Important news for AIM companies

United Kingdom
It is important that the management of AIM companies and their advisers are aware of two issues concerning AIM rule book changes and the proposed Prospectus Directive.

AIM rule book changes

The London Stock Exchange has re-issued the AIM rule book for companies, incorporating four principal changes as follows:

  • Cancellations: A rule on cancellations, Rule 39, has been introduced. This requires the cancelling company to notify the intended date of cancellation at least 20 business days prior to the date of the intended cancellation.

  • Official List to AIM transfers: An additional requirement under Rule 2 and Schedule One has been added for listed applicants. Under these revised rules, at the time an officially listed company issues its "ten day announcement" (stating its intention to seek admission to AIM), it will be required to announce certain details about its strategy, working capital and general financial position.

  • Corporate Action Timetables: The guidance notes have been expanded to give greater clarity (see page 2-6 of the rule book).

  • Dissemination of price sensitive information: From the 2 April 2002 AIM companies will be able to choose whether to use the Exchange's RNS or one of the competing regulatory information service providers to make announcements required by the AIM rules. Various rules have been amended to allow for this element of choice.

The London Stock Exchange has declined to provide a mark-up of the new rule book to show exactly the changes that have been made but have assured us that no other substantive changes have been made.

If you would like to view the rule book, please see the London Stock Exchange's Website: www.londonstockexchange.com.

Proposed EC Prospectus Directive - the end of AIM as we know it?

The EU Commission has proposed a new directive on the contents of, and procedures concerning, the publication of a prospectus when securities are offered to the public or admitted to trading. The broad aim of the proposal is to create the conditions for an EU-wide single prospectus for companies wishing to raise money in more than one EU country.

Although commentators agree that the aims of the directive, to reduce costs for public companies raising money through the issue of shares on an EU-wide basis and to simplify regulatory compliance are laudable, there are strong concerns that unintended consequences of the proposal would be to:

  • Increase the cost and regulatory burden on Small Quoted Companies (SQCs) with the requirement for an annual registration document;
  • Increase the cost of raising capital for SQCs currently using lighter regulated markets such as AIM; and
  • impose a 'one-size-fits-all' regime that threatens the existence of more lightly-regulated markets that are attractive to smaller companies looking for an IPO at lower cost.
The Quoted Companies Alliance (the "QCA") is an organisation that promotes the cause of SQCs. It is campaigning vigorously to ensure that the specific concerns and needs of SQCs are properly taken account of.

You can find out more about the QCA's responses to the Prospectus Directive by visiting the QCA's website (www.qcanet.co.uk). We believe that all SQCs should share the QCA's concerns. The QCA's advice is that the European Commission is unlikely to be receptive to lobbying. It believes, however, that the European Parliament may be more sympathetic and is therefore urging all SQCs and their advisers to write to their local MEP and indeed to encourage any subsidiaries or branches in any other member states to lobby likewise. A list of EU wide MEPs can be found at www.europarl.eu.int.

To find out more about the possible consequences of the new Prospectus Directive please contact the following CMS Cameron McKenna corporate partners:

John Burton, corporate partner

Phone: +44 6367 2138

Email: john.burton@cms-cmck.com

Peter Smith, corporate partner

Phone: +44 6367 2816

Email: peter.smith@cms-cmck.com