QCA Response to London Stock Exchange - AIM Rulebooks consultation

29th January 2018

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We responded to London Stock Exchange's consultation on its proposed changes to the AIM Rules for Companies and AIM Rules for Nominated Advisers.

We welcomed the proposed changes to AIM Rule 26 to require AIM companies to disclose details of a recognised corporate governance code that the board of directors has chosen to apply, as well as how the company complies with the code. We commented that these changes would maintain an AIM company's flexibility to apply the governance arrangements suited to its needs, while also enabling investors and other stakeholders to benchmark the company’s corporate governance arrangements. We did however suggest that AIM Rule 26 specify that an AIM company issue a statement on its website on at least an annual basis, stating which recognised corporate governance code it follows along with the date on which the statement was last updated.

We supported the proposed introduction of a non-exhaustive list of examples of factors to be taken into account by nominated advisors when assessing appropriateness for AIM, as this would provide extra clarity for market participants.

We also supported the proposed changes to AIM Rule 2 introducing a formal requirement for early notification. We commented that that this would help reduce the number of cases whereby obstacles to admission have not been identified until after a prospective applicant has incurred significant costs ahead of a proposed admission. 

However, we noted that the proposed changes implied one-way disclosure to AIM without outlining how AIM Regulation will assess and respond to the information provided. We therefore encouraged AIM to be clearer in stating what the outcome of disclosures will be.

We welcomed London Stock Exchange’s decision not to take forward proposals at this stage relating to prescriptive criteria regarding free float, a minimum fund raise upon admission for AIM applicants and automatic fines for certain breaches of the AIM Rules as none of these measures would have benefited smaller companies looking to list on AIM.

Click here to download our response (pdf)

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