The 2022 PEG Reset at Three Years: How Britain's New 24% Pre-Emption Disapplication Headroom Has Reshaped Main Market and AIM Issuance

When the Pre-Emption Group (PEG) published its revised Statement of Principles on 4 November 2022, it institutionalised what the COVID-era exemptions had begun. The five-and-five regime that had governed UK secondary issuance since 2008 — five per cent of issued share capital for general purposes plus five per cent for specified acquisitions or capital investments — was replaced with a structure built around four cumulative tranches totalling 24 per cent. Three full reporting cycles later, the data picture is clearer: the routine ten-per-cent floor is now the baseline at FTSE 350 AGMs; the additional ten-per-cent acquisition tranche is being asked for more often than it is used; and the two follow-on tranches, designed for retail-investor catch-up offers, have moved from novelty to a feature of most large UK placings.

This piece sets out what Section 561 of the Companies Act 2006 actually requires of UK companies issuing equity securities for cash, what the 2022 PEG reset changed, and what three years of issuance data have shown about how Main Market and AIM issuers have used the new headroom.

What Section 561 actually requires

Section 561(1) provides that a company proposing to allot equity securities for cash must offer them first to existing shareholders in proportion to their holdings. "Equity securities" is defined widely in section 560 — ordinary shares plus rights to subscribe for, or convert into, ordinary shares. Open offers and rights issues that respect the proportional entitlement satisfy the section by definition; placings and other selective issuances do not.

Three statutory routes get round the constraint. First, section 569 disapplies pre-emption automatically for a private company with a single class of shares. Second, section 567 lets a private company exclude pre-emption permanently via its articles. Third — the route relevant to Britain's listed and AIM issuers — section 570 permits a general disapplication by special resolution alongside the section 551 allotment authority, and section 571 permits a transaction-specific disapplication for a particular allotment.

The mechanical filing obligation is the same in all three statutory routes. A special resolution must be filed at Companies House within 15 days of being passed (section 30), and any subsequent allotment must be returned on form SH01 within one month (section 555). The resolution itself sits on the company's public file at Companies House indefinitely.

The pre-2022 regime: a 5+5 ceiling that held for a decade

PEG's previous Statement of Principles, which had governed FTSE 350 issuance since its 2008 iteration, capped routine disapplication at five per cent of issued share capital in any rolling twelve-month period for general purposes, with a further five per cent available for an acquisition or specified capital investment announced no later than the time of issuance. Issuers seeking more than ten per cent in aggregate were expected to consult shareholders in advance.

The COVID period punctured the ceiling. Between April 2020 and November 2021, PEG accepted that issuers could seek up to 20 per cent of issued share capital under temporary additional flexibility, on the basis that capital-raising urgency justified the departure. By the time the temporary regime expired, a clear majority of the FTSE 100 had used some form of expanded disapplication, and the pressure for a permanent recalibration had become irresistible.

November 2022: what the reset actually changed

The Mark Austin-led Secondary Capital Raising Review reported in July 2022. Its principal recommendation on pre-emption — that the routine disapplication ceiling should double, with an additional retail follow-on layer — was adopted almost verbatim in the new PEG Statement of Principles published on 4 November 2022.

The structure of the 2022 reset, against the pre-2022 baseline:

The follow-on tranches are designed to permit a top-up retail offer alongside a primary placing — a structural response to the criticism that institutional bookbuilds systematically excluded retail shareholders. They must be made on terms at least as favourable as the institutional leg and disclosed to shareholders within seven business days of the related primary issuance.

The 2022 Statement also tightened disclosure expectations around use of the headroom. Issuers drawing on the routine ten-per-cent tranche are now expected to publish a post-issuance retrospective via RNS within seven business days, naming the bookrunner, the discount to mid-market, and the use of proceeds. Capital-hungry companies — broadly, those at pre-revenue or early commercial stage in specified sectors — retain the ability to seek bespoke higher figures with prior consultation.

Three years of issuance data: what the Main Market has actually done

PEG's annual monitoring reports for AGM seasons 2023, 2024 and 2025 — covering FTSE 350 disapplication resolutions tabled in the twelve months to mid-September each year — show a clear pattern of adoption that diverges sharply from utilisation.

