Continuing Obligations for Listed Companies

AIM Companies

Whilst nowhere near as detailed as those applicable to companies listed on the Main Market, the continuing obligations with which an AIM company is required to comply are derived from broadly the same principles.

Notably, on 3 July 2016, when MAR comes into force, AIM companies will have disclosure obligations under the AIM Rules (owed to AIM Regulation) in addition to obligations under the MAR (owed to the FCA). Key disclosure obligations under MAR relate to the disclosure of inside information and disclosure of deals by PDMRs and persons closely associated with them. Disclosure obligations under MAR are discussed throughout this chapter (see also Chapter 8).

A. General Obligation Of Disclosure

Under AIM Rule 11, an AIM company must notify a RIS without delay of any new developments that are not public knowledge concerning a change in its financial condition, its sphere of activity, the performance of its business, or its expectation of its performance, which, if made public, would be likely to lead to a substantial movement in the price of its AIM securities.

The AIM company must take care that any information it provides is not misleading, false or deceptive and does not omit anything likely to affect the import of such information, and it must provide the information no later than it is published elsewhere (AR 10).

Although it is crucial for AIM companies to keep in regular contact with their nomads to ensure that the general obligation of disclosure is not breached, there have been numerous instances of AIM companies falling foul of this obligation. For example, two AIM companies were privately censured104 and fined a total of £120,000 by the AIM Executive Panel for, inter alia, breaches of AIM Rules 10 and 11, demonstrating the seriousness with which the Exchange views the failure of an AIM company to properly communicate with its nomad.

In one of the cases, which involved a £40,000 fine, the company had received urgent enquiries from its nomad regarding press speculation and a corresponding rise in the company’s share price. In response to these enquiries, the company confirmed to its nomad that there were no new developments or corporate activities to announce. However, at the time of the nomad’s enquiries, the company was undertaking a transaction that constituted unpublished pricesensitive information. In breach of Rule 31, the company failed: (i) to let the nomad know about the transaction upon being asked the specific question whether there were any undisclosed corporate transactions in the context of a price movement; and (ii) further, to inform the nomad previously that it had been in discussions to imminently close the transaction.

In breach of Rule 10, a misleading notification was issued (with no reference to the imminent transaction) which created the impression that the company had no news to announce. The transaction was then completed and was disclosed in a notification soon after. The news was accompanied by a significant change in the company’s share price, and an investigation/ disciplinary action followed.

i. Introduction to MAR +

The framework of continuing obligations imposed on AIM companies has been extended since the entry into force of MAR. MAR is equally applicable to AIM companies as it is to companies whose shares are listed on the Main Market, the result being that AIM companies have dual disclosure obligations (i) obligations under MAR (owed to the FCA) and (ii) disclosure obligations under the AIM Rules (owed to AIM Regulation). Key disclosure obligations under MAR relate to the disclosure of inside information and disclosure of dealings by PDMRs and persons closely associated with them (or "PCAs") and are discussed throughout this chapter.

Where relevant, this Part A will discuss the disclosure obligations that have been introduced by MAR and outline where these obligations differ from those under the pre-MAR rules for AIM companies.

Where applicable, further proposed changes by the FCA to individual rules will be discussed throughout this chapter.

ii. Disclosure of Inside Information +
The disclosure obligations for issuers under MAR are designed to ensure that there is prompt and fair disclosure of relevant information to the market. Issuers are under an express responsibility to ensure that inside information is made public in a manner which enables fast access and complete, correct and timely assessment of the information by the public. This is coupled with a further requirement that issuers must not combine the disclosure of inside information with the marketing of its activities.2

Article 17(1) MAR provides that issuers must inform the public as soon as possible of inside information which directly concerns the issuer, unless Article 17(4) MAR applies (which allows the disclosure of inside information to be delayed in certain circumstances).

  • Definition of "inside information" (Article 7 MAR)

"Inside information" is information of a precise nature that:

  • has been made public;
  • relates directly or indirectly to one or more issuers or to one or more financial instruments; and
  • would, if it were made public, be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments.

