On 16 December 2009 the London Stock Exchange (LSE) published its first edition of ‘Inside AIM’, a periodic newsletter from the AIM Regulation Team. Inside AIM is designed to keep the AIM adviser community, in particular nominated advisers (nomads), updated on key AIM policy and technical matters.
The newsletter covers provides technical guidance on:
- AIM Rule 13 concerning the aggregation of directors’ participation in a related party transaction. Where more than one director participates in the same transaction with an AIM company, for example, in a share placing, it may be appropriate to aggregate their participation when calculating the class tests to assess whether AIM Rule 13 applies as the directors could act in concert when setting the terms of the transaction.
- The applicability of AIM Rules 13, 17 and 21 where an AIM company is contemplating the purchase of its own securities. The AIM Regulation Team states that, where the AIM company intends to complete a tender offer or share buyback, it supports the market practice of completing such an offer or buyback in accordance with the Listing Rules. The newsletter also sets out the issues the AIM Regulation Team will take into account if a derogation request is submitted to enable a buyback programme to be completed during a close period.
- AIM Rule 14 concerning whether a suspension of trading is required where an AIM company enters into an option agreement that would, on exercise, be treated as a reverse takeover. The newsletter sets out certain factors which, together with the exact terms of the option, will help determine whether suspension is required.
- The impact of the revised reporting deadlines contained in the Companies Act 2006 (CA 2006) on AIM Rule 19. The CA 2006 requires companies incorporated in England and Wales to present their accounts at their annual general meeting (AGM) and file them with Companies House within six months (previously seven months). AIM companies will therefore need to send their annual accounts to shareholders before the six month deadline referred to in AIM Rule 19 to ensure that they are able to meet the deadline imposed by the CA 2006.
- The AIM Note for Investing Companies (AIM Note). The AIM Regulation Team clarifies certain issues that have arisen following the publication of the AIM Note in June 2009 in relation to the types of entities and security types that are appropriate for admission to AIM, the implementation of an investing policy by an investing company following a disposal under AIM Rule 15 and the inclusion of information required by Annex XV Prospectus Rules in an AIM admission document.
- AIM companies listing depositary receipts (DRs). The DRs will not be admitted to AIM but the AIM Regulation Team may restrict the percentage of AIM securities represented by DRs to no more than 25 per cent. DRs will also only be considered appropriate for admission to AIM where the AIM company is incorporated in a jurisdiction which prohibits, or unduly restricts, the offering or admission of its securities outside that country.
Inside AIM also includes:
- A series of frequently asked questions (FAQs) which deal with less complex matters requiring clarification.
- An investigations and enforcement update containing details of disciplinary actions taken for breaches of the AIM Rules and the implications of these for AIM companies and nomads. Private disciplinary actions will be published via Inside AIM going forward.
- An AIM market policy update highlighting lobbying action taken by the LSE.