City leaders sound the alarm: Immediate action required to prevent AIM junior stock market from vanishing
Save London's Junior Stock Market: Urgent Reforms Proposed To Avert Crisis
London's junior stock market, the Alternative Investment Market (AIM), is in dire straits, and senior city figures and top investors have rallied to propose a wish-list of radical reforms to save it from extinction.
In a letter spearheaded by top investors like Octopus, BGF, and Liontrust, they've argued for a series of changes to boost the market and improve its performance. These measures include:
1. Tax Breaks for Investors: Improving tax breaks for AIM investors could help firms raise new capital by enticing more investments. This tactic has proven successful in other markets and could breathe new life into AIM.
2. Cash ISA Rules Changes:Altering the cash ISA rules to include UK equities could boost investment in AIM companies, resulting in a more robust market.
3. Rebranding AIM: A staggering 3 percentage points of the London Stock Exchange Group's (LSEG) revenue last year came from cash markets, which includes AIM. The letter urges the LSEG to rebrand AIM to promote its significance for economic growth and job creation.
A fund manager shared their sentiments, stating, "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."
Some critics argue the LSEG has thrived in the data sector but overlooked the growth of cash markets. Others have more ambitious plans, such as a proposal to relaunch AIM as a global exchange, led by former fintech boss Jon Prideaux.
The letter was sent to Emma Reynolds, Economic Secretary to the Treasury, and Varun Chandra, No 10's business adviser, following a meeting with senior city figures to discuss AIM's performance.
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The call to reform AIM comes at a critical juncture, celebrating its 30th anniversary in June 2021. Last year, just 679 firms were listed—the fewest since 2001. In 2007, a whopping 1,694 firms were listed.
- Urgent reforms are proposed to save London's junior stock market, the Alternative Investment Market (AIM), from extinction, as it faces an existential crisis.
- Top investors like Octopus, BGF, and Liontrust have argued for tax breaks for AIM investors to help firms raise new capital, emulating successful tactics from other markets.
- Changing cash ISA rules to include UK equities could boost investment in AIM companies, contributing to a more robust market.
- The London Stock Exchange Group (LSEG) is urged to rebrand AIM to promote its significance for economic growth and job creation, as AIM currently accounts for only 3 percentage points of LSEG's revenue.
- Personal-finance experts emphasize the importance of AIM for economic growth, highlighting that the market's survival is crucial if it is to continue creating jobs.
- Some critics argue that the LSEG has overlooked the growth of cash markets, while others propose more ambitious plans, such as relaunching AIM as a global exchange under the leadership of former fintech boss Jon Prideaux.
