AIM Regulation has published Issue 3 of Inside AIM focussing on
common themes raised by nomads. It includes guidance on:
AIM Rule 3 - working capital statements in admission
documents
Amendments and caveats are not permitted to the standard working
capital statement required to be included in admission
documents.
AIM Rule 10 and 11 - dealing with insiders
Regulatory information must not be published elsewhere before it is
formally notified by the AIM company. Nomads should monitor their
AIM clients' share prices and trading volumes especially when
there are forthcoming regulatory announcements of significant
events. Nomads should produce draft holding announcements in case
of a potential leak.
AIM Rule 13 - related party transactions
The strict wording of Rule 13 must be complied with when
directors are preparing a statement that the terms of the
transaction are "fair and reasonable". This statement
must be made without caveats. Nomads should consider whether a
transaction is fair and reasonable with a view to protecting
shareholders against the influence of a related party on the
company. The guidance makes clear that this is not the same as
concluding that a transaction represents the best deal that
possibly could be made, but does require nomads to consider all of
the reasonable options available to the company. If there are no
independent directors who can provide this statement, nomads should
contact AIM Regulation with an alternative; solutions may include a
statement by the nomad instead of the directors or shareholder
approval of the transaction. If directors are granted bonuses or
options which are not part of their standard remuneration package
or their packages are revised, these transactions will be caught by
Rule 13 if not within the usual remuneration parameters.
AIM Rule 14 - suspension on announcement or leak of a reverse takeover
The AIM Team confirms its position that once a reverse takeover
has been announced or leaked, an admission document must be
published on the enlarged entity, including audited financial
information on the target, to avoid suspension of the company's
shares. An AIM company will not be suspended if the target is on
the Main Market or on AIM.
Is the AIM Team bound by precedent?
The AIM Team deals with enquiries on a case by cases basis and
whilst previous decisions are considered to ensure consistency, the
merits of each case are considered separately. Nomads can make
reference to previous cases but should not assume that the outcome
will be the same in every case.
AIM Rule 15 - investing policies
An investing company must have as its primary business or objective the investing of its funds in securities, businesses or assets. Therefore if an investing company has a policy to develop organically into a trading company, this will fall foul of Rule 15 and the company should either make an acquisition(s) which constitutes a reverse takeover or cancel and seek re-admission as a new operating entity.
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.
