On 3 January 2018 AIM became designated as an SME Growth Market, which has the following implications for AIM listed issuers:
AIM listed companies are now exempt from the requirement to draw-up and maintain an insider list provided that the following two conditions are satisfied:
- The issuer takes all reasonable steps to ensure that any person with inside information acknowledges the legal and regulatory duties entailed and is aware of the sanctions on insider dealing and disclosure of inside information.
- The issuer is able to provide The Financial Conduct Authority (FCA) with an insider list on request. The required content of such a list is reduced as an insider's full address and personal telephone number should only be included if this information is available to the issuer at the time of the FCA's request. This should ensure that a list can be prepared without the issuer tipping-off insiders about the FCA's request.
On a first read, reducing the administrative burden on AIM issuers looks like good news. However, we still recommend that issuers keep and maintain insider lists so that they can easily and efficiently respond to any FCA request. Note that this reduction in the amount of personal information to be included on an insider list will assist an issuer in complying with its data protection responsibilities, particularly those to be implemented under the General Data Protection Regulation in May 2018.
An eligibility requirement for SME Growth Markets is that certain regulatory information remains available for five years after publication. This means that from (and including) 3 January 2018, any prospectuses, annual accounts, half-yearly, quarterly or similar financial reports, and inside information required to be disclosed publicly by the Market Abuse Regulation must be posted and maintained on an AIM issuer's website (free of charge) for a period of at least five years.
Following a recent London Stock Exchange consultation, we also expect the following changes to the AIM rules:
- An AIM issuer will no longer be able to state that it has not adopted a corporate governance code. It will need to state on its website which corporate governance code the board has decided to apply and how it complies with or departs from that code (with an explanation of reasons for any departure).
- A formalisation of the early notification process by a Nomad before admission.
The timing of the changes should tie-in with expected reforms to the UK Corporate Governance Code and Guidance on Board Effectiveness, anticipated to be in final form by early Summer 2018.