Introduction

Last year the rules for the AIM market underwent considerable change, with a new rulebook being introduced for nominated advisers and some amendments being made to the AIM Rules for Companies.  The main change for AIM companies was the requirement both to have a website and to post on it all core management and financial information (Rule 26).  AIM companies were expected to implement the new requirements by 20 August 2007.

Under the new rules, investors can now find on an AIM company’s website various information including the admission document and any circulars or similar publications sent to shareholders within the past 12 months, the annual report, and all regulatory news service announcements for the past 12 months.

For many companies the new requirements did not cause too much concern as they were already publishing much of the required information on their websites.  Even for those companies who were not, or who did not have a requisite website, the start-up costs were not considered to be too significant.   However, the Stock Exchange has now issued an AIM Notice (AIM29/AD3), stating the results of the exercise that it undertook immediately after the 20 August deadline to assess compliance with the Rule.  Perhaps not surprisingly, some companies failed to come up to scratch.

What action has been taken?

The Exchange has taken disciplinary action against nine AIM companies, resulting in total fines of £95,000 for failure to comply fully with the requirements of Rule 26.  Although three companies appealed, one withdrew its appeal before it was determined, and the other two lost their appeals.  The fines ranged from £3,000 to £15,000, depending on the seriousness of the breach.  However, significantly, there was no public censure to accompany these fines so the companies involved have not been named. Seven Warning Notices were also issued to other companies for less serious breaches of Rule 26. 

Compliance in the future

According to the Exchange, feedback on Rule 26 has been extremely positive – it has been well received by investors, analysts, companies and nominated advisers and has improved the transparency and consistency of information available about all AIM companies.  The Exchange has even gone so far as to say that it believes all AIM issuers across the market are now complying.  Meanwhile, the fact that the Exchange was prepared to take action so early on after the deadline indicates the strength of its resolve.

© Davenport Lyons 2008. All rights reserved.
This document reflects the law and practice as at January 2008. It is general in nature, and does not purport in any way to be comprehensive or a substitute for specialist legal advice in individual circumstances.