London Stock Exchange announces discussion on the future of AIM

The LSE recognises that, whilst the AIM Rules have remained broadly unchanged over recent years, market practice has continued to evolve for companies, investors and intermediaries. The LSE notes that whilst this has often resulted in additional due diligence and compliance requirements and has contributed to increasing the overall cost of an issuer being admitted to AIM, there has not been a corresponding increase in capital or liquidity being made available to such companies.

The wider market is encouraged to engage with the Paper, which is open for responses until 16 June 2025. Feedback to the Paper will inform specific proposals for changes to the AIM Rules, which will be subject to further consultation.

Changes to the regulatory design of AIM

The Paper notes that the LSE's top priority is to increase the flow of capital into AIM and to make sure that capital comes from a diverse range of sources to maximise liquidity. The LSE recognises that there are many factors in maintaining adequate liquidity, including ensuring that there is a broad mix of individual, institutional and tax-incentivised investors. The Paper asks for views on matters including whether the recent government initiatives to increase investment in equities will be effective in increasing investment into AIM companies, and whether there are additional initiatives that the LSE should consider to enhance liquidity in the trading of AIM securities (such as changes to the AIM Rules).

More generally, responses are also welcomed on whether there are features of other international growth markets that the LSE should consider to improve AIM's position and operation.

The role of the nominated adviser ("Nomad") for AIM-listed companies is also discussed. The Paper questions whether the Nomad's obligations could be streamlined, to avoid duplicative work with lawyers and reporting accountants and thereby reduce some of the ongoing costs for issuers. Responses are requested on matters including the key aspects of the Nomad role that continue to provide value to issuers and confidence to investors and any aspects that result in disproportionate burden for the Nomad and/or issuer that outweigh the benefit.

Development of the AIM Rules

There is also an in-depth discussion in the Paper of the possible options for reform of the AIM Rules. Ideas are welcomed regarding how the LSE can make changes to address unnecessary friction and cost, whilst maintaining those aspects that remain important for investor confidence. The key matters under consideration include:

• Changes to the requirements for admission documents, including a possible simplified admission document.
• Alternatives to the requirement for a directors' working capital statement in admission documents, including specific circumstances where no working capital statement would be required.
• More flexible rules regarding reverse takeovers and the current requirement to publish an admission document if there is a fundamental change of business.
• Introducing greater flexibility to recognise a wider set of local accounting standards than those already permitted under AIM Rule 19.
• Reducing the workload of Nomads for admissions via the AIM Designated Market route.
• Introducing exemptions to the existing related party transactions requirements under AIM Rule 13.
• Permitting the admission of dual-class share structures on AIM (replicating the structures permitted on the Main Market).