Changes to AIM Rule 26 –are you ready?

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The London Stock Exchange (LSE) has published AIM Notice 48 stating that it has applied to the Financial Conduct Authority for ‘SME Growth Market’ status. The new status, once confirmed, will require minor consequential amendments to the AIM Rules for companies.

From 3 January 2018, the Markets in Financial Instrument Directive (“MiFID II”), will introduce a new designation of “SME Growth Market” that operators of qualifying markets can voluntarily apply for. The SME Growth Market designation has been developed by the European Commission, as part of its capital markets union plan, to create a bespoke regulatory framework for European growth markets.

The designation is also expected to raise the profile and visibility of SME Growth Markets across the EU and distinguish them from multilateral trading facilities (MTFs) which generally operate as trading facilities that do not have a primary market function.

The London Stock Exchange (LSE), as operator of the largest market for small and medium sized growth companies in the EU, has applied to the Financial Conduct Authority (FCA) for AIM to be registered as an SME Growth Market and is expecting to receive confirmation of final approval for the new status to take effect from 3 January 2018.

On 5 December 2017, LSE published AIM Notice 48 which stated that the above application had been made and that minor consequential amendments would be needed to the AIM Rules for Companies once final approval from the FCA had been given. The changes to the AIM Rules are expected to take effect from 3 January 2018.

The changes are to AIM Rule 26 (Company Information Disclosure) which currently requires AIM companies to maintain a website on which information should be available free of charge. This information includes:

  • an AIM company’s most recent admission document together with any circulars or similar publications sent to shareholders within the past 12 months
  • the annual accounts published pursuant to AIM Rule 19 for the last three years or since admission, whichever is the lesser, and all half yearly, quarterly or similar reports published since the last annual accounts pursuant to AIM Rule 18
  • all notifications the AIM company has made in the past 12 months.

The eligibility requirements for SME Growth Markets require that certain regulatory information remains available for five years once published. The LSE is therefore making minor amendments to the AIM Rules, making it clear that Rule 26 will apply in respect of the five year period to:

  • any prospectus an AIM company has published
  • annual financial reports and half yearly financial reports
  • regulatory notifications made public containing inside information for the purposes of MAR.

These minor amendments are expected to come into force on 3 January 2018. These requirements will not be retrospective for disclosure made prior to the implementation date.