Bulletins | July 19, 2017

Review of AIM Rules

The London Stock Exchange (LSE) is currently conducting a review of the AIM Rules for Companies (AIM Rules) and the AIM Rules for Nominated Advisers.

In a discussion paper, published on 11 July 2017, the LSE identifies the following key areas of its review:

  • Early notification process. Currently, nominated advisers (nomads) are required to approach the LSE at an early stage of an application for admission of a company only where there are any atypical features or potential issues that may be of concern to the LSE as set out in Inside AIM (Issue 3). In its discussion paper, the LSE proposes to formalise and extend this practice of early confidential discussions to all proposed admissions in order to reduce the risks of a delay, postponement or withdrawal of a proposed admission where an issue is either not raised in a timely fashion or is identified towards the end of the application process.
  • Assessment of appropriateness. The LSE is proposing to include in the AIM Rules for Nominated Advisers a non-exhaustive list as guidance to nomads of the factors they should take into account when assessing the appropriateness of a company prior to its admission to AIM. The LSE emphasises that each of these factors, in their own right, can be of such importance as to render a company not appropriate for AIM.
  • Entry criteria. As AIM has matured and the market capitalisation of AIM companies and the average amount of capital they raise have increased over time, the LSE is considering whether to introduce (1) a minimum free float requirement, and (b) a minimum capital raising threshold. Based on the size of fundraise by new AIM applicants between 2014 and 2016, the LSE asks for feedback on possible minimum fundraising levels at £2m, £3m, £6m or another amount.
  • Corporate governance. The LSE is further asking whether the current corporate governance disclosure requirement in AIM Rule 26 is still appropriate or whether it should make it mandatory for AIM Companies to annually comply and explain against existing codes such as the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies and the UK Corporate Governance Code.

Feedback to the discussion paper should be submitted by 8 September 2017.

For further information, please contact Marlies Braun at mbraun@wedlakebell.com.