Key changes to the AIM Rules
Following on from last year’s discussion paper and the subsequent consultation on changes to the AIM Rules, the details of which were discussed in our November 2017 Public Company Update, the Exchange has proceeded to make a number of amendments to the AIM Rules for Companies and the AIM Rules for Nominated Advisers, the details of which are set out in AIM Notice 50.
Formalisation of the early notification process
With effect from 30 March 2018, Nomads are now required to enter into confidential discussions with the Exchange early in the listing process in order to highlight atypical features or potential issues that may be of concern to the Exchange in connection with a potential AIM applicant.
The revised AIM Rules for Nominated Advisers at Schedule Three sets out a non-exhaustive list of matters entitled “Guidance to Admission Responsibilities” any of which could potentially mean that an applicant’s appropriateness for AIM is questionable. These matters include where there are questions as to the character, skills or experience of directors, where there are unusual corporate structures or the company owns assets via contractual arrangements rather than directly and the general appropriateness of the applicant for the public markets in the UK.
The early notification form asks basic questions which align to those Admission Responsibilities – so covers the applicant’s corporate structure, details of advisers to the transaction, qualifications to last audited accounts, target fund raise, anticipated free-float, details of all directors, applicable employees and significant shareholders, and a catch-all question as to whether there are “any other matters concerning the appropriateness of the applicant which may have the potential to be detrimental to the orderly operation, the reputation and/or integrity of AIM”.
The Nomad community’s general view, which we share, is that formalising the early notification process is a good move as it will help identify any potential red flags at an early stage thereby giving a better level of deal certainty. It is certainly preferable that queries the Exchange has arising from the form are known earlier on in the transaction so they can be dealt with or cleared in good time rather than nearer to Admission.
Corporate governance
With effect from 28 September 2018 it will be mandatory for AIM companies to adopt a corporate governance code and to explain how they comply (or where they do not do so, to explain why) against a recognised corporate governance code. This will replace the current regime which simply requires consideration of corporate governance as part of the appropriateness review and then disclosure of an issuer’s corporate governance regime.
AIM Rule 26 has accordingly been amended to require AIM companies’ websites to contain details of the governance code that the board has decided to apply, how the AIM company complies with that code, and where it departs from its chosen corporate governance code an explanation of the reasons for doing so. This information is required to be reviewed annually and the disclosure on the website must include the date on which this information was last reviewed.
New applicants to AIM from 30 March 2018 are required to state on their website which code they intend to follow but will otherwise have until 28 September 2018 to comply.
There is no list of “recognised corporate governance codes” but in reality for most issuers, perhaps with the exception of those which are incorporated and have a primary listing in jurisdictions other than the UK, the choice will be between the UK Corporate Governance Code published by the Financial Reporting Council and the QCA Corporate Governance Code published by the Quoted Companies Alliance. In fact AIM Notice 50 highlights both of those codes as examples.
For more information, please cotact Paul Arathoon.
Our thinking
Mark Howard
Charles Russell Speechlys advises Content+Cloud on the acquisition of award-winning service provider Azzure IT
Content+Cloud continues its growth journey, this is our 7th successful transaction for them.
Pei Li Kew
Pei Li Kew writes for Pharmacy Business on the link between pharmacy and IP
Pei Li Kew writes for Pharmacy Business on the link between pharmacy and IP
Mark Howard
Charles Russell Speechlys advises Acora on its acquisition of Secrutiny
Charles Russell Speechlys advises Acora on its acquisition of Secrutiny
Nick White
Charles Russell Speechlys advises Symphony Holdings Limited on the sale of its PONY trade mark portfolio for USD $28 million
Charles Russell Speechlys advises Symphony Holdings Limited on the sale of its PONY trade mark portfolio for USD $28 million.
Simon Ridpath
Simon Ridpath featured in the Lawyer’s Hot 100 list
Simon Ridpath features in The Lawyer’s Hot 100 list
Mark Howard
Charles Russell Speechlys advises Europa Oil & Gas (Holdings) plc on its £7m equity fundraising
Europa Oil and Gas is a renewable energy, oil and gas development and production company.
Simon Green
International Bar Association quotes Simon Green on the future of the legal sector in Hong Kong
International Bar Association quote Simon Green on the future of Hong Kong's legal sector
Patrick Chan
Corporate Treasurer publishes Patrick Chan's comments regarding the No Consent Regime
Corporate Treasurer publishes Patrick Chan's comments on the No Consent Regime
Jamie Cartwright
Jamie Cartwright comments on the potential impact of the plastic packaging tax
Jamie Cartwright comments on the potential impact of the plastic packaging tax
Rebecca Burford
Charles Russell Speechlys partners with the Crafty Counsel community
Crafty Counsel brings together in-house legal professionals to share their experiences.
Jonathan Morley
International Business Reports reported on the firm’s involvement advising Battery Ventures on the sale of Forterro to Partners Group for €1 billion
The firm has advised global, technology-focused investment firm Battery Ventures on the sale of Forterro to Partners Group for €1 billion.
David Hicks
David Hicks quoted by FT Adviser on why Succession sold up to Aviva
David Hicks explains that private equity backers have a time horizon for their investments.
Sarah Wigington
How will the new Economic Crime Levy impact residential development joint ventures?
The Economic Crime (Transparency and Enforcement) Bill is being created through Parliament this month.
Jonathan Morley
Charles Russell Speechlys is advising Battery Ventures on the sale of Forterro to Partners Group for €1 billion.
Battery Ventures is a the global, technology-focused investment firm.
David Coates
Charles Russell Speechlys advises on the acquisition of the Douglas & Gordon property sales business
Foxtons is a London listed property sales business.
Adrian Mayer
Charles Russell Speechlys advises AgDevCo on $70m of DFI Funding
AgDevCo is a specialist impact investor in African agribusinesses.
Mark Howard
International Business Reports cover the firm's involvement advising the shareholders of Zenkraft on the sale of the company to Bringg
The team was led by corporate partner Mark Howard, along with Helen Coward on tax and Mark Bailey on commercial technology aspects,
David Hicks
David Hicks, Robert Birchall and Sophie Dworetzsky write for FT Adviser on what business owners need to know when selling a business
The things business owners need to know when selling a business.
Mark Howard
Charles Russell Speechlys advises the shareholders of Zenkraft on the sale of the company to Bringg
Zenkraft is an award-winning technology company with locations in London and the US.
Mark Howard
Public Company Update: Winter 2021
Welcome to the Winter 2021 Public Company Update.