For these purposes, information will be “precise” if it indicates a set of circumstances which exist or may reasonably be expected to come into existence (or an event that has occurred or may reasonably be expected to occur), where it is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or that event on the prices of the financial instruments. The test therefore requires issuers to form a judgment on the likelihood of the
circumstances taking place and whether there is sufficient certainty as to what will happen to enable the effect of the information to be measured.

Central to the operation of the “inside information” test is the issue of price sensitivity. In determining the likely price significance of information, Article 7(4) MAR states that an issuer should consider whether it is information that a reasonable investor would be likely to use as part of the basis of his or her investment decisions.

Note that MAR extends the scope of the market abuse regime by providing specific definitions of inside information for commodity derivatives, emissions allowances and for persons charged with the execution of orders concerning financial instruments (and derivative instruments in relation to such products).

  • Timing of disclosure

Subject to a very limited ability to delay disclosure, MAR provides that any required announcement must be made “as soon as possible”.

The FCA has reiterated the need for company directors to consider their general disclosure obligations (under Article 17(1) MAR) as regards to any potential inside information arising out of such regular monitoring of, for example, their companies’ cash flow position, available bank or finance facilities, and covenant compliance. When changes in the company’s circumstances are under consideration, a listed company should also consider consulting its financial advisers as early as possible.

Note that the FCA is not likely to regard the inability physically to convene a full board meeting as justifying a delay in releasing inside information. Most issuers can delegate authority to make “emergency” announcements to a small number of directors, who can quickly agree a course of action during a telephone meeting. Where an issuer is faced with an unexpected event, it may be able to issue a holding announcement.

  • Publication on an issuer's website (Article 17(1) MAR)

The general disclosure obligation under Article 17(1) MAR requires that an issuer must, for a period of five years following publication, post on its website all inside information that it is required to disclose publically. ESMA's Final Report on the draft technical standards states that all information to be published on a website must appear in an "easily identifiable section of the website". The Law Society has clarified that issuers can comply with the requirement by posting the
information on the section of their website that contains all of the regulatory information.3

Under Article 17(10) MAR, ESMA is tasked with developing technical standards on the public disclosure of information which will be submitted to the Commission for eventual adoption. These draft standards are likely to provide further technical information regarding the publication of information on an issuer's website. ESMA published its Final Report on the draft technical standards on 28 September 2015 and it is currently with the Commission for approval.

iii. Delaying Disclosure +

Under Article 17(4) MAR an issuer may delay public disclosure of inside information provided that:

  • immediate disclosure is likely to prejudice the legitimate interests of the issuer;
  • delay of disclosure is not likely to mislead public; and
  • the issuer is able to ensure the confidentiality of the information.

MAR introduces a further requirement that an issuer must notify the FCA in writing of its decision to delay an announcement immediately after the information is disclosed to the public. The notification is made using an online form and must contain certain prescribed information such as the date and time of the decision to delay disclosure and the identities of the people responsible for making that decision. The draft technical standards published by ESMA also set out the requirements for the internal records that an issuer must maintain when delaying disclosure. MAR also requires issuers to provide a written explanation of the decision to delay but currently the FCA proposes that this information will only need to be provided upon request. In any event, it is essential that issuers keep clear and comprehensive records of any decisions to delay disclosure of inside information.

Whilst accepting that “delaying disclosure of inside information will not always mislead the public”, the FCA has emphasised that developing situations should be monitored in case a disclosure is required if circumstances change.

