Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

UK Public Markets Monitor – Q2 2025

Skadden Publication

Danny Tricot Simon Toms Craig Kelly Justin Lau Alex Rigby Kathryn Gamble Robert Greene Uswah Naseem

Below is our quarterly briefing covering the most important developments for UK PLCs, UK equity capital markets and UK public M&A.

In this issue, we review:

AIM Consultation Paper

7 April 2025 / LSE

The London Stock Exchange (LSE) initiated a significant consultation on the Alternative Investment Market (AIM). The discussion paper sought feedback from market participants on a range of proposed reforms designed to enhance market liquidity, broaden investor participation and improve operational efficiency for both new and existing AIM companies. The consultation closed on 16 June 2025.

The discussion paper outlines several specific proposals for reforming the AIM Rules:

Admission documents. The LSE is consulting on simplifying the AIM admission document, seeking investor input on which sections are most valuable for investment decisions. The LSE is also considering replicating the Main Market’s rules that allow for qualified working capital statements or removing the requirement for a working capital statement altogether.

Dual-class share structures. The LSE is seeking views on whether to permit companies with dual-class share structures to list on AIM.

Accounting standards flexibility. The LSE is considering whether to allow a broader range of local accounting standards, beyond those currently permitted, to facilitate access for overseas companies.

Transaction thresholds and class tests. Under the current AIM Rules, any transactions exceeding 10% in any of the class tests constitutes a “substantial transaction” and are subject to additional disclosure requirements by the company. The consultation proposes raising that threshold to 25% to align with the UK Listing Rules. Additional proposals include removing the profits test except for related party transactions and implementing a pro-rated gross capital calculation for the gross capital test where a minority stake is being acquired.

PISCES – FCA and LSE Publish Regulations

10 June 2025 and 26 June 2025 / FCA and LSE

The Financial Conduct Authority (FCA) has published policy statement PS25/6 and Handbook Notice No 131, which set out the final rules for the Private Intermittent Securities and Capital Exchange System (PISCES) sandbox. The PISCES sandbox is operational as of 10 June 2025 and potential PISCES operators were able to apply to participate in the sandbox as of that date.

PISCES is intended to provide a regulated secondary market for private companies and will not be a venue for the issuance of new shares. Only specific types of investors, such as sophisticated investors and employees of the relevant companies, will be able to participate in trading on PISCES. The key features of PISCES are as follows.

Participant company control. Companies whose shares are traded on PISCES will be able to determine the price parameters for any trading (and disclose the rationale for this in advance). They will also be able to restrict access to “permissioned” trading events in order to retain control over the shareholder base and limit unwanted dissemination of commercially sensitive information (e.g., to competitors).

Stamp duty exemption. Transactions on PISCES will be exempt from Stamp Duty and Stamp Duty Reserve Tax (SDRT).

Settlement. PISCES operators will have discretion over whether the participant company’s shares will need to be recorded on a Central Securities Depositary to participate on their platform.

Takeover Code. The Takeover Code will not apply to a company solely by virtue of its securities being admitted on PISCES.

The new rules establish detailed requirements for both platform operators and intermediaries. Under this framework, PISCES operators must ensure that companies trading on their platforms provide standard “core” disclosures to investors. As part of these core disclosures, companies need to include (among other information) (i) a business overview, (ii) material risk factors, (iii) overview of directors and senior managers, (iv) financial statements, (v) information about employee share schemes, (vi) director transactions and (vii) share class details. As compared to the FCA’s original proposals, the final rules reduce the amount of information that participating companies need to disclose.

For example:

  • Forward-looking information regarding the company’s financial information on financial forecasts and business strategy is no longer required.
  • Only an overview of material contracts must be disclosed.
  • The full shareholders’ agreement in respect of the company is no longer required.
  • Sustainability disclosures are no longer required to be included.
  • Disclosures regarding litigation are not required as core disclosures unless they are material to the company.

Operators are also responsible for organising and managing trading events, which must comply with stringent standards covering price parameters, trading restrictions, transparency, complaints procedures, disciplinary processes, and the inclusion of a market risk warning in all disclosures.

On 12 June 2025, Parliament approved regulations that exempt share transfers that take place on a PISCES platform from Stamp Duty and Stamp Reserve Tax. Further legislative reform is expected, as HM Treasury has announced plans to introduce additional tax benefits, including the retention of employee tax advantages for share options involving shares traded on PISCES.

On 26 June 2025, the LSE published Market Notice N05/25, detailing proposed amendments to the Rules of the LSE and trading systems in preparation for the introduction of PISCES. Notably, while the UK Market Abuse Regulation will not apply to PISCES, member firms will be expressly prohibited from engaging in manipulative trading practices. Additionally, any firm wishing to operate on PISCES will need to be registered as a Registered Auction Agent.

Updated UK Stewardship Code

3 June 2025 / Financial Reporting Council

The new UK Stewardship Code, published on 3 June 2025, introduces enhanced expectations for asset managers, asset owners and service providers. Alongside streamlined reporting requirements, the Stewardship Code now features specific principles tailored to the unique roles of different signatory groups. Additionally, the Stewardship Code broadens its coverage beyond listed equities to encompass a wider range of asset classes, such as fixed income, private equity and infrastructure. Signatories in these sectors are given the option to adopt the Stewardship Code.

