What Is The FTSE AIM?

The FTSE AIM (Alternative Investment Market) is a sub-market of the London Stock Exchange (LSE) designed for smaller, less-developed companies, or those seeking a more flexible governance approach. It offers a lighter-touch regulatory system compared to the main market, making it easier for these businesses to list their shares.

The AIM has also attracted international attention, particularly due to its less stringent regulations. This is especially true when compared to the US’s Sarbanes-Oxley Act, which some argue imposes a heavy compliance burden. AIM has over 270 foreign companies which have capitalised on this opportunity and joined.

History

The Alternative Investment Market (AIM) launched in June 1995. It replaced the earlier Unlisted Securities Market (USM), which had been around since 1980.

FTSE AIM Indices

The FTSE Group, better known as FTSE Russell, maintains three indices for measuring the AIM: the FTSE AIM UK 50 Index, tracking the top 50 companies; the FTSE AIM 100 Index, tracking the top 100 companies; and the FTSE AIM All-Share Index, which tracks the overall market.

FTSE AIM Biggest Companies

Here are some examples of the leading companies listed on the FTSE AIM:

• JET2 plc: A British multinational low-cost airline company.
• YouGov plc: A British international Internet-based market research and data analytics firm.
• GlobData plc: A data analytics and consulting company.
• Hutchmed: A Chinese innovative, commercial-stage, drug discovery, biopharmaceutical company.

Regulatory Model

The Alternative Investment Market (AIM) operates as a regulated venue, featuring a framework of principles-based rules for publicly traded companies. This model grants AIM-listed firms a degree of flexibility. Companies can either comply with AIM’s streamlined rulebook or provide a clear explanation for any deviations.

Unlike the main market of the London Stock Exchange (LSE), AIM is not subject to the full suite of mandatory provisions arising from EU directives (as implemented in the UK) and other regulations. This focus on self-regulation is central to AIM’s low regulatory burden. Companies seeking an AIM listing face less stringent entry requirements compared to the main market. Once listed, ongoing obligations are lighter, offering greater operational flexibility. Additionally, certain corporate governance provisions are not mandatory for AIM companies.

However, AIM isn’t entirely without regulations. There are more stringent requirements compared to private companies. For instance, all AIM-listed plcs (public limited companies) must prepare audited annual accounts in accordance with International Financial Reporting Standards (IFRS). While AIM-listed companies do benefit from some flexibility in corporate governance, they are still subject to the requirements of their home jurisdiction, which can vary in detail. This ensures a baseline level of accountability for investors.