The London Stock Exchange is consulting on amendments to the AIM Rules for Companies (AIM Rules) and the AIM Rules for Nominated Advisers (Nomad Rules).
AIM Notice 381 sets out the proposed amendments which improve and clarify the AIM Rules and the Nomad Rules. One of the proposed substantive changes is a new requirement for AIM companies to disclose the "details of the corporate governance code that the AIM company has decided to apply, how the AIM company complies with that code, or if no code has been adopted this should be stated" (draft AIM Rule 26).
This requirement brings the AIM Rules in line with the requirement under the Listing Rules in relation to the application of the UK Corporate Governance Code (the Code) by companies with a premium listing of equity shares (LR 9.8.6R). We welcome and fully support this proposal. It is something we as members of the Quoted Companies Alliance (QCA) corporate governance expert group have been suggesting to the LSE for some time. The new disclosure requirement will further encourage boards of AIM companies which do not already comply with the Code or the Corporate Governance Code for Small and Mid-Size Quoted Companies published by the QCA (the most recent version of which was released in May 2013 as reported in our May 2013 update) to think about the right corporate governance policy which fits the needs of their business. This is also good news for the recent regulatory initiatives to improve the quality of narrative reporting.
The consultation closes on 3 March 2014 and the new rules are expected to come into effect during 2014.
Footnote
1 AIM Notice 38 and the text of the consultation are available at http://www.londonstockexchange.com/companies-and-advisors/aim/advisers/aim-notices/aimnotice38.pdf.
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