The London Stock Exchange has issued AIM Notice 44 in which it is consulting on proposed changes to the AIM Rules for Companies in advance of the Market Abuse Regulation coming into effect on 3 July 2016.

MAR establishes a new EU-wide regulatory framework on market abuse which expands on the previous regime and includes insider dealing, unlawful disclosure of inside information and market manipulation.  MAR will introduce new and more detailed regulations relating to market soundings (eg the confidential marketing of a placing of securities), the public disclosure of inside information, the contents and procedures relating to the maintenance of insider lists, transactions by an issuer’s managers and those closely associated with them (including during closed periods), and the sanctions for any related breaches.

The proposed changes to the AIM Rules for Companies include:

  • Amending the guidance note to AIM Rule 11 (General disclosure of price sensitive information) to reiterate the purpose of the rule and to signpost an AIM company’s new and separate disclosure obligation under Article 17 of MAR. Compliance with one rule will not automatically mean compliance with the other. In this regard, AIM companies will be accountable to two regulators: the Exchange regarding AIM Rule 11 and the Financial Conduct Authority  regarding Article 17.
  • Deleting from AIM Rule 17 (Disclosure of miscellaneous information) the obligation on AIM companies to notify information relating to directors’ dealings. The Exchange is satisfied that Article 19 of MAR provides an appropriate level of transparency. New guidance to Rule 17 is also proposed, signposting an AIM company’s obligations under Article 19.
  • Deleting existing AIM Rule 21 (Restrictions on Deals) and replacing it with a new Rule requiring AIM companies to have a reasonable and effective dealing policy. Existing AIM companies are expected to update their policies to ensure compliance with the new rule by 3 July 2016. Under the AIM Rules for Nominated Advisers, Nomads have a responsibility to ensure that their AIM clients continue to understand their obligations, including being satisfied that each client’s dealing policy is effective.  Many AIM companies will have a share dealing code in place already but the code will need to be reviewed and updated in order to comply with MAR and to ensure full compliance with the new requirements of AIM Rule 21.

The Exchange anticipates making consequential amendments to the AIM Rules for Companies, the AIM Rules for Nominated Advisers and the AIM Note for Investing Companies.

The Exchange will also consider further amending the AIM Rules once ESMA clarifies whether an issuer can end its close period by publishing a preliminary statement of annual accounts under MAR.

Responses on the consultation should be emailed to AIM on or before 12 May 2016.