London Stock Exchange Issues Revised AIM Rules for Companies and AIM Rules for Nominated Advisers

May 27, 2014

Following consultations in January 2014, the London Stock Exchange (the “Exchange”) has issued AIM Notice 39 to confirm changes to the AIM Rules for Companies (the “AIM Rules”), the AIM Rules for Nominated Advisers (the “Nomad Rules”) and the AIM Disciplinary Procedures and Appeal Handbook (the “AIM Handbook”) which came into effect earlier this month, save for the requirements under the amended AIM Rules 26 which must be implemented by 11 August 2014.

Changes to the AIM Rules

The Exchange has adopted a majority of the changes proposed by it under the January 2014 consultation. The amendments to the AIM Rules are as follows:

Introduction

The amended AIM Rules include provisions to recognise that an AIM company may be subject to and must comply with any national laws and regulations relevant to it (as opposed to complying with the laws of the country of its incorporation only).

AIM Rule 3 (Admission Document)

The existing standard imposed by Schedule Two to the AIM Rules in respect of admission documents has been replicated in AIM Rule 3 to clarify that an applicant should take reasonable care to ensure that the information contained in its AIM admission document is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect the import of the information.

AIM Rule 11 (General disclosure of price sensitive information)

AIM Rule 11 has been amended to align it with the terminology used in the Financial Services and Markets Act 2000 (“FSMA”). Following this amendment, an obligation to release an announcement to the market is triggered by any price sensitive information even if it does not fall within any of the categories set out in this rule. In addition, the Exchange has inserted new guidance to this rule as a result of which, the ‘reasonable investor’ test, contained in the FSMA, will be one of the things the Exchange will look at when considering the application of AIM Rule 11.

AIM Rule 18 (Half-yearly Reports)

The Exchange has adopted the proposal to amend the requirements relating to half-yearly reports so that the balance sheet of an AIM company may contain comparative figures from the last notified balance sheet.

AIM Rule 21 (Restrictions on Dealings)

The Exchange has clarified that the directors of an AIM company will not be considered to have dealt in securities if they enter into a binding commitment to participate in a fundraising prior to the AIM company being in a close period and provided that they do so on the same terms as other participants in the fundraising and the close period arises as a result of the fundraising and not because of any other reason.

AIM Rules 26 (Company Information Disclosure)

The Exchange has expanded the list of information that must be available on an AIM Company’s website under AIM Rules 26. The website is now required to include:

  • The date on which the details relating to the AIM securities in issue and significant shareholders of the AIM company were last updated.
  • The annual accounts published by the AIM company under AIM Rule 19 for the last three years or since admission, whichever is shorter.
  • Details of the corporate governance code that the AIM company has decided to apply, how it complies with that code, or if no code has been adopted, disclosure of that fact and clarification of its current corporate governance arrangements if it has not adopted a governance code.
  • A statement relating to whether the AIM company is subject to the UK Code on Takeovers and Mergers or any other similar legislation or code in its country of incorporation or operation or any other similar provisions that it had voluntarily adopted.

The Exchange has also made additional changes to the guidance note to AIM Rule 26 to reflect AIM’s recognised growth market status for the purposes of the Finance Bill 2014 and the associated changes to the stamp duty and stamp duty reserve tax for certain AIM companies. The new guidance acts as a reminder to AIM companies to inform Euroclear UK & Ireland of changes in their stamp duty status on admission or delisting from a recognised stock exchange.

The changes to AIM Rules 26 will come into force on 11 August 2014.

AIM Rule 43 (Jurisdiction)A new AIM Rule 43 has been introduced to clarify that if an AIM company ceases to have its shares traded on AIM, the Exchange will retain jurisdiction over it for the purpose of investigating and taking disciplinary action for breaches of the AIM Rules when the company was an applicant or when its shares were traded on AIM. As a result of this amendment to AIM Rule 43, new wording has been added to AIM Rule 22 to clarify that if the Exchange is determined to have jurisdiction under AIM Rule 43, the company is required to provide information to the Exchange under AIM Rule 22 irrespective of whether or not the company’s shares are now traded on AIM. A consequential change has also been made to the AIM Handbook.

Schedule 3 to the AIM Rules (Class Tests)

Schedule 3 has been amended to clarify that the audited accounts to be used for the relevant class tests are the consolidated accounts of the company.

Guidance Note to AIM Rule 8

Under new guidance, the Exchange, when assessing whether or not a company’s investing policy has been substantially implemented, will expect the company, inter alia, to have invested in a range of investments. In addition, the guidance note provides that, to be eligible, a fund must not be complex and must be closed-ended.

Guidance Note to AIM Rule 41

The Exchange has added new language to part (c) of this guidance note which sets out the circumstances under which the Exchange may agree that the shareholder consent in general meeting is not required for cancellation of admission in respect of a takeover effected by way of a UK scheme of arrangement. In order for a scheme to qualify, it must have been approved by the shareholders and by the court.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.