AIM Regulation has published an Inside AIM update on how social media (such as "twitter", the company's website and other non-regulatory news feeds) interacts with the disclosure obligations under the AIM Rules. The update clarifies that these forms of communication are subject to the same rules regarding disclosure of regulatory information.
Due to the increased use of such forms of communication, AIM recommends that each AIM company that uses social media should consider with their nominated adviser (nomad) how to manage social media in the context of their obligations under the AIM Rules.
Disclosure obligations under AIM Rules
AIM Rules 10 and 11 aim to ensure that there is equal, fair and timely disclosure of regulatory information to the market and that integrity in the market is maintained.
The fact that information released through other outlets may be, or may eventually become publically available, is not a substitute for making a notification under the AIM Rules no later than it is disclosed elsewhere. This includes releasing the information to the media even on an embargoed basis. So, disclosure by social media alone will not meet an AIM company’s disclosure requirements and an AIM company must continue to use traditional means of regulatory dissemination which take precedence
The consequence of not doing so, from an AIM Rules perspective, may be the suspension of an AIM company’s securities from trading, pending a compliant notification where there has been unusual share price movement because of an inequality of information in the market. Further, if the London Stock Exchange considers that an AIM company has breached AIM Rules 10 and/or 11, it will investigate and take such disciplinary action as it considers appropriate.
Dissemination of social media in the context of the AIM Rules
As disclosure by social media alone will not meet an AIM company's disclosure obligations, AIM Regulation’s update advises AIM companies to consider with their nomad how the dissemination of information is supervised and monitored to ensure compliance with its disclosure obligations under the AIM Rules. The update makes it clear that disclosure by social media is not a substitute for making a notification under the AIM Rules and traditional means of regulatory dissemination will take precedence.
AIM Rule 31 requires an AIM company to have in place sufficient procedures, resources and controls to enable it to comply with the AIM Rules. AIM Regulation states that such systems, procedures and resources should take into account the use of social media and other electronic communication used by the company in order to manage its disclosure obligations under the AIM Rules. Communication policies should take into account the needs of the particular company and AIM Regulation suggests (by way of example) that AIM companies should consider:
Whether the AIM company has a clear policy on social media use as part of its existing communications policies?
How effective is that policy in practice i.e. is it read and understood by all relevant persons?
How regularly is the policy reviewed and how does the AIM company identify and ensure the policy is updated when necessary?
If an AIM company engages third parties to disseminate regulatory information on its behalf via social media, how does it satisfy itself that the third party will not compromise compliance with the AIM Rules?
What are an AIM company's protocols in talking to its nomad in advance of the release of information via social media?
AIM Regulation also recommends that an AIM company should consider how to be kept informed about social media posts so that the nomad can be alerted to potential disclosure issues such as a false market developing in the AIM company's securities. AIM Regulation reminds companies that they should continue to make the London Stock Exchange aware (via the nomad) of significant rumours or problems relating to internet discussions which may impact on the orderly market in its securities.
As a final point, AIM companies should also be aware of their obligations under the Market Abuse Regulation (MAR) and note that any premature or selective disclosure by social media may give rise to issues under MAR and fall within the remit of the FCA's powers.