In addition to providing a more comprehensive definition of stewardship, the Stewardship Code moves away from being a prescriptive to a more principles-based form of guidance. The Stewardship Code’s emphasis on delivering meaningful outcomes marks a shift away from a “tick-box” approach to compliance. Instead, it encourages more narrative-driven disclosures, prompting signatories to articulate how they implement the principles in practice and to demonstrate the tangible impact of their stewardship activities.

Directors’ Remuneration: Updated GC100 and Investor Group Directors’ Remuneration Reporting Guidance

5 June 2025 / GC100 and Investor Group

The updated GC100 and Investor Group Directors’ Remuneration Reporting Guidance 2025 (Guidance) provides detailed best practice recommendations for UK companies on how to report directors’ remuneration.

The Guidance reflects changes made by The Companies (Directors’ Remuneration and Audit) (Amendment) Regulations 2025, including streamlined requirements (with effect from 11 May 2025), such as (i) removing the requirement to include a table in the remuneration report showing annual change in salary, benefits and bonus for directors and employees, (ii) removing the requirement to make the remuneration report available online for 10 years, and (iii) allowing shareholders to approve a payment outside the remuneration policy without the need to amend the policy.

The Guidance includes a new section on ESG and notes that investors expect companies to use such non-financial performance metrics where they are relevant to the company’s operational or strategic objectives and promote long-term value creation for stakeholders. The Guidance notes that these measures should be quantifiable, and the performance measurement should be properly explained, appropriately ambitious, objective and clearly linked to the implementation of the company’s strategy.

In addition to integrating ESG considerations, the Guidance places greater importance on transparent and concise narrative reporting. Companies are advised to avoid generic, boilerplate disclosures and encouraged to provide meaningful, concise and company-specific disclosures.

The Guidance also highlights the importance of flexibility, discretion and judgement in remuneration committee decisions, and provides practical advice on how to disclose the use of discretion, especially in relation to share price movements and performance outcomes.

Stamp Taxes Reform – UK Government Consultation

28 April 2025 / HM Revenue and Customs

The UK government has launched a consultation on modernising stamp taxes on shares, seeking views on replacing Stamp Duty and Stamp Duty Reserve Tax with a single, modernised tax on share transactions, with effect from 2027.

The consultation seeks feedback on a range of different proposals, including persons liable for the new tax, securities covered, geographical scope, collection mechanisms, exemptions and reliefs. By consolidating the existing taxes into a single regime, the UK government’s stated aim is to reduce administrative complexity and compliance burdens for both taxpayers and administrators.

IoD: Consultation on the Changing Roles of Non-Executive Directors

10 April 2025 / IoD

The Institute of Directors (IoD) has launched a new commission to examine the evolving role of non-executive directors (NEDs) in the UK. The new commission will explore how the responsibilities, expectations and challenges facing NEDs are changing in response to shifts in corporate governance, regulation and stakeholder expectations.

The IoD’s findings will be used to inform recommendations on how NEDs can best support effective board performance and good governance in the future.

Primary Market Bulletin 55 (PMB 55)

17 April 2025 / FCA

In PMB 55, the FCA provided important updates for participants in the UK public markets. The bulletin is part of the FCA’s ongoing efforts to clarify regulatory expectations and support best practices among issuers and their advisers. The FCA advises participants to:

  • Carefully interpret the relevant rules and guidance, ensuring that their approach is consistent with both the letter and the spirit of the regulations.
  • Apply the guidance in a way that is tailored to the specific circumstances they face, recognising that a one-size-fits-all approach may not be appropriate.
  • Maintain robust internal processes for identifying, escalating and addressing regulatory issues as they arise. In particular, issuers should ensure that they notify the FCA promptly and without delay if they become aware that they are no longer meeting their ongoing obligations under the Listing Rules. This reflects the requirements of Listing Principle 2, which obliges issuers to engage with the FCA in an open and co-operative way.

Regulatory Initiatives Grid

14 April 2025 / FCA

The Financial Services Regulatory Initiatives Forum, an inter-departmental forum of the UK government, published the eighth edition of its Regulatory Initiatives Grid for the first time since 2023.

The grid sets out upcoming publication dates and implementation deadlines for a number of incoming matters, including:

  • The FCA aims to publish final rules and policy statements for the new public offers and admissions to trading regime in summer 2025, with implementation expected in early 2026.
  • The FCA plans to consult in Q3 2025 on new disclosure requirements for UK-listed companies, including the adoption of International Sustainability Standards Board (ISSB) standards and enhanced transition plan disclosures.
  • The grid now includes the UK’s move to a T+1 settlement cycle, scheduled for 11 October 2027.
  • The FCA will announce next steps on new rules governing non-financial misconduct (aimed at preventing workplace bullying and harassment) by the end of June 2025, following its 2023 consultation.

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.

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