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Developments in the London equity capital markets: Feedback on shaping the future of AIM and new virtual shareholder meeting guidance 20 March 2026

With the continuing drive to increase the UK’s competitiveness and modernise our governance frameworks, in this second article, we focus on the plans for the future development of AIM, as set out in the London Stock Exchange’s (“LSE”) recent Discussion Paper Feedback Statement: Shaping the Future of AIM, and the new best practice guidance published by the GC100 in relation to virtual shareholder meetings.

Our previous articles in relation to developments in the London equity capital markets can be found here.

"The LSE’s November 2025 AIM Discussion Paper Feedback Statement marks the most significant recalibration of the Alternative Investment Market in over a decade."

Shaping the future of Aim – Key takeaways from the LSE feedback statement

The LSE’s November 2025 AIM Discussion Paper Feedback Statement marks the most significant recalibration of the Alternative Investment Market (“AIM”) in over a decade. Following the April 2025 Discussion Paper (see our article on the initial Discussion Paper here), the LSE received more than 60 formal responses and held extensive roundtables with companies, investors, nominated advisors (“Nomads”) and trade bodies. The resulting Feedback Statement confirmed strong market sentiment for AIM’s continuing role as the UK’s main public growth market and for reestablishing its distinction from both private capital markets and the Main Market of the LSE, as well as setting out a clear roadmap for reform.

The LSE has already begun implementing immediate changes by confirming it will consider derogation requests in certain cases and will update guidance where necessary, with a rulebook rewrite expected in 2026. This article examines the key proposals and their implications, focusing on the key rule changes and their immediate effects, as well as touching upon external factors that will be influential to the future of AIM.

Reaffirming AIM’s purpose

Respondents overwhelmingly endorsed AIM’s continued positioning as a market for innovative, founder‑led and scaling businesses. A recurring theme was the need to re-emphasise AIM’s distinction from the Main Market, particularly by reaffirming its purpose as a market that supports access to growth capital and one that includes a diverse range of companies (across sizes, sectors and jurisdictions) at different stages of development. Central to this recalibration, respondents emphasised, is the reaffirmation of AIM’s ‘buyer beware’ ethos by ensuring investors understand the higher‑risk, higher‑reward nature of AIM companies. The Feedback Statement also highlights the need to reset expectations of the Nomad role, shifting it back toward the corporate finance advisory role as opposed to the quasi‑regulatory compliance function it currently serves in some aspects.

In order to bring about these changes, the LSE outlined multiple proposed rule changes, whilst also noting that certain structural changes for AIM are not within its powers and will require active engagement and cooperation with the government and regulators, such as the Financial Conduct Authority and the Financial Reporting Council (“FRC”).

Key rule changes and immediate impacts

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"The LSE has confirmed that DCSSs will now be acceptable for AIM admissions where they meet Main Market standards."