In applying Article 17(4) MAR, legitimate interests may, in particular, relate to the following non-exhaustive circumstances:

  • negotiations in course or related elements where the outcome or normal pattern of these negotiations would be likely to be affected by public disclosure. In particular, where the issuer’s financial viability is in grave and imminent danger (although not within the scope of insolvency law), public disclosure of the information may be delayed for a limited time where public disclosure would seriously jeopardise the shareholders’ interests by undermining the conclusion of specific negotiations designed to ensure the issuer’s long-term financial recovery (note that this does not allow an issuer to delay public
    disclosure of the fact that it is in financial difficulty or of its worsening financial condition but is limited to the fact or substance of the negotiations to deal with such a situation);
  • with regard to dual-board structures only, decisions taken or contracts made by the issuer’s management body that need approval of one of the issuer’s other bodies to become effective, where the organisation of the issuer requires separation between these bodies, provided that a public disclosure of information before approval, together with the simultaneous announcement that this approval is still pending, would jeopardise the public’s correct assessment of the information (as UK companies typically have a unitary-board structure, this limb is of little use in the UK); and
  • where the company or a member of its group has been in receipt of liquidity support by the Bank of England or by another central bank4.

Under Article 17(11) MAR, ESMA has published its final report dated 28 September 2015 on the guidance on the legitimate interests of issuers to delay inside information. In addition to the scenarios detailed above ESMA has also identified in its final guidance the following situations as ones in which the legitimate interests of the issuer could be prejudiced by the disclosure of information to the public:

  • where the issuer has developed a product or invention and the immediate public disclosure of such information may jeopardise the rights of the issuer;
  • where the issuer is planning to buy or sell a major holding in another entity and the disclosure of such information would jeopardise the conclusion of the transaction; and
  • where a transaction previously announced is subject to a public authority's approval, and such approval is conditional on additional requirements, where the immediate disclosure of those requirements will likely affect the ability for the issuer to meet them and therefore prevent the final success of the transaction.

ESMA has issued a non-exhaustive indicative list of the situations in which delay of disclosure of insider information is likely to mislead the public namely, where the inside information whose disclosure the issuer intends to delay is:

  • different from the previous public announcement of the issuer on the matter to which the inside information refers to; or
  • regards the fact the issuer's financial objectives are not likely to be met, where such objectives were previously publicly
    announced; or
  • in contrast with the market's expectations, where such expectations are based on signals that the issuer has previously
    sent to the market, such as interviews, road shows or any other type of communication organised by the issuer or with its

In any of these circumstances, immediate and appropriate disclosure is always necessary and mandatory however, as stated in the ESMA guidelines, there will be other circumstances where delay in disclosure would mislead the public.

The guidance given by the FCA is that a company should not be obliged to disclose “impending developments” that could be jeopardised by premature disclosure. Whether or not a company has a legitimate interest that would be prejudiced by the disclosure of certain inside information is an assessment which must be made by the company in the first instance. However, the FCA considers that other than in relation to “impending developments” or matters described above, there are unlikely to be other circumstances where delay would be justified. In November 2015, the FCA proposed removing this assertion in order to clarify that issuers could have a legitimate reason to delay disclosure in other situations. Whatever the rationale, where an issuer decides to delay disclosure, it
should follow the steps set out below.

In summary, and as a matter of good practice, an issuer considering delaying disclosure should:

  • satisfy itself that the negotiations or impending developments would be likely to be prejudiced
  • satisfy itself that nondisclosure would not be likely to mislead the market;
  • confirm that recipients of the inside information owe a duty of confidentiality to the issuer;
  • prepare an internal form which details why the delay is legitimate;
  • prepare a notification to the FCA in the prescribed form stating that it is delaying disclosure;
  • monitor leaks and other changes in circumstances to determine whether an obligation to make an announcement has been triggered; and
  • prepare a holding announcement for immediate release in the event of an actual or likely breach of confidentiality.
iv. Liquidity Support +

Article 17(5) MAR states that it may be appropriate to allow the delay of the disclosure of inside information by credit or financialinstitutions in order to preserve the stability of the financial system. The disclosure of inside information, including information which is related to a temporary liquidity problem and, in particular, the need to receive temporary liquidity assistance from a central bank or lender of last resort, may be delayed provided that:

  • the disclosure of the inside information entails a risk of undermining the financial stability of the issuer and of the financial system;
  • it is in the public interest to delay the disclosure;
  • the confidentiality of that information can be ensured; and
  • the FCA has consented to the delay on the basis that the three conditions above are met.

