Briefing Note: Key Takeaways from the London Stock Exchange’s Discussion Paper Feedback Statement on Shaping the Future of AIM

The LSE is proposing to review a number of the AIM Rules for Companies and the AIM Rules for Nominated Advisers, with a consultation on these rule changes expected in H1 2026. In the meantime, the AIM team has confirmed a series of immediate adjustments to the AIM Rules whereby it will consider derogation requests and make changes to current guidance to support the following changes:

Competitiveness of director remuneration and supporting founder-led companies:

• Nominated advisers will not be required to provide a "fair and reasonable" view on directors' remuneration provided they are satisfied that there are reasonable protections in place (e.g. good leaver / bad leaver provisions).
  
  
• Dual class share structures that meet the current Main Market requirements will be acceptable for prospective AIM companies.

Transaction efficiency:

• Where there is no fundamental change of business as the result of an acquisition that exceeds 100% in any of the class tests, this may be recognised as a substantial transaction instead of a reverse takeover so no Admission Document will be required.
  
  
• Where both parties to a reverse takeover are publicly traded, reduced disclosure in Admission Documents instead of the full Schedule Two requirements.
  
  
• Not imposing automatic suspension of trading for a reverse takeover in contemplation, where it can be demonstrated that appropriate alternative disclosure can be made.
  
  
• Class test threshold for substantial transactions to be raised from 10% to 25% and the potential removal of the Profits class test and permitting a pro-rata Gross Capital class test for investing companies where the acquisition does not result in control and/or consolidation – the LSE reaffirmed that derogation to the class tests can already be requested by nominated advisers and encourages them to do so where appropriate pending redrafting of the AIM Rules.

Addressing unnecessary friction with Admission Documents:

• Permitting historical financial information to be incorporated by reference provided that information is readily available to investors and will remain so on an ongoing basis.
  
  
• Dispensing with the publication of an Admission Document for the admission of a second line of securities (i.e. new classes of shares, warrants or loan notes). For the avoidance of doubt, the LSE confirmed that, as is the case today, it does not propose to require an Admission Document in relation to fundraising activity and further issues following the introduction of the Public Offers and Admissions to Trading Regulations 2024 (the "POATRs"). Accordingly, with the introduction of POATRs, AIM companies will be able to fundraise on market and include retail investors without the need to publish an MTF prospectus. For further information on the POATRs, please see our briefing
   
• For companies seeking admission to AIM, enabling the use of (i) UK GAAP (FRC 102) for UK companies applying that standard prior to seeking admission; and (ii) other local accounting standards on a case-by-case basis where equivalency to IFRC can be explained.

 Streamlining and attracting international admissions:

• Supporting nominated advisers in streamlining work undertaken on AIM Designated Market admissions to ensure this provides a genuine fast-track route to market for international companies seeking admission to AIM.

In addition to the changes highlighted above, the LSE has also confirmed that it will be carrying out a further review in respect of the following:

• Trading halts to support secondary fundraisings: The LSE is considering introducing trading halts for secondary fundraises in order to support companies to conclude a fundraise without the concern of rumours, leaks and/or speculative trading, which can potentially cause undue price volatility. It will evaluate the approach taken in international markets and the process an AIM company and its nominated adviser would need to follow to request a trading halt.
  
  
• Nominated adviser role reset: Restoring the nominated adviser's primary function as a strategic adviser focused on corporate finance, rather than risk-averse compliance policing. The LSE is committed to engaging with firms on a new technical note in H1 2026 to help reset the expectations for the nominated adviser role.
  
  
• Admission Document redesign: The LSE will undertake a review to streamline Admission Documents, focusing on material disclosures, use of digital solutions, and removal of redundant or disproportionately burdensome requirements (e.g. the working capital statement).
  
  
• Secondary market trading enhancements: The LSE is considering how to support and facilitate market participants accessing and engaging with its trading systems in ways that suit them and how its digital capabilities might be leveraged to support innovation in its trading technology offering in future. The LSE has stated that it would welcome proposals and ideas from market participants.
  
  
• AIM Rule 11: The LSE will consider how to address feedback that the obligations under AIM Rule 11 are duplicative of the UK MAR disclosure regime while also ensuring that nominated advisers remain involved with respect to disclosure.

The LSE has also set out details of its ongoing engagement with the FCA, FRC, QCA and others to further benefit market users.

• Audit fees: Engagement with the FRC in support of more proportionate audit requirements for AIM companies and market participants are encouraged to continue to positively engage with the FRC. The FRC has reconfirmed that only AIM companies which are operating as banks, credit institutions or insurance undertakings fall within the definition of PIE.
  
  
• Proxy advisers: Following considerable feedback criticising the role and influence of proxy advisers, the LSE will be engaging with nominated advisers to understand the feedback they receive from their AIM clients on whether the proxy advisers are abiding by the FRC's new reporting expectations for proxy advisers set out in the UK Stewardship Code. The LSE intends to share these experiences with the FRC and will also be considering how to provide a voluntary disclosure framework for AIM companies to disclose the engagement that they have had with proxy advisers
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• Availability of capital: The LSE will continue to work closely with government and industry to ensure sufficient capital flow into AIM companies and for an increased pension fund allocation to AIM companies.
  
  
• Fiscal incentives: Engagement with government and regulators and through the convening of the Capital Markets Industry Taskforce to seek greater certainty and extension of fiscal incentives (e.g. BPR, EIS/VCTs and ISAs).
  
  
• Corporate governance: Engagement with the QCA to consider whether the current approach to corporate governance for AIM is achieving the correct balance in supporting investors understanding of a company’s arrangements but without requiring a company to overly focus on ‘compliance for the sake of compliance’ with a particular code. The LSE has confirmed that the approach to director remuneration will be taken into account as part of its consideration of the corporate governance approach on AIM.
  
  
• Bulletin board users: The LSE has been discussing with the FCA its concerns in respect of the conduct of certain platforms, social media influencers and bulletin board users with potential cases that potentially give rise to market abuse issues and encourages any such concerns to be reported to the FCA. It will also make referrals to relevant enforcement agencies and encourages companies to do the same where companies or directors are subject to public abuse.

• Expect a more proportionate regulatory environment, with immediate reliefs available and longer-term reforms expected.
  
  
• Engage proactively with nominated advisers regarding relevant derogations from the AIM Rules where appropriate.
  
  
• A reset of market practice where processes had become unnecessarily burdensome.
  
  
• Monitor developments on capital access and incentives. These changes will shape both the cost and attractiveness of remaining quoted.
  
  
• Prepare to participate in upcoming consultations and provide feedback, ensuring company voices are reflected in the final drafting of rulebook changes.

The LSE’s reforms represent real progress toward restoring AIM’s competitiveness and relevance as the UK’s premier growth market. Boards should capitalise on immediate regulatory flexibilities, align strategy with the evolving market and governance landscape, and participate in further consultations to shape AIM’s future.