Our Corporate Finance and Legal Expert Groups contributed to our response to AIM Notice 44 – Consultation on proposed changes to AIM Rules for Companies. We welcomed the London Stock Exchange’s initiative to consult on changes to the AIM Rules for Companies in advance of the Market Abuse Regulation (MAR) coming into effect on 3 July 2016.
We noted our concern that Rule 11 as drafted may put AIM companies in a conflicted position due to the similarities of scope of this rule and Article 17 of MAR. If Rule 11 is wider in scope than Article 17 of MAR, that will be burdensome and present uncertainties to small and mid-size quoted companies. We suggested that, if AIM Regulation is to retain Rule 11, then it should, through FAQs, give one or more examples of a circumstance in which an announcement is required under AIM, but not MAR. If such examples are not identified so that they can be understood by small and mid-size quoted companies and their advisers, we noted that Rule 11 should not be retained once MAR comes into force.
We supported the deletion of the current Rule 17 requirement to disclose directors' dealings and to signpost an AIM company's obligations under Article 19 of MAR in the new guidance to Rule 17 as the new legal requirement means that there is no longer a need for a specific market rule.
We agreed with AIM Regulation's approach to remove existing provisions of Rule 21 along with the associated definitions of "deal" and "unpublished price sensitive information" contained in the glossary, as this would conflict with MAR's provisions imposing a legal prohibition on trading during close periods and exemptions to those prohibitions. However, we suggested substituting the use of "director" and "applicable employee" with the MAR definition of "person discharging management responsibility", to further facilitate the harmonisation and, subsequently, compliance of AIM Regulation and MAR requirements by small and mid-size quoted companies.
With regards to the preliminary statement of annual accounts, we supported AIM Regulation's approach of only considering making changes to the AIM Rules or issuing further guidance once ESMA or the European Commission clarify whether an issuer will be able to end its close period through the publication of preliminary statements of annual accounts under MAR.