1. Adoption of the 10% routine tranche. By the 2025 AGM season, around 88 per cent of FTSE 100 companies and roughly 71 per cent of FTSE 250 companies had moved their general disapplication resolutions to the 10 per cent ceiling. The pre-2022 5 per cent figure now appears at fewer than one in eight FTSE 350 AGMs.
2. Adoption of the 10% acquisition tranche. Take-up of the additional 10 per cent acquisition tranche has been slower — about 64 per cent of the FTSE 100 by AGM 2025, against under half in AGM 2023. The tranche is most heavily adopted in sectors with active M&A pipelines (industrials, healthcare, technology) and largely declined in financials and utilities.
3. Adoption of the 2+2% retail follow-on tranches. The retail follow-on layer reached majority adoption only in AGM 2025, when 53 per cent of the FTSE 100 sought both 2 per cent tranches. AIM issuers have been notably slower — under one in five AIM 100 issuers tabled the equivalent resolution in 2025.
4. Actual utilisation of the headroom. Adoption is not utilisation. The 2025 monitoring report identifies 47 FTSE 350 issuances during the year that drew on the post-2022 expanded headroom — almost all between 5 and 10 per cent of issued share capital. Fewer than ten issuers exceeded 10 per cent, and only three drew on both the routine and acquisition tranches in the same placing.
5. Retail follow-on offers in practice. Approximately 19 follow-on retail offers were made by FTSE 350 issuers in the twelve months to AGM 2025, with PrimaryBid handling the majority. The average follow-on size was 1.2 per cent of issued share capital — comfortably within the 2 per cent ceiling, suggesting issuers are using the headroom as a guidance figure rather than a target.

The headline reading from three cycles is that 24 per cent has become a precautionary annual authority rather than a deployment plan. Issuers are taking the larger headroom from shareholders to preserve optionality in volatile markets, and using only a fraction of it.

The AIM angle and the smaller-company gap

AIM Rule 14 imposes a parallel shareholder-approval requirement for reverse takeovers and fundamental changes of business but does not codify pre-emption in the same way. Most AIM issuers nevertheless follow PEG principles voluntarily, on the basis that institutional shareholders apply the same scrutiny across listed and quoted markets.

The 2025 PEG data shows a clear divergence by size. AIM 50 issuers adopt the post-2022 structure at rates similar to the FTSE 250 (around 66 per cent on the 10 per cent routine tranche). Smaller AIM issuers — broadly, those with market capitalisation below £100 million — are much more likely to retain the 5+5 framework, partly because their institutional shareholder bases are less aligned with PEG and partly because their realistic placing needs rarely exceed 10 per cent.

The Companies House filings paper trail

A FTSE 350 issuer using the full 24 per cent headroom in a single placing generates a distinctive sequence of filings at Companies House:

• A special resolution under section 570 (general disapplication) or section 571 (transaction-specific) — filed under section 30 within 15 days of being passed.
• A return of allotment on form SH01 within one month of allotment, showing the number, class, nominal value and aggregate amount paid up, together with the statement of capital required under section 555.
• Where the placing is followed by a 2 per cent retail follow-on, a second SH01 within one month of that follow-on's completion.
• If the placing alters the company's articles (rare in disapplication-only placings), filings under section 26 within 15 days of the change.

ECCTA's identity verification regime, fully bedded in by mid-2026, does not change the substance of these filings, but the directors signing the SH01 must now hold verified-director status. For listed PLCs this is a routine compliance item; for smaller AIM issuers it has occasionally delayed admission to trading by 24 to 48 hours where verification has lapsed at the wrong moment.

Where 2026 leaves issuers

PEG is conducting a scheduled three-year review of the 2022 Statement of Principles through 2026, with a refreshed Statement expected for AGM 2027. On current evidence the case for further liberalisation is thin. The headroom is being adopted, not used; the retail layer is functioning as designed; and the disclosure framework has held up across a period of meaningful issuance volume. The likeliest outcome is consolidation rather than extension — a tidier definition of "specified capital investment", refined retail-offer disclosure timetables, and perhaps a permanent rather than discretionary regime for capital-hungry companies.

For Britain's listed and AIM-quoted companies, the practical message has not changed since November 2022. Take the full 24 per cent at AGM. Use what you actually need. File the special resolution within 15 days. Return the allotment within one month. Disclose use of the routine tranche within seven business days. The headroom is now large enough that the binding constraint is rarely Section 561; it is usually shareholder appetite, market conditions, or the price of the placing itself.