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Changes to the AIM rules for Companies

22 May 2014


On 13 May 2014, following a consultation earlier this year, the London Stock Exchange issued AIM Notice 39 together with revised editions of the AIM Rules for Companies and the AIM Rules for Nominated Advisers (which were last updated in February 2010) and consequential changes to the AIM Disciplinary Procedures and Appeals Handbook.

To view the notice and amendments to the rules and handbook click here.

Although many of the changes are of an administrative or clarificatory nature, although there are some more substantive changes.

This briefing examines the substantive changes to the AIM Rules for Companies and some of the issues arising from those changes.

Rule 11 (general disclosure of price sensitive information)

Previously a company was required to notify the market of any changes to its financial condition, its sphere of activity, the performance of its business or its expected performance, which if made public would be likely to lead to a "substantial" movement in the share price.

The LSE has amended the rule to clarify that the items above are not an exhaustive list of circumstances but are examples only.

It has also replaced "substantial" movement with "significant" movement in order to align the terminology with that used in the Financial Services and Markets Act 2000 ("FSMA").

The LSE does not believe this changes the standard of disclosure for AIM companies. 

However, in our view, the proposed change - which requires disclosure of developments which if made public would be likely "to lead to" a significant movement in price - may be construed as a different test and, possibly, one that is wider in scope than that in section 118C of FSMA, which requires such developments "to have" a significant effect on price.

Rule 18 (half yearly reports)

The requirement for half yearly reports to contain comparative figures for the corresponding period in the previous financial year has been amended so that the balance sheet may instead contain comparative figures from the last balance sheet notified to the market.

Rule 26 (company information disclosure)

In addition to the information already required to be disclosed on a company's website, the following will also need to be disclosed:

  • details of its corporate governance code, how it complies with that code, or if no code has been adopted a statement to that effect together with details of its current corporate governance arrangements
  • confirmation of whether it is subject to the Takeover Code, or any other similar legislation or code in its country of incorporation or operation, or any other similar provisions it has voluntarily adopted
  • its annual accounts published for the last 3 years or since admission, whichever is the lesser period (as opposed to the current requirement to include its most recent annual report/accounts), and
  • the date on which the details of its significant shareholders was last updated.

The first point, whilst welcome in terms of greater transparency, does not explicitly set out what is meant by requiring a company to confirm "how it complies with the code".

For example, should a company state how it has complied with that code previously or should it disclose how it communicates compliance with the code to shareholders (for example, by making a corporate governance statement in its annual report)?

The second point follows last year's changes to the Takeover Code which made all companies incorporated in the UK, the Channel Islands or the Isle of Man which have their shares traded on AIM subject to the Takeover Code.

The proposed change to the AIM Rules is a welcome addition providing clarity as to which regime an AIM-listed company is subject.


There are a number of useful changes which add clarity and provide better transparency for investors, albeit there are a few areas where the language could be improved and proposals tightened.

The new changes came into effect on 13 May 2014, save for the new requirements under Rule 26 which companies must implement by 11 August 2014. AIM companies should therefore review their websites to ensure that they comply with the new disclosure requirements by this date.

One area which has not been addressed in the proposed changes is the requirement for relationship agreements for AIM companies, which are intended to ensure that a company can operate independently of its controlling shareholder(s).

The FCA has proposed changes to the Listing Rules which would make a relationship agreement mandatory for Premium Listed companies where a controlling shareholder and its concert parties hold 30% or more in the company.

Currently there is no requirement under the AIM Rules for relationship agreements to be put in place for AIM companies.

However, many companies do have such agreements in force (often driven by the Nomad). We have also heard anecdotally that the AIM team have, in some situations, insisted on companies putting a relationship agreement in place.

In the absence of any specific rules, this can be a difficult area to advise on and many Nomads and other advisers would welcome some further guidance on this important issue.

This article was written by Jaspal Sekhon.

For further information please contact Jaspal Sekhon on +44 (0)20 7427 1055 or jaspal.sekhon@crsblaw.com