Urgent change is needed to save AIM, junior stock market from extinction, warn City bosses

By MAGGIE PAGANO

Updated: 22:01 BST, 8 May 2025

Senior City figures have written to the Treasury with a wish-list of urgent and radical reforms to save London’s junior stock market from extinction.

The letter argues ministers should improve tax breaks for investors to spur firms on the Alternative Investment Market (AIM) to raise new capital.

Another idea recommends changes to cash ISA rules, which provide tax relief for savers, to include UK equities in a bid to boost investment in AIM companies.

And they urge the London Stock Exchange Group (LSEG), which owns AIM, to change the name in a rebrand that promotes a market that is essential for economic growth and job creation.

A fund manager said: ‘AIM faces an existential crisis. Urgent change is needed if the market – so important for economic growth – is to survive. It’s do or die.’

The letter has been co-ordinated by top investors including Octopus, BGF and Liontrust. 

Crisis point: Senior City figures have written to the Treasury with a wish-list of reforms which they claim are essential to save London’s junior stock market

Many recommendations are based on a recent paper by Simon Brickles, former AIM chief, who argues for a wholesale review, a change of leadership and Government tax breaks so that it recaptures its stature as a hub where young, dynamic companies can flourish.

Critics say the LSEG has expanded successfully into the data business, but has been less concerned about the growth of its cash markets, which contributed just 3pc of revenue last year.

The call to reform AIM comes at a critical time for the market which celebrates its 30th anniversary in June. Last year there were 679 firms listed, the fewest since 2001. In 2007, 1,694 were listed.

The letter has been sent to Emma Reynolds, Economic Secretary to the Treasury, and Varun Chandra, No 10’s business adviser. 

It follows a meeting last month with senior figures in the City to discuss how to improve AIM’s performance.

Other critics have more audacious plans. One group, led by former fintech boss Jon Prideaux, wants to relaunch it as a global exchange.

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Urgent change is needed to save AIM, junior stock market from extinction, warn City bosses

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