of the Nomad. The LSE wishes to restore the Nomad's role as a strategic adviser focused on corporate finance rather than as risk-averse compliance official.

It will engage with firms on a new technical note setting expectations for the role, expected in the first half of 2026, and is piloting an updated approach to qualified executive (QE) approvals as part of the annual eligibility process. 

AIM Rule 11 

Noting the often duplicative disclosure regimes of AIM Rule 11 and the UK Market Abuse Regulation (UK MAR), the LSE will consider how best to reshape the AIM Rules so that AIM and the main market remain under the same standard of disclosure under UK MAR, while keeping the Nomad fully involved and informed about the AIM company's approach to disclosure. 

AIM's digital presence 

The LSE intends to review AIM's digital presence and branding so it retains its distinct character and separates itself further from the main market and the LSE's broader offering. 

What else is the LSE doing to support AIM?

Rule changes and consultations such as the ones noted above are only part of the story. The LSE is engaging with stakeholders to provide the most supportive listing environment on AIM as possible. These initiatives include:

Audit fees: The LSE is consulting with the Financial Reporting Council (FRC) to provide more proportionate audit requirements for AIM companies. The feedback statement notes the (incorrect) increased market practice of classifying more AIM companies as "public interest entities" (increasing audit fees). Only AIM companies operating as banks, credit institutions or insurance companies fall within this definition, according to the FRC.

Proxy advisers: Following concerns of overreach on the part of proxy advisers, the LSE will work with Nomads to understand the feedback from AIM companies on the role which proxy advisers play and whether they are abiding by the UK Stewardship Code. A voluntary disclosure regime for AIM companies is being considered whereby AIM companies could disclose the engagement they have had with proxy advisers.

Availability of capital and fiscal incentives: The LSE continues to press for targeted pensions allocations into AIM companies under the Mansion House Compact and to improve retail participation (supported by the POATRs). Through the Capital Markets Industry Taskforce it will advocate for certainty and improvements to risk capital tax incentives such as Business Property Relief, EIS/VCT and ISAs.

Corporate governance: The LSE is working with the Quoted Companies Alliance to ensure AIM's "comply or explain" approach remains proportionate and avoids "compliance for compliance's sake", with disclosures that are genuinely useful to investors.

Bulletin board users: The LSE is working with the Financial Conduct Authority (FCA) and enforcement agencies regarding behaviour on certain platforms that may amount to market abuse and encourages companies to report instances of this and unacceptable public abuse of directors.

Next steps

The feedback statement commits the LSE to publish a formal consultation paper on the redrafted AIM Rules as well as a new technical note for Nomads in the first half of 2026.

In the meantime, companies and Nomads can and should use the immediate derogations to reduce cost and execution risk for admissions, M&A and capital raisings.

Osborne Clarke comment

When the discussion paper launched, we encouraged the LSE to act quickly and decisively. By implementing targeted changes with immediate effect, the LSE has recognised this urgency. It is also clear from the statement that the LSE has engaged constructively with the FRC, FCA and other stakeholders. This approach should continue.

The commitment to remove unnecessary friction (on admission, in M&A execution and in ongoing obligations) should help reset AIM's buyer‑beware ethos that has underpinned its success for 30 years. We encourage prospective issuers to look again at AIM in light of these changes, and existing AIM companies to capitalise on the new freedoms and flexibilities as they shape their growth strategies.

However, some concerns remain. In particular, while the feedback statement questions the value of a formal working capital statement in an admission document, we continue to see an important role for such a statement on AIM, given the market's profile. Any reform here should be approached with care. 

If you wish to discuss this Insight or the discussion paper, please contact the experts below or your usual Osborne Clarke contact. We are here to answer any questions you might have.