Changes to AIM Legislation
1�Jun�2005
Daniel O'Connell examines impending changes to AIM legislation
The first quarter of 2005 has been extremely active, with 130 new admissions to AIM. Advisers are now looking ahead at forthcoming regulatory changes, and may be hoping for a quieter summer in which to absorb the implications.
July 1 will see regulatory changes with the introduction of new market abuse legislation, new prospectus legislation, related changes to the Listing Rules and the AIM Rules, and the comple�tion of the listing regime review.
The Listing Rules will be divided into three sourcebooks within the FSA Handbook, rewritten in handbook format incorporating guidance into the rules. Listing Rules will cover admission and continuing obligations on the official list. Disclosure Rules will principally deal with the announcement of price sensitive information and the disclosure of dealings for companies on the official list.
Prospectus Rules will apply to offers of securities by all companies in the UK, whether officially listed, on AIM or OFEX, or not traded on any market. Every prospectus will require approval by the FSA before publication (currently only required by listed companies).
Two principal exemptions exist � for offers raising less than euro2.5 million, and for offers to fewer than 100 persons. The definition of an "offer" will include placements made through financial intermediaries. Where a placing is carried out through discretionary brokers, the usefulness of the "100 persons" exemption will be greatly reduced. A prospectus will not be needed for introductions to AIM. The AIM Rules will redefine the content of admission documents where a prospectus is not required.
There are a number of issues to be addressed on the prospectus regime, market abuse and the disclosure of information. How will prospectus approval requirements impact AIM companies? Can the approval process accommodate the levels of activity seen on AIM? To what extent will AIM�s flexibility and independence be compromised?
Do companies have robust systems and procedures that identify price sensitive information and generate announcement decisions appropriately and swiftly? Can market announcement decisions amount to market abuse by companies or their directors? Above all, have the boards of companies got the personnel to examine and meet all these challenges?
Source: M&A May/June 2005 issue
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