Developments in the London listing markets: Shaping the Future of AIM – LSE Discussion Paper April 20258 May 2025

1. AIM admission documents – the LSE notes the increasing costs associated with producing an admission document and is seeking feedback from investors as to which areas of the current admission document are not used in making their investment decisions. It also suggests that it may consider offering an alternative simplified admission document (whilst also retaining the option of the current admission document) which would note the increased level of risk for investors associated with a less detailed admission document. Finally, the LSE suggests that there are areas where information could be included by reference where this information is available to the public, such as a company’s articles of association;
2. Working capital statements – following the Primary Markets Effectiveness Review, companies on the Main Market no longer require ‘clean’ working capital statements. The LSE sees the benefit of replicating this regime for AIM companies to lessen the working capital requirement burden, however it notes, and seeks view on, alternative methods, such as the AIM Designated Market route, which allows directors to confirm they have “no reason to believe” that the company’s working capital will be insufficient for at least 12 months from the date of admission;
3. Reverse takeovers – currently, there is a requirement to produce an AIM admission document where a reverse takeover under AIM Rule 14 occurs. The LSE is requesting feedback as to whether requiring such a document is necessary in all circumstances, such as when there would be no material change to the nature of the business following the reverse takeover. The LSE suggests that in such circumstances it may be appropriate to only rely on a disclosure of information required in Schedule 4 of the AIM Rules;
4. Accepted accounting standards – as AIM is an international market, the LSE is considering whether greater flexibility should be introduced to recognise a wider set of local accounting standards than those currently permitted under AIM Rule 19;
5. Admission requirements for second lines of securities – the LSE is considering removing the requirement to produce an admission document in these circumstances due to information already being available in the market or through other disclosure (e.g. a shareholder circular);
6. AIM Designated Market Route – the LSE is seeking views on changes that might make this route less burdensome for Nomads as in many cases this is currently equivalent to a standard AIM admission. It also seeks views on developing the process (e.g. by extending the list of eligible markets, changing the market capitalisation test and eligibility time periods);
7. Dual-class share structures – the LSE is of the view that dual-class share structures align with the founder-led nature of growth companies, and so considers it appropriate to permit the admission of dual-class shares on AIM, replicating the change made to the Main Market in 2021;
8. Related party transactions – in respect of related party transactions, the LSE is considering whether AIM Rule 13 could be disapplied where (i) there are other safeguards for shareholders such as in the case of an employee share scheme; and (ii) in the case of director’s remuneration, which is often dealt with by the company’s remuneration committee; and
9. Application of class tests – given the recent changes to the Listing Rules whereby the threshold for a substantial transaction on the Main Market is now 25%, the LSE is considering applying this same threshold to AIM companies. The LSE is also considering whether to remove the profits test from the class tests, save in relation to related party transactions, and to introduce a pro-rated gross capital test where a company is only acquiring a minority stake.

Next steps

The LSE has indicated that it will consider the feedback received from the consultation and engage with the market. Any proposed changes to the AIM Rules will be put forward for market consultation.

Conclusion