The London Stock Exchange recognises market conditions with proposed changes to the AIM and Nomad Rules

On 27 January 2014 The London Stock Exchange issued an AIM Notice that it had undertaken a review of the AIM Rules for Companies (AIM Rules) and the AIM Rules for Nominated Advisers (Nomad Rules) and is consulting on proposed changes. 

The Notice and changes can be found at https://www.londonstockexchange.com/companies-and-advisors/aim/advisers/aim-notices/aim-notices.htm

The Exchange welcomes comments and feedback from all AIM companies, nominated advisers and other market participants, which should be sent on or before Monday 3 March 2014 by email to aimnotices@lseg.com

It is currently intended that the new rules will come into effect during 2014.

Proposed changes to the AIM Rules for Nominated Advisers

The proposed changes to the Nomad Rules include the following, reflecting the continuing restructuring of nominated adviser firms and the reduced frequency of transactions over recent years.

Emphasising that nominated adviser status should not be regarded as a licence that can be sold or transferred, it is proposed that rules 2 and 11 be amended so that a nominated adviser is required to inform the Exchange as soon as possible of any potential material change to its structure or organisation or any potential change of control.  Following a change of control, a new application for nominated adviser status is confirmed to be required, for which the Exchange will consider in particular the new controller and its ability to satisfy in its own right the requirements set out in rules 1-3 of the Nomad Rules (criteria for eligibility as a nomad and preservation of the reputation and integrity of AIM).

A key factor in achieving or maintaining nominated adviser status is the requirement for a firm to have a minimum of 4 Qualifying Executives.  Whereas no changes are proposed to the criteria for new Qualified Executive applicants, some latitude is proposed so that under rule 4 existing Qualified Executives will remain eligible:

  • if they have acted in a lead corporate finance capacity on three relevant transactions in the last five years rather than the current three year period, and
  • if they have over five years continuous experience as a Qualified Executive and are actively involved in a corporate finance advisory role, in relation to AIM in particular, provided they have acted in a lead corporate finance role on one relevant transaction in the last five years.

Proposed changes to the AIM Rules for Companies

The AIM Notice emphasises that the proposed changes to the AIM Rules are mainly of an administrative and clarificatory nature, although it highlights two substantive changes:

  • clarification that when an AIM company de-lists, the Exchange retains jurisdiction over it for the purpose of investigating and taking disciplinary action in relation to actual or suspected AIM Rule breaches; and
  • rule 11 (general disclosure of price sensitive information) is to be amended so as to clarify that the new developments requiring disclosure that are referred to (changes in: financial condition, sphere of activity, performance of business or expectation of performance) are by way of example only.

Changes to the Guidance Notes (which form part of the AIM Rules) are proposed to reflect (amongst other matters) technical guidance previously given in the Exchange’s Inside AIM publication.

Edwin Coe’s corporate group has significant experience on advising on AIM regulation and legal issues arising from an application for or admission to trading on AIM. 

If you would like any further information about this, please contact Nick Williams by emailing nick.williams@edwincoe.com



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