Summary

The AIM Regulation team of the London Stock Exchange has recently published the first issue of its new newsletter, Inside AIM. The publication is intended to show how certain aspects of the AIM Rules are interpreted by the AIM Regulation team. The newsletter will be published bi-annually or as required.

Detail

Amongst the matters covered in Issue 1, is guidance in relation to the following areas:

Share buybacks

The Listing Rules require a tender offer if an Official List company is purchasing more than 15% of its own securities. There is no equivalent requirement in the AIM Rules. The guidance from the AIM Regulation team is that an AIM company using a tender offer should comply with the requirements in the Listing Rules.

The guidance also states that it is best practice for an AIM company to comply with the share buyback provisions of the Listing Rules, in the absence of equivalent provisions in the AIM Rules.

Related party transactions

AIM Rule 13 provides that, in relation to a transaction with a related party which exceeds 5% in any of the class tests, an announcement must be made.

The guidance from the AIM Regulation team is that where more than one director participates in the same transaction with a company, for example in a share placing, it may be appropriate to aggregate their participation when calculating the class tests to see whether AIM Rule 13 applies.

Enforcement

The AIM Regulation Team is also using Inside AIM to set out details of its private censures of AIM companies and nomads. Included amongst the private censures set out in the first issue of Inside AIM are:

  • Private censure of a company for failure to announce that its business was materially underperforming, when it delayed updating the market on the basis that actual year-end figures may be affected by possible accounting or tax changes or exceptional items.
  • Private censure of a company for failing to announce that it had breached its banking covenants as the board believed its full year results would not be materially short of market expectations.
  • Private censure of a nomad for failing to challenge a company's management on the contents of announcements where the nomad had reason to believe that these may be inaccurate or incomplete.

For further information, see: http://www.londonstockexchange.com/companies-and-advisors/aim/documents/insideaimissue1dec2009.pdf