After a lengthy consultation period, the London Stock Exchange (the Exchange) finally published its revised AIM Rules in February 2007, with few changes have been made to the draft rules which were originally circulated in October of last year.
For companies, there is now a requirement to maintain a website containing key information on the company and including copies of the company's most recent admission document, accounts and recent announcements. Companies have until 20 August 2007 to set up their websites.
There is also a greater emphasis on ensuring that companies have the necessary procedures, systems and controls in place to ensure compliance with the AIM Rules.
The major change introduced is a new rulebook for nominated advisers (nomads). This includes a schedule setting out the tasks to be carried out by nomads in discharging their duties to the Exchange. The Exchange has said that this reflects current best market practice and is not intended to cause a major change.
The result of these changes will be that nomads will want more regular and structured contact with companies, with a particular emphasis on companies' internal procedures and controls. This includes a share dealing code, internal financial reporting procedures and a procedure for dealing with price-sensitive information and announcements. In addition, some nomads are now insisting that companies have a compliance committee or compliance officer specifically charged with ensuring and reviewing compliance with the AIM Rules. Nomads are also requiring more regular information from their client companies, such as copies of board minutes and management accounts.
Some nomads have also suggested that to ensure that the due diligence required on a flotation is carried out to an adequate standard it should be conducted by the nomad's solicitors rather than the company's solicitors.
It will be interesting to see how market practice in this area develops. These changes will lead to an increase in costs for AIM companies, which is likely to push up the minimum size of companies joining the market.