Alternative Investment Market

Last updated

Alternative Investment Market (AIM) Logo.png
Type Stock exchange
LocationLondon, United Kingdom
Founded19 June 1995
Owner London Stock Exchange Group
Key people Marcus Stuttard Head of UK Primary Markets and AIM [1]
Currency GBP, US$
No. of listings821 [2]
Website AIM homepage on London Stock Exchange website

AIM (formerly the Alternative Investment Market) is a sub-market of the London Stock Exchange that was launched on 19 June 1995 as a replacement to the previous Unlisted Securities Market (USM) that had been in operation since 1980. It allows companies that are smaller, less-developed, or want/need a more flexible approach to governance to float shares with a more flexible regulatory system than is applicable on the main market.


At launch, AIM comprised only 10 companies valued collectively at £82.2 million. As at May 2021, 821 companies comprise the sub-market, with an average market cap of £80 million per listing. [2] AIM has also started to become an international exchange, often due to its low regulatory burden, especially in relation to the US Sarbanes–Oxley Act (though only a quarter of AIM-listed companies would qualify to be listed on a US stock exchange even prior to passage of the Sarbanes–Oxley Act). [3] By December 2005, over 270 foreign companies had been admitted to AIM.

The FTSE Group maintains three indices for measuring AIM, which are the FTSE AIM UK 50 Index, FTSE AIM 100 Index, and FTSE AIM All-Share Index.

Regulatory model

AIM is an exchange regulated venue featuring an array of principles-based rules for publicly held companies. AIM's regulatory model is based on a comply-or-explain option that lets companies that are floated on AIM either comply with AIM's relatively few rules, or explain why it has decided not to comply with them.

Nominated Advisers (Nomads)

Aside from granting leeway in regard to regulatory compliance, the Exchange also mandates continuous oversight and advice by the issuer's underwriter, referred to as a Nominated Adviser (Nomad). The role of Nomads is central to AIM's regulatory model, as these entities play the role of gatekeepers, advisers and regulators of AIM companies. In advising each firm as to which rules should be complied with and the manner in which existing requirements should be met, Nomads provide the essential service of allowing firms to abide by tailor-made regulation, reducing regulatory costs in the process. Theoretically, Nomads are liable for damages from tolerating misdemeanors on behalf of their supervised companies, including the loss of reputational capital. However, this heavy reliance on Nomads has been criticised as creating a conflict of interest, since Nomads receive fees from the companies they purportedly supervise while, in practice, managing to avoid liability for market misconduct.

In 2006, the London Stock Exchange launched a review of Nomad activities, resulting in a regulatory "handbook" for Nomads published by the Financial Services Authority in 2007. [4] [5]


Because AIM is an unregulated market segment, it escapes most of the mandatory provisions contained in European Union directives – as implemented in the UK – and other rules applicable to companies listed in the LSE. AIM believes self-regulation is pivotal to AIM's low regulatory burden: companies seeking an AIM listing are not subject to significant admission requirements; after admission is granted, firms must comply with ongoing obligations which are comparatively lower to the ones that govern the operation of larger exchanges; and certain corporate governance provisions are not mandatory for AIM companies. Therefore, AIM-listed companies are often subject to manipulation by institutional investors. AIM-listed companies usually are only required to adhere to the corporate governance requirements of their home jurisdiction, which, as a practical matter, vary widely. [5]

However, the regulatory requirements are more onerous than for private companies and AIM listed plcs are required to prepare audited annual accounts under IFRS. [6]

Investor base

Another important element of AIM's model is the composition of its investor base. Although AIM-listed companies are not start-ups, most are small and potentially more risky than a FTSE listing. This may prove to be hazardous for unsophisticated investors who lack both the knowledge and resources to conduct proper inquiries into a firm's prospects and activities, or even larger investors which lack strong internal control and risk management requirements. As a consequence, AIM's investor base is largely composed of institutional investors and wealthy individuals. [5]

Market capitalisation

The following table lists the 10 biggest AIM companies on 1 October 2018. [2]

RankCompanyMarket Cap (GBP)
1 ASOS 4.896 billion
2 4.035 billion
3 Abcam 3.211 billion
4Hutchmed (China) Ltd3.060 billion
5 Fevertree Drinks 2.977 billion
6 Jet2 2.897 billion
7 RWS Holdings 2.487 billion
8ITM Power2.166 billion
9Ceres Power Holdings2.070 billion
10Keywords Studios1.967 billion


The following table lists the top 100 AIM companies by market capitalisation on 25 April 2020. [7]