The FCA will ensure that the disclosure is only delayed for a period as is necessary in the public interest and it shall evaluate, at least on a weekly basis, where the conditions above are satisfied. However, in the event of any leak of such information, an immediate disclosure would be required.

v. Selective Disclosure +
Article 17(8) MAR allows selective disclosure of inside information where the recipient owes a duty of confidentiality to the company. Under MAR, unless a company is delaying disclosure in accordance with Article 17(4), it must ensure that no inside information is released. If it is released to a third party in the normal course of the exercise of an employment, profession or duties, the issuer must announce that information publically either simultaneously where the disclosure was intentional or as soon as possible where the disclosure was unintentional. Issuers should bear in mind that the wider the group of recipients of inside information, the greater the likelihood of a leak, which would then trigger an announcement.
vi. Dealing with Market Rumours +

Under article 17(7) MAR, where there is press speculation or market rumour concerning an issuer, the issuer should assess whether its general obligation to make an announcement has arisen. To do this, the issuer needs to assess carefully whether the speculation or rumour has given rise to a situation where the issuer has inside information.

If the press speculation or market rumour is largely accurate and the information underlying the rumour is inside information, then it is likely that the issuer can no longer delay disclosure pursuant to Article 17(4) MAR, as it can no longer ensure confidentiality of the inside information, and it should announce the inside information as soon as possible (Article 17(7) MAR).

Conversely, the knowledge that the press speculation or market rumour is false is not likely to amount to inside information. However, the FCA has previously informally acknowledged that there is a possibility that the issuer’s knowledge that a particular piece of information or story is false could, in very limited circumstances, amount to inside information. Even if it does, the FCA expects in most cases that an issuer would be able to delay disclosure (often indefinitely) in accordance with the standard set by Article 17(4) MAR.

The FCA does not usually require an issuer to make a negative statement denying a wholly unfounded rumour. If the issuer does decide to make such a denial, it should consider doing so by making a formal announcement, and where a denial is likely to affect the share price, then a formal announcement would be best practice. The FCA also suggests that an issuer should announce a negative statement over a RIS in circumstances where it is concerned that reaction to a wholly unfounded rumour is resulting in a disorderly market.

The FCA is, of course, likely to contact an issuer or its advisers if there are rumours relating to it in the media, and it will expect a full justification for the issuer’s proposed course of action and confirmation of the issuer’s true position so that it can monitor developments properly.

vii. Insider Lists +
Since the entry into force of MAR on 3 July 2016, AIM companies must also comply with the rules governing the adoption and maintenance of insider lists, contained within Article 18 MAR.

Under Article 18(1) MAR issuers must compile lists of all persons who have access to inside information and who are working for them either (i) under a contract of employment or (ii) otherwise performing tasks through which they have access to inside information i.e as advisors, accountants or credit rating agencies. Insider lists must be provided to the competent authority as soon as possible on request.

Under MAR, the requirements for the information to be included on the insider lists are more onerous than before. Now, the insider list must include, amongst other things, the dates and times on which access to the inside information was obtained, full names, National Identification Numbers, phone numbers and addresses of individuals.

The insider list must be updated promptly where the reason for including an individual on the list changes, where a new individual needs to be added to the list or where a person ceases to have access to inside information, and each update to the list shall specify the date and time when the change triggering the update occurred.

Issuers or any person acting on their behalf or on their account, shall take all reasonable steps to ensure that any person on the insider list acknowledges in writing the legal and regulatory duties entailed and is aware of the sanctions applicable to insider dealing and unlawful disclosure of insider information. In circumstances where another person acts on behalf of the issuer to draw up and update the insider list, the issuer remains responsible for complying with Article 18 MAR.

Insider lists need to be kept by issuers, or any person acting on their account or behalf, for a period of at least five years from the date on which they are drawn up or updated.

If, under MiFID II which is expected to enter into force in January 2018, AIM becomes a designated SME Growth Market, AIM companies will benefit from an exemption from the requirement to draw up insider lists. However, AIM is currently not defined as an SME growth market and therefore AIM companies must comply with Article 18 MAR.