  1. Admission documents – the LSE has recognised that admission documents are overly broad in nature and not sufficiently tailored to the needs of venture type companies. It therefore intends to pursue a modernised, investor‑focussed admission document framework by digitising and reshaping the admission document to focus on the information investors actually value and permitting information to be incorporated by reference. An example provided by the LSE was that respondents supported dispensing with the requirement to include a working capital statement (which we consider further below under paragraph 6).
  2. Dual class share structures (“DCSSs”) – the LSE has confirmed that DCSSs will now be acceptable for AIM admissions where they meet Main Market standards (with equivalency where appropriate). This represents a major shift in AIM’s approach to supporting founder-led companies and has the potential to strengthen AIM’s competitiveness against, for instance, US exchanges and private markets.
  3. Reverse takeovers (“RTOs”) and M&A flexibility – the Feedback Statement introduces a more nuanced approach to RTOs, addressing long-standing concerns about cost, timing and automatic suspensions. Key developments include:
    i. certain acquisitions may now be treated as substantial transactions rather than RTOs where there is no fundamental change of business and, pending rule changes, shareholder approval may be required for such a substantial transaction;
    ii. alternative disclosure may be permitted for RTOs involving two publicly traded companies instead of the full AIM Rules Schedule 2 content requirements for an admission document; and
    iii. suspension of trading on announcement of an RTO may be avoided if appropriate alternative disclosure is provided.
  4. Application of class tests – respondents strongly supported raising the AIM Rule 12 threshold for substantial transactions from 10% to 25% and removing the Profits test (except for related‑party transactions). The LSE has indicated it will consider derogations pending formal rule changes. As a result, fewer transactions will trigger shareholder approval or extensive disclosure, affording greater agility for acquisitive companies.
  5. Related-party transactions – directors’ remuneration – a significant immediate change is the removal of the requirement for Nomads to provide a ‘fair and reasonable’ opinion on directors’ remuneration, provided reasonable protections are in place, such as good leaver/bad leaver provisions. This change reduces administrative burden for Nomads as well as supporting competitive remuneration structures which is critical for attracting and retaining talent.
  6. Working capital statements – the Feedback Statement notes that investors generally do not view the traditional working capital statement as essential and instead they tend to rely on other financial information (such as narratives of the financial resources available for a company). Respondents also noted that the cost of working capital statements often outweighs their value. The LSE is actively considering reform or removal as part of the wider admission document redesign and will consider derogation requests from Nomads for historical financial information to be incorporated by reference instead, provided it is readily available to investors.
  7. Accounting standards – the LSE will consider derogations allowing issuers to use UK GAAP (FRS 102) rather than converting historical financial information into IFRS on admission to AIM, meaning lower preparation costs for smaller companies and a more proportionate approach.
  8. Admission requirements for second lines of securities – AIM companies will no longer be required to publish an admission document when admitting a new class of securities, a change which will afford AIM companies more control over the structure of their share capital. On 19 January 2026, the AIM Rules (specifically AIM Rule 27 in respect of further admissions documents) were formally updated to reflect this. Going forward an admission document will only be required on an initial admission to AIM and on an RTO. For further details on the amendments to the AIM Rules made in connection with the coming into effect of the new Public Offers and Admissions to Trading regime (“POATR”) on 19 January 2026, see our article here.
  9. AIM Designated Market Route – the LSE is encouraging Nomads to engage early where issuers seek admission via the AIM Designated Market Route, with a view to streamlining the process for companies already listed on recognised overseas markets. It will also review the eligible markets for this route.
  10. AIM disclosure regimes – the LSE noted that respondents considered the disclosure regimes under AIM Rule 11 and the UK Market Abuse Regime to be duplicative and that it will be considering ways in which to reduce this, especially in the context of restoring the Nomad’s role as a corporate finance adviser.

"AIM companies will no longer be required to publish an admission document when admitting a new class of securities."

Broader external factors

The Feedback Statement also highlights several external factors critical to AIM’s future success. These sit largely outside the LSE’s direct control, though the LSE noted in the Feedback Statement that it is committed to continuing its engagement with government and regulators in order to advocate for changes that will promote AIM’s success. These include:

  • pension fund allocation – continued engagement with government to ensure increased capital flows into AIM companies under the Mansion House reforms;
  • tax incentives – the need for more certainty about future availability of tax incentives given strong market concern regarding changes to Business Property Relief and calls for expanded EIS/VCT thresholds. The LSE notes that tax reliefs recognise the distinct role that growth markets such as AIM play through the provision of risk capital to support the ongoing scaling and transition of companies from private to public on AIM;
  • audit proportionality – ongoing work with the FRC to ensure AIM audits are proportionate and cost‑effective; and
  • retail investor access – the POATR is expected to improve retail participation in AIM IPOs and subsequent fundraisings. An increase in retail investment should increase liquidity.

These factors, alongside the rule changes, will play a central role in determining AIM’s competitiveness and ability to attract and maintain investment, as well as encouraging more companies to participate in the market.

Next steps

"The LSE intends to consult on specific changes to the AIM Rules in the first half of 2026."

The LSE intends to consult on specific changes to the AIM Rules in the first half of 2026. It also intends to engage with firms on a new technical guidance for Nomads with the aim of striking a balance between adding value for AIM companies and safeguarding the protections afforded by Nomads and their obligation to maintain the reputation and integrity of the market. Proposals to digitise and re-evaluate the admission document may, however, take longer.