AB Dynamics plcABDP
Abcam plcABC
Advanced Medical Solutions Group plcAMS
Alliance Pharma PlcAPH
Alpha Financial Markets Consulting PlcAFM
Alpha FX Group plcAFX
Andrews Sykes Group plcASY
Applegreen plcAPGN
Atalaya Mining plcATYM
Benchmark Holdings plcBMK
Blue Prism plcPRSM
Boohoo Group plcBOO
Breedon Group plcBREE
Brooks Macdonald GroupBRK
Burford Capital LtdBUR
Bushveld Minerals LtdBMN
Caretech Holdings plcCTH
Central Asia MetalsCAML
Ceres Power HoldingsCWR
Clinigen Group plcCLIN
Codemasters Group Holdings LimitedCDM
Cohort plcCHRT
Craneware plcCRW
Creo Medical Group PlcCREO
CVS Group plcCVSG
Dart Group plcDTG
Diversified Gas & Oil PlcDGOC
dotDigital Group plcDOTD
Draper Esprit plcGROW
Eddie Stobart Logistics plcESL
Emis Group PlcEMIS
Fevertree Drinks plcFEVR
Focusrite plcTUNE
Frontier Developments plcFDEV
Gamma Communications LtdGAMA
Gateley Holdings plcGTLY
GB Group plcGBG
GlobalData plcDATA
Gooch & HousegoGHH
Greencoat Renewables plcGRP
Highland Gold MiningHGM
Horizon Discovery Group plcHZD
Hotel Chocolat Group plc HOTC
Hurricane Energy plcHUR
Hutchison China MeditechHCM
Ideagen PlcIDEA
IG Design Group plcIGR
IMImobile plcIMO
Impax Asset Management Group PlcIPX
Iomart GroupIOM
ITM Power plcITM
Jadestone Energy IncJSE
James Halstead plcJHD
Johnson Service Group plcJSG
Judges Scientific plcJDG
Kape Technologies PlcKAPE
Keywords Studios plcKWS
Knights Group HldgsKGH
Learning Technologies Group plcLTG
Loungers plcLGRS
M P Evans Group PlcMPE
Marlowe plcMRL
Mattioli Woods PlcMTW
Midwich Group plcMIDW
Mortgage Advice Bureau (Holdings) LtdMAB1
Next Fifteen Communications GroupNFC
Nichols plcNICL
Numis CorporationNUM
Pan African Resources plcPAF
Pebble Group plcPEBB
Polar Capital Holdings PlcPOLR
Premier Miton Group plcPMI
PurpleBricks Group plcPURP
Randall & Quilter Investment Holdings LtdRQIH
Renew Holdings PlcRNWH
Restore PlcRST
RWS Holdings plcRWS
Scapa Group plcSCPA
Secure Income REIT plcSIR
Serica Energy PlcSQZ
Silence Therapeutics plcSLN
Smart Metering Systems plcSMS
Strix Group plcKETL
Sumo GroupSUMO
Team17 Group PlcTM17
Telit Communications PlcTCM
Thorpe (F.W) plcTFW
Tracsis plc TRCS
Tremor International LtdTRMR
Uniphar plcUPR
Victoria plcVCP
Wandisco plcWAND
Warehouse REIT plcWHR
Watkin Jones plcWJG
YouGov PlcYOU
Young & Co's Brewery PlcYNGA
Young & Co's Brewery PlcYNGN


"Casino" environment

In March 2007, U.S. securities regulator Roel Campos suggested that AIM's rules for share trading have created a market like a "casino". Campos reportedly said: "I'm concerned that 30% of issuers that list on AIM are gone in a year. That feels like a casino to me and I believe that investors will treat it as such." [8] The comment resulted in several angry retorts, including one from the London Stock Exchange, which controls AIM, pointing out that the number of companies that go into liquidation or administration in a year is actually fewer than 2%. [8]

AIM has since issued new rules requiring that listed companies maintain a website. [9]

The calibre of participants in the market has also been criticised by fund manager John Hempton of Bronte Capital Management. [10]

Langbar International fraud

AIM was criticised for allowing Langbar International to be listed. [11] [12] [13] This £375 million ($750m) share fraud was investigated by the Serious Fraud Office [14] [15] [16] [17] [18] [19] and the City of London Police when it was discovered in November 2005 that Langbar had none of the assets it declared at listing. This was due in part because the Nomad (Nominated Adviser) failed to carry out due diligence. Also, the Exchange did not ensure that the AIM rules had been complied with. AIM changed the rules for Nomads in 2006. [20] [21] [22] On 19 October 2007 they fined Nabarro Wells £250,000 ($512,500) [23] and publicly censured them for breaches of the AIM rules. [24] [25]

In March 2007 The Daily Telegraph noticed a tendency to use listing vehicles incorporated in offshore financial centres prior to floating on AIM. Some 35% of the companies floated on AIM during 2006 were from OFCs, of which the majority came from the Channel Islands or the British Virgin Islands. [26]

On 29 January 2009 it was announced that AIM is to form the basis of an Asian-orientated growth or incubator market called 'Tokyo AIM', which will be run as a joint venture between the Tokyo Stock Exchange and LSE. Tokyo AIM will replicate AIM's system of oversight by NOMADs, with 'J-Nomads' being "selected and approved by TOKYO AIM ... to assess companies' suitability for the market". [27] In July 2012, TOKYO AIM changed its name to TOKYO PRO Market, and since then Tokyo Stock Exchange, Inc. has continued to operate TOKYO AIM based on the original market concept. [28]


As of 1 October 2018, just under a third of AIM-listed companies have paid shareholders a dividend within their most recent financial year. The largest companies to have paid dividends include: Fevertree Drinks PLC (FEVR), Burford Capital Ltd (BUR), and Abcam PLC (ABC). The smallest companies to have paid dividends include: Holders Technology PLC (HDT), Aeorema Communications PLC (AEO), and Stilo International (STL). [29]

See also

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