B. Specific Disclosure Obligations Under AIM Rules

i. Miscellaneous Information (AR 17) +

An issuer must notify a RIS without delay of:

  • any deals by directors6;
  • any changes to the holding of a significant shareholder (3 percent holder) that increase
    or decrease such holding through a single percentage106;
  • the resignation, dismissal or appointment of any director;
  • any change in its accounting reference date;
  • any material change between its actual trading performance or financial condition and any profit forecast, estimate or projection included in its admission document or otherwise made public on its behalf;
  • any decision to make any payment in respect of its AIM securities;
  • the reason for the application for admission or cancellation of any AIM securities;
  • the resignation, dismissal or appointment of its nominated adviser or broker;
  • any change in the AIM company’s legal name or registered office;
  • the occurrence and number of shares taken into and out of treasury;
  • any change in the website address at which information required by AIM Rule 26 (see paragraph v below) is available;
  • any subsequent change to certain details disclosed in respect of a director; and
  • the admission to trading (or cancellation from trading) of the AIM securities (or any other securities issued by the relevant AIM company) on any other exchange or trading platform, where such admission or cancellation is at the application or with the agreement of the AIM company.

Note that following MAR coming into force, AIM Rule 17 no longer requires the disclosure of deals by directors. This is because Article 19(1) MAR requires PMDRs and PCAs to notify both the issuer and the FCA of every transaction conducted by them relating to the shares or debt instruments of the issuer or to derivatives or other financial instruments linked to them. As a result of MAR coming into force, the key differences for AIM companies are the following:

  • MAR obligations apply to all PMDRs and PCAs, not just directors;
  • MAR only requires disclosure of dealings above an annual de minimis threshold of €5,000; and
  • disclosure under MAR must be made in the form of a prescribed template.
  • director’s remuneration earned in respect of the financial year by each director of the AIM company acting in such capacity
    during the financial year.
ii. Half-Yearly Reports (AR 18) +
An AIM company must prepare a half-yearly report in respect of the six-month period from the end of the financial period for which financial information has been disclosed in its admission document and at least every subsequent six months thereafter (apart from the final period of six months preceding its accounting reference date for its annual audited accounts). All such reports must be notified to a RIS without delay and in any event no later than three months after the end of the relevant period. The information contained in a half-yearly report must include at least a balance sheet, income statement and cash flow statement and must contain comparative figures for the corresponding period in the preceding financial year. The report must also be presented and prepared in a form consistent with that which will be adopted in the company’s annual accounts, having regard to the applicable accounting standards. The Guidance Notes in the AIM Rules state that when the half-yearly report has been audited, it must contain a statement to this effect.

iii. Annual Accounts (AR 19) +
An AIM company must publish annual audited accounts that must be sent to the holders of its AIM securities without delay and in any event no later than six months after the end of the financial period to which they relate. An AIM company incorporated in an EEA State must prepare its accounts in accordance with IAS. An AIM company incorporated in a non-EEA State may prepare its accounts in accordance with IAS, US GAAP, Canadian GAAP, Australian IFRS or Japanese GAAP.

These accounts must disclose:

  • any transaction with a related party, whether or not previously disclosed under the AIM Rules, where any of the class tests (see below) exceed 0.25 percent, and must specify the identity of the related party and the consideration for the transaction; and
  • director’s remuneration earned in respect of the financial year by each director of the AIM company acting in such capacity during the financial year.
iv. Publication of Documents Sent to Shareholders (AR 20) +
Any document provided by an AIM company to its shareholders must be made available on its website, and this must be publicised. An electronic copy of the relevant document must also be sent to the London Stock Exchange.

v. Company Information Disclosure (AR 26) +
An AIM company must, from admission, maintain a website on which the following information should be made available free of charge:

  • a description of its business and, where it is an investing company, its investing policy and details of any investment manager and/or key personnel;
  • the names of its directors and brief biographical details of each;
  • a description of the responsibilities of the members of the board and details of any board committees and their responsibilities;
  • its country of incorporation and main country of operation7;
  • where the AIM company is not incorporated in the UK, a statement that the rights of shareholders may be different from the rights of shareholders in the UK-incorporated company;
  • its current constitutional documents;
  • details of any other exchanges or trading platforms on which it has applied or agreed to have any of its securities admitted or traded;
  • the number of AIM securities in issue and, insofar as it is aware, the percentage of AIM securities that are not in public hands, together with the identity and percentage holdings of its significant shareholders​8;
  • details of any restrictions on the transfer of its AIM securities;
  • its most recent annual report and all half-yearly, quarterly or similar reports published since the last annual report;
  • all announcements that it has made in the past 12 months;
  • its most recent admission document, together with any circulars or similar publications sent to shareholders within the past 12 months; and
  • details of its nominated adviser and other key advisers.

The guidance to the AIM Rules requires this information to be kept up to date, with details of the last date on which it was updated to be included. AIM companies will need to take appropriate legal advice on how to make available any admission documents, circulars or other shareholder publications so as not to infringe any securities laws (e.g., US securities laws) that may apply to them (e.g., by the use of “click-throughs” or appropriate legends).

Guidance on how to comply with AIM Rule 26 is available via the IR Website Best Practice Guide, which was compiled by RNS (the regulatory and financial news service of the London Stock Exchange). The guide also includes access to web templates that can be used as the basis for AIM companies to build a Rule 26-compliant website.

D. Corporate Transactions

i. Substantial Transactions (AR 12) +
An AIM company must notify a RIS without delay as soon as the terms of any substantial transaction are agreed. A “substantial transaction” is one that exceeds 10 percent in any of the class tests specified in Schedule 3 to the AIM Rules, save for any transactions of a revenue nature in the ordinary course of business and transactions to raise finance that do not involve a change in the fixed assets of the AIM company or its subsidiaries. As is the case on the Main Market, each class test involves a comparison between the size of the transaction (or the target of the transaction (as applicable)) and the AIM company9.
ii. Related Party Transactions (AR 13) +
This rule applies to any transaction whatsoever with a related party that exceeds 5 percent in any of the class tests specified under “Substantial Transactions” above.

An AIM company must notify a RIS without delay as soon as the terms of a transaction with a related party are agreed. The announcement is required to include the details specified by Schedule 4 to the AIM Rules and a statement that with the exception of any director who is involved in the transaction as a related party, its directors, having consulted with its nomad, consider that the terms of the transaction are fair and reasonable insofar as the holders of its AIM securities are concerned.

iii. Reverse Takeovers (AR 14) +
A “reverse takeover” is an acquisition or acquisitions in a 12-month period that for an AIM company would:

  • exceed 100 percent in any of the class tests;
  • result in a fundamental change in its business, board or voting control; or
  • in the case of an investing company, depart materially from its investing policy as stated in its admission document or approved by shareholders in accordance with the AIM Rules.

Any agreement that would effect a reverse takeover must be:

  • conditional on the consent of the holders of its AIM securities being given in general meeting;
  • notified to a RIS without delay, disclosing the information specified in Schedule 4 of the AIM Rules and, insofar as it is with a related party, the additional information stated above under “Related Party Transactions”; and
  • accompanied by the publication of an admission document in respect of the proposed enlarged entity and convening the general meeting. 

Where shareholder approval is given for the reverse takeover, trading in the AIM securities of the AIM company will be cancelled. If the enlarged entity seeks admission, it must make an application in the same manner as any other applicant applying for admission of its securities for the first time.

iv. Disposals Resulting in a Fundamental Change of Business (AR 15) +
Any disposal by an AIM company that, when aggregated with any other disposal or disposals over the previous 12 months, exceeds 75 percent in any of the class tests is deemed to be a disposal resulting in a fundamental change of business and must be:

  • conditional on the consent of its shareholders being given in general meeting;
  • notified to a RIS without delay, disclosing the information specified by Schedule 4 of the AIM Rules (see below) and, insofar as it is with a related party, the additional information stated under “Related Party Transactions” above; and
  • accompanied by the publication of a circular containing the information specified above and convening the general meeting.

