In anticipation of the Market Abuse Regulation (MAR) coming into force on 3 July 2016, the London Stock Exchange (Exchange) issued on 13 April 2016 a consultation notice on proposed changes to the AIM Rules. As MAR overlaps with certain obligations under the existing AIM Rules, a number of the proposed changes clarify when AIM Companies will need to comply with both the AIM Rules and MAR. On the other hand, some of the AIM Rules are proposed to be deleted on the basis they will be superseded by MAR. We will be circulating a more detailed note on the impact of MAR in due course.
AIM Rule 11
AIM Rule 11 (General disclosure of price sensitive information) is fundamental to the maintenance of an orderly market in AIM securities. No amendments are proposed to be made to AIM Rule 11 itself, but changes to the guidance notes are proposed that direct the AIM Company to its separate disclosure obligations under Article 17 of MAR, which requires the disclosure of inside information. AIM Companies will now be subject to scrutiny by the Exchange in respect of their disclosure obligations under AIM Rule 11 and scrutiny by the relevant competent authority (which in the UK is the FCA) in respect of compliance with Article 17 of MAR.
The guidance notes will also confirm that, although the Exchange will not opine on compliance with MAR, it will however notify the relevant competent authority of any non-compliance that may come to its attention. The guidance notes will also clarify that compliance with AIM Rule 11 does not guarantee compliance with Article 17 of MAR, and vice-versa.
AIM Rule 17
The reference in AIM Rule 17 to the obligation to disclose directors' dealings is proposed to be removed on the basis that Article 19 of MAR will impose disclosure obligations on PDMRs (including directors). The guidance notes to the rule will signpost the AIM Company's obligations under Article 19. It is not expected that AIM Companies will be under any significantly greater disclosure obligations than they are currently subject to under AIM Rule 17.
AIM Rule 21
The restrictions on directors' dealings during close periods set out in AIM Rule 21 are proposed to be removed on the basis that MAR will include a prohibition on trading during close periods, as well as certain exemptions to those prohibitions.
Instead AIM Rule 21 will include an obligation for AIM Companies to adopt a dealing policy for directors and applicable employees when dealing in any of its AIM securities. Although the new Rule 21 will not prescribe the detailed content for such policies, it will set out certain minimum requirements, including: (i) restrictions on dealings during close periods; (ii) when clearance to deal must be obtained; (iii) procedures for giving clearance; and (iv) timeframes for dealing once clearance has been obtained.
The AIM Notice makes reference to the fact that it is not clear at the moment if an AIM Company can end its close period by publishing a preliminary statement of annual accounts (as currently the case under the Model Code). The AIM Rules may therefore need to be changed at a later date when the MAR position is clarified.
AIM Rule 41
It is also proposed that the guidance notes to AIM Rule 41 confirm that the Exchange may agree to waive the requirement for shareholder consent to a delisting where a company's AIM securities are already traded on an EU regulated market or an AIM Designated Market.
Responses requested by 12 May 2016
The Exchange has requested responses to the proposed changes by 12 May 2016 and will confirm the results of the consultation as soon as reasonably practicable following the end of the consultation period.