Key takeaways
Simpler AIM admissions
Reduced disclosure requirements should lower admission complexity and costs.
Express Market route introduced
Eligible issuers benefit from a simplified AIM admission process.
More proportionate transaction regime
Higher thresholds reduce regulatory requirements for significant transactions.
We recently considered the London Stock Exchange's proposed reforms to the AIM Rules and AIM Rules for Nominated Advisers. The final rules have now come into force and represent a substantial update to the AIM framework, with reforms designed to simplify admissions, provide greater flexibility for capital raisings and modernise aspects of the AIM regime.
While the final rules largely reflect the June consultation proposals, they contain several important clarifications and refinements that provide greater clarity on how the new framework will operate in practice.
Key changes now in effect
1. Working capital statement requirement removed
One of the most notable reforms is the removal of the requirement for a formal working capital statement from an AIM admission document. Instead, applicants will be required to disclose information regarding their capital resources, expected financial commitments and any anticipated need for additional funding over the 12 months following admission. While this is expected to reduce some of the cost and complexity associated with admission, the London Stock Exchange (the Exchange) has emphasised that directors remain responsible for assessing a company's financial position.
2. UK GAAP joins the list of accepted accounting frameworks
UK GAAP is now an accepted accounting standard for AIM companies. For some UK businesses, this may remove the need to convert accounts to IFRS as part of the admission process, reducing both cost and administrative burden. The Exchange also confirmed that nominated advisers may continue to engage with AIM Regulation regarding the acceptability of other local accounting standards on a case-by-case basis.
3. The Express Market route retained, with amendments
The proposed Express Market route, designed to provide a streamlined admission process for companies that are already admitted to certain qualifying markets, has been retained, although in a modified form.
While the concept was overwhelmingly supported, the Exchange concluded that the original proposal required adjustment to align with the FCA framework established under the Public Offers and Admissions to Trading Regulations 2024.
As a result, companies already admitted to qualifying specified markets will generally not need to produce an AIM admission document, reflecting that they will already have an established trading record and be subject to the regulatory requirements of another market. However, certain applicants will instead be required to prepare a simplified admission document containing limited prescribed information.
The Exchange also relaxed one aspect of the eligibility criteria, reducing the required period of admission to the relevant market from four years to three years following consultation feedback.
4. Dual class share structures permitted
A further key change is the express recognition of dual class share structures, providing greater flexibility for founder-led businesses. Applicants may now be admitted to AIM with special voting shares that give certain shareholders enhanced voting rights, enabling founders and other key stakeholders to retain a greater degree of control following admission.
The new rules include a number of safeguards for investors. Special voting shares may only be held by specified persons, their enhanced voting rights cannot be transferred outside that group and they cannot be exercised on matters relating to director remuneration, related party transactions involving the holder or the cancellation of admission to AIM.
The rules do not require the enhanced voting rights to fall away after a specified period. However, special voting shares cannot be issued after admission and the rights attached to existing special voting shares cannot be extended, although those rights may be reduced or removed following advance consultation with the Exchange.
5. Changes to substantial transactions and fundamental changes
The new rules also introduce changes to the substantial transaction and fundamental change of business regime (AIM Rules 12 and 14), intended to create a more proportionate transaction framework.
The Exchange has confirmed that a transaction exceeding 100% under the class tests will not automatically require shareholder approval. An acquisition will be a reverse takeover if there is a fundamental change in the company’s business, board or voting control.
The threshold for substantial transactions has been increased from 10% to 25%, aligning AIM with the Main Market.
References to class test thresholds have been moved from AIM Rule 14 into guidance, reinforcing that the assessment of a fundamental change of business depends on the particular facts and circumstances rather than a purely numerical test.
6. Incorporation by reference becomes available
Companies may now incorporate information into admission documents by reference to other publicly available documents, rather than reproducing it in full.
The Exchange has deliberately avoided prescribing an exhaustive list of information that may be incorporated. Instead, companies and their nominated advisers will be able to take a practical, principles-based approach. For many issuers, this should help streamline admission documents and reduce duplication of information already available to investors.
7. Capital Access Windows introduced
Capital Access Windows have been introduced, where an AIM company may request a temporary suspension of trading while undertaking an equity fundraising. The Exchange has confirmed that there will be no prescribed minimum or maximum duration, with applications being considered on a case-by-case basis through the company's nominated adviser. This measure could prove particularly valuable in enabling companies to engage with a broader range of investors, including retail participants, within a more controlled environment.
8. Corporate governance reforms
The reforms retain the move away from the existing ‘comply or explain’ model, giving AIM companies greater flexibility to adopt governance arrangements that are appropriate to their size and stage of development. One important change from the June proposals is a clarification that companies are required to explain generally how remuneration and incentives are structured, rather than providing disclosure of the detailed terms of remuneration arrangements.
9. Changes affecting nominated advisers
Alongside the issuer-focused reforms, amendments to the AIM Rules for Nominated Advisers continue the shift towards a more principles-based framework and reinforce the role of Nominated Advisers as corporate finance advisers.
The Exchange also reiterated that although the formal working capital statement requirement has been removed, nominated advisers continue to have an important role in assessing an applicant's capital resources and readiness for admission.
Looking ahead
Although few of the reforms will come as a surprise to those who followed the consultation process, the final rules provide greater clarity in a number of areas, including the Express Market route, corporate governance disclosures, fundamental changes of business and the continuing role of nominated advisers.
The reforms are intended to reduce complexity and increase flexibility for AIM companies and applicants, while maintaining the principles-based approach that has long been a feature of the market. The focus will now shift to implementation as issuers, advisers and investors assess how the new regime operates in practice.
Find out more about our ECM team here or contact us if you would like to discuss the impact of the new AIM Rules on your company or a proposed transaction.
