On 12 December 2016, AIM Regulation published its latest
"Inside AIM" update, regarding the interaction of social
media and a company's disclosure obligations under the AIM
Rules for Companies (the AIM Rules).
Social media may encompass a wide range of electronic
communications, such as Twitter, Facebook, LinkedIn, non-regulatory
news feeds and internet forums and a company's own website.
No substitute for an RIS
The update makes it clear that these forms of communication are
subject to the same rules regarding disclosure of information as
the more traditional methods. It points out that disclosure by
social media is not sufficient and will not meet a company's
disclosure obligations under the AIM Rules. Companies which are
admitted to trading on AIM should therefore continue to make
announcements via a regulatory information service (RIS).
AIM Rules 10 and 11 and conflicting statements
AIM Rules 10 (Principles of disclosure) and 11 (General
disclosure of price sensitive information) are important in
ensuring that there is equal, fair and timely disclosure of
regulatory information to the market. If statements made via social
media breach AIM Rules 10 and/or 11 (for example, if there has been
only premature, partial or selective disclosure), then AIM
Regulation may investigate and take disciplinary action. Similarly,
premature or selective disclosure via social media may also mean
that the Financial Conduct Authority could take action if there has
been a corresponding breach of the Market Abuse
Where statements have been made via social media which are
inconsistent with statements made via an RIS, AIM Regulation may
request that the company issues a statement via an RIS clarifying
AIM Rule 31 – sufficient procedures, resources and
AIM Rule 31 requires that a company traded on AIM must have in
place sufficient procedures, resources and controls in order to
enable it to comply with the AIM Rules. AIM Regulation states that
these procedures, resources and controls should also take into
account the use of social media and other forms of communication.
AIM Regulation therefore suggests that AIM companies should
consider the following:
Does the AIM company have a clear
policy on the use of social media as part of its existing
How effective is that policy in
practice, for example, how does the AIM company ensure that the
policy is read and understood by all relevant persons?
How regularly is the policy reviewed
and how does the AIM company identify and ensure the policy is
updated when necessary?
If an AIM company engages third
parties to disseminate regulatory information on its behalf
including via social media, how has it satisfied itself that the
third party will not compromise compliance with the AIM Rules?
In the context of an AIM
company's obligations under AIM Rules 10 and 31, what are its
protocols in talking to its nominated adviser in advance of the
release of information via social media?
Companies together with their nominated advisers should also
consider how they will keep their nominated adviser informed of the
company's social media updates, which may be important for a
nominated adviser in considering whether a false market is
developing in the company's securities.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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