Commentary

The Feedback Statement signals a decisive shift towards a more agile, proportionate and founder‑friendly AIM. The combination of immediately available derogations and the forthcoming rulebook reform is designed to:

  • streamline the admission process;
  • support founder-led companies through allowing DCSSs;
  • reduce friction for M&A and strategic transactions, director remuneration and accounting requirements; and
  • enhance AIM’s attractiveness relative to private markets and other international exchanges.

If implemented as proposed, these reforms could mark the beginning of AIM’s next growth phase, reasserting its role as a leading growth market, and enabling it to continue to adapt and evolve to support the next generation of growth companies.

GC100 best practice guidance for virtual shareholder meetings 

On 8 December 2025, the GC100 (the association for the general counsel and company secretaries of companies in the UK FTSE 100) published guidance for UK listed companies that want to hold fully virtual annual general meetings (“AGMs”) with no physical location. This seeks to balance the ability to take advantage of advances in technology with the continued right for shareholders to question and hold the board of directors to account.

The guidance was published in light of the government’s confirmed commitment to amend the Companies Act 2006 to clarify that virtual shareholder meetings are permitted and the fact that some companies already hold fully virtual meetings as their articles of association permit them to do so.

Overview of the guidance

The guidance was written specifically for AGMs but covers all types of shareholder meetings. There are eight key provisions companies should consider:

"A virtual format should not be used to limit attendance or shareholders’ ability to engage with the board as regards the business of the meeting."

  • a company should promote engagement, dialogue and transparency at virtual meetings and a virtual format should not be used to limit attendance or shareholders’ ability to engage with the board as regards the business of the meeting;
  • a company should have a dedicated area on their website or virtual meeting platform so that shareholders can access information about the meeting. This information should be kept up to date;
  • the notice of meeting should include: details required to access the virtual meeting (if registration and verification are required), instructions on how to log in, ask questions and vote electronically and a link to the area of the company website or virtual meeting platform containing the latest information;
  • any documents that are required to be displayed during the meeting should be made available on the company website area or virtual meeting platform;
  • directors should be able to be seen and heard by shareholders when they are being asked a question or are responding to a question. It is best practice for the chair to be seen and heard throughout the meeting;
  • shareholders should be permitted to submit questions during the virtual meeting via telephone or Voice over Internet Protocol, in addition to any typed questions submitted through a chat or Q&A function. This is subject to the chair’s authority to manage these communication channels to maintain the orderly conduct of the meeting;
  • the chair should confirm how shareholder questions will be addressed at the beginning of the meeting. If the chair decides that they will group or moderate questions, this should be made clear before or during the meeting. If a shareholder’s question is grouped they should be able to raise a further question if the answer has not properly addressed their individual question. This is subject to the chair reserving the right to manage questions to ensure orderly conduct of the meeting; and
  • shareholders should be able to see or hear the questions put to the chair at the meeting (whether typed via a chat or Q&A function or repeated by the chair or otherwise) and the responses. Where practicable, the name of the shareholder asking the question should be made known to the shareholders attending the meeting.

The guidance also contains some suggested wording to include in meeting notices where a company proposes to amend its articles of association (or adopt new ones) to permit virtual meetings.

"This guidance is useful for companies to refer to when planning their next AGMs and considering how best to try and maximise shareholder engagement if they decide to hold shareholder meetings virtually."

Commentary

AGMs continue to be an important aspect of corporate governance, and this guidance is useful for companies to refer to when planning their next AGMs and considering how best to try and maximise shareholder engagement if they decide to hold shareholder meetings virtually. The GC100 intends to review the guidance as market practice evolves and to take account of relevant legal and technological developments. It will be interesting to see how practice develops and whether more companies decide to hold fully virtual AGMs.

Conclusion

These two developments are just one part of a number of measures aimed at reinvigorating the UK’s equity capital markets and modernising our governance framework to make the UK a more attractive and dynamic place to invest and do business. In that regard they are welcome, and we will be following their progress closely.

London Trainees Morgan Biggins and Sara Domi also contributed to this article.

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