The London Stock Exchange has issued AIM Notice 44 relating to proposed changes to the AIM Rules for Companies in advance of the Market Abuse Regulation (MAR), which comes into effect on 3 July 2016. The key disclosure obligations in MAR relate to the disclosure of inside information and disclosure of transactions by persons discharging managerial responsibilities (PDMR) and persons closely associated with them. MAR will also introduce mandatory close period rules. AIM does not expect there to be any significant change to the approach of an AIM company and its nominated adviser (Nomad) to considering an AIM company’s disclosure obligations under the AIM Rules.
AIM, which was originally known as the Alternative Investment Market, opened in June 1995 and is operated and regulated by the London Stock Exchange (‘Exchange’). The eligibility criteria for admission to AIM are relatively relaxed compared to admission to the Exchange’s Main Market, but any company seeking admission must comply with the AIM Rules. Although AIM Companies are not bound by the Listing Rules, applicable to those companies admitted to the Main Market, they do need to comply with DTR5 of the Disclosure Rules and Transparency Rules.
Proposed changes to the AIM Rules
Key proposals include:
AIM Rule 11 (general disclosure of price sensitive information) – while AIM Rule 11 would remain as is, the Exchange proposes amending the guidance note to clarify the purpose of the rule and to make it clear that, as the Exchange does not plan to amend AIM Rule 11, an AIM company will be subject both to AIM Rule 11 and to Article 17 of MAR. Compliance with one rule will not automatically mean the other rule is satisfied;
AIM Rule 17 (disclosure of miscellaneous information) - deleting from the list of information that an AIM company must notify without delay, information relating to directors' dealings. The Exchange is satisfied that Article 19 of MAR provides an appropriate level of transparency for PDMRs and persons closely associated with them;
AIM Rule 21 (restrictions on deals) - deleting existing AIM Rule 21 and replacing it with new AIM Rule 21 (Dealing policy), requiring AIM companies to have a reasonable and effective dealing policy in place from admission. Existing companies would be expected to update their existing policies to comply with the new rule by 3 July 2016. Minimum contents for such policies will be prescribed, including the AIM company’s close periods, the circumstances under which directors/employees must seek clearance to deal and the procedures for obtaining clearance etc.; and
AIM Rule 41 (cancellation) – the guidance note on AIM Rule 41 provides that cancellation of admission of AIM securities is conditional upon shareholder consent unless the Exchange agrees otherwise. The Exchange proposes amending the guidance to clarify the circumstances in which the Exchange might waive the need for shareholder approval to such a cancellation where those securities are already, or will be, admitted to trading on an EU regulated market or an AIM Designated Market.
If these changes are made, the Exchange would also make consequential amendments to the AIM Rules for Companies, the AIM Rules for Nominated Advisers and the AIM Note for Investing Companies.
Comments are invited on the proposed amendments from all AIM companies, nominated advisers and other market participants on or before 12 May 2016. AIM Notice 44 also notes that the Exchange will consider further amending the AIM Rules if and when ESMA clarifies whether an issuer can end its close period by publishing a preliminary statement of annual accounts under MAR.