The fourth edition of the London Stock Exchange AIM Regulation team's newsletter "Inside AIM" was issued in September 2011. The key issues addressed in the newsletter are summarised below.
Directors and certain employees of AIM companies are prohibited from dealing in the company's shares during close periods. Close periods include the period of two months before publication of the annual accounts.
The newsletter gives guidance on when the close period relating to annual accounts ends. This will generally be when the full accounts have been sent to shareholders in accordance with Rule 19 of the AIM Rules for Companies. However, if the company's nomad is satisfied that the company has uploaded its annual accounts to its website and this fact and the key information in those accounts has been notified to the market, the nomad can consider the close period ended.
If a director wishes to deal before the end of the close period as so interpreted, AIM Regulation will consider derogation requests from nomads. The newsletter states that AIM Regulation will use Listing Rule 9.7A.1, which sets out the requirements for preliminary statements of annual results for premium listed companies, as a benchmark in these circumstances.
AIM companies are required to publish certain information on their websites under Rule 26 of the AIM Rules for Companies. The newsletter highlights some areas where issues sometimes arise.
The company's website should show the number of AIM securities in issue (noting any held as treasury shares) and, insofar as the company is aware, the percentage of AIM securities that is not in public hands together with the identity and percentage holdings of its significant shareholders. This information should be updated every six months and should tally with the previous regulatory announcements made. Where discrepancies are identified, a corrective announcement should be made.
The company should have its admission document on its website. A specific derogation from AIM Regulation is required if the company wants to remove this, for example, because it has become obsolete through passage of time.
If a company's website goes down for more than a very short period of time, an appropriate regulatory announcement should be made and AIM Regulation should be contacted. All reasonable endeavours should then be made to resolve the issue as soon as possible.
Nomad's should review their clients' websites both as part of their take-on procedures for a new AIM company and thereafter on a regular basis, perhaps every six months.
Price sensitive information
Rule 11 of the AIM Rules for Companies requires the disclosure of price sensitive information without delay. Rule 10 provides that the company must take reasonable care to ensure any information it discloses is not misleading, false or deceptive and does not omit anything material.
The newsletter acknowledges that there are circumstances where a company may not be able to issue a Rule 10 compliant announcement quickly enough to comply with Rule 11. This can be particularly relevant for mining, oil and gas companies or other sectors dealing with technical information, where certain results are being evaluated.
Where this is a possibility, the company's nomad should contact AIM Regulation at the earliest opportunity to see if they will allow the company's shares to be suspended. The newsletter notes that AIM Regulation is not likely to agree to a suspension request which is made for administrative reasons or marketing convenience.
A suspension should not be for a prolonged period of time as the company should use its best endeavours to ensure that it makes a further announcement as soon as possible which will enable the suspension to be lifted.
In most cases, AIM Regulation would expect both the request and the reason for the suspension to be notified to the market by the AIM company itself.
The newsletter also includes:
- An article on investigations and enforcement action.
- An article noting that overseas AIM companies will need to consider whether they fall within the scope of the Bribery Act 2010 and that nomads will need to consider how the Act applies to them.
- Guidance on the Rule 7 lock in provisions for businesses which have not been independent and revenue earning for at least two years before their admission to AIM, and when derogations from this Rule might be granted.
- A review of companies on AIM with major operations in mainland China, Hong Kong, Macau and Taiwan, including points to consider relating to due diligence and ongoing governance.
Click here for Inside AIM Issue 4.
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This briefing is written as a general guide only. It is not intended to contain definitive legal advice which should be sought as appropriate in relation to any particular matter.