Where the effect of the disposal is to divest the AIM company of all, or substantially all, of its trading-business activities, or assets and/or where an AIM company takes any action, the effect of which is that it will cease to own, control or conduct all, or substantially all, of its existing trading-business, activities or assets upon completion of the disposal or action, the AIM company will be considered an "AIM Rule 15 cash shell."

Within six months of becoming an AIM Rule 15 cash shell, the AIM company must make an acquisition or acquisitions which constitute a reverse takeover under Rule 14. For the purposes of this Rule only, becoming an investing company pursuant to Rule 8 (including the associated raising of funds as specified in Rule 8) will be treated as a reverse takeover and the provisions of Rule 14 will apply.

Where an AIM company became an "investing company" (pursuant to Rule 15) prior to 1 January 2016, the requirements of Rule 15 set out in the AIM Rules for Companies (May 2014) will continue to apply. Accordingly, if such a company does not make an acquisition or acquisitions that constitute a reverse takeover under Rule 14 or otherwise fails to implement its investing policy to the satisfaction of the London Stock Exchange within twelve months of becoming an investing company, the London Stock Exchange will suspend trading in such a company's securities pursuant to Rule 40.

v. Aggregation of Transactions +
Transactions completed during the prior 12 months must be aggregated for the purposes of determining whether AIM Rule 12, 13, 14 or 19 applies where they are entered into by the AIM company with the same person or persons or their families; where they involve the acquisition or disposal of securities or an interest in one particular business; or where together they lead to a principal involvement in any business activity that did not previously form a part of the AIM company’s principal activities.

E. Contents Of Announcement (Schedule 4)

The details that must be announced pursuant to AIM Rules 12, 13, 14 and 15 in the event of any of the transactions referred to above are as follows:

  • particulars of the transaction, including the names of any other parties, where relevant;
  • a description of the assets that are the subject of the transaction or the business carried on by, or using, the assets that are the subject of the transaction;
  • the profits attributable to those assets, if different from the consideration;
  • the value of those assets;
  • the full consideration and how it is being satisfied;
  • the effect on the AIM company;
  • details of the service contracts of any proposed directors;
  • in the case of a disposal, the application of any sale proceeds;
  • in the case of a disposal, if shares or other securities are to form part of the consideration received, a statement whether such securities are to be sold or retained; and
  • any other information necessary to enable investors to evaluate the effect of the transaction upon the AIM company.

F. Breach And Enforcement

i. Companies +
Pursuant to the procedures set out in the AIM Disciplinary Procedures and Appeals Handbook, if the London Stock Exchange considers that a company has contravened the AIM Rules, it may take one or more of the following measures (AR 42):

  • issue the company a warning notice;
  • fine or censure the company;
  • publish the fact that the company has been fined or censured and the reasons for that action; or
  • cancel the admission of the company’s AIM securities.
ii. Nomads +
Pursuant to the procedures set out in the AIM Disciplinary Procedures and Appeals Handbook, if the London Stock Exchange considers that a nomad is in breach of its responsibilities under the AIM Rules or the Nomad Rules or that the integrity and reputation of AIM has been or may be impaired as a result of the nomad’s conduct or judgment, it may take one or more of the following actions:

  • issue a warning notice;
  • fine or censure the nomad;
  • remove the nomad from the register; or
  • publish the action it has taken and the reasons for that action.
iii. Recent Enforcement +
The London Stock Exchange actively monitors compliance with the AIM Rules for Companies and the AIM Rules for Nominated Advisers and takes action where companies or nomads breach those rules. The London Stock Exchange can issue both public and private censures, though the former are reserved for the most serious cases, generally involving significant market impact.

Renewed focus has been placed on rules relating to the timing and accuracy of disclosures and proper consultation with nomads. In particular, the London Stock Exchange has repeatedly drawn attention to breaches of AIM Rule 10 (Principles of Disclosure), AIM Rule 11 (General Disclosure of Price-Sensitive Information) and AIM Rule 31 (Responsibility for Compliance).

The London Stock Exchange publishes full details of all AIM disciplinary notices on its website.