The Gowling WLG AIM Handbook

Introduction

AIM opened on 19 June 1995. AIM is a market for smaller and growing companies and is a UK multilateral trading facility within the meaning set out in the Handbook of the FCA and is a SME growth market. AIM is operated and regulated by the Exchange in its capacity as a Recognised Investment Exchange under Part XVIII of FSMA 2000, as such AIM is a prescribed market under FSMA 2000.

This document contains the AIM Rules for Companies ("these rules") which set out the rules and responsibilities in relation to AIM companies. Defined terms are in bold and definitions can be found in the Glossary.

AIM companies also need to comply with any relevant national law and regulation as well as certain standards and regulations where applicable, such as MAR, the DTR, the Prospectus Regulation and the Prospectus Rules.

From time to time the Exchange issues separate Notes on specific issues which may affect certain AIM companies. The Notes form part of these rules.

Where an AIM company has concerns about the interpretation of these rules, it should consult its nominated adviser.

The rules relating to the eligibility, responsibilities and disciplining of nominated advisers are set out in the separate rulebook, AIM Rules for Nominated Advisers.

The procedures relating to disciplinary and appeals matters are set out in the Disciplinary Procedures and Appeals Handbook.

The rules for trading AIM securities are set out in "Rules of the London Stock Exchange".

Part One – AIM Rules

Retention and role of a nominated adviser

1. In order to be eligible for AIM, an applicant must appoint a nominated adviser and an AIM company must retain a nominated adviser at all times. 
   
   The nominated adviser is responsible to the Exchange for assessing the appropriateness of an applicant for AIM, or an existing AIM company when appointed as its nominated adviser, and for advising and guiding an AIM company on its responsibilities under these rules.
   
   The responsibilities of nominated advisers are set out in the AIM Rules for Nominated Advisers.
   
   If an AIM company ceases to have a nominated adviser the Exchange will suspend trading in its AIM securities. If within one month of that suspension the AIM company has failed to appoint a replacement nominated adviser, the admission of its AIM securities will be cancelled.

Applicants for AIM

Early notification and pre-admission announcement

2. An applicant's nominated adviser must submit an early notification to the Exchange, in the form prescribed from time to time, as soon as reasonably practicable and in any event prior to the submission of any Schedule One information.
   
   An applicant must provide the Exchange, at least ten business days before the expected date of admission to AIM, with the information specified by Schedule One. A quoted applicant must provide the Exchange, at least twenty business days before the expected date of admission to AIM, with the information specified in Schedule One and its supplement.
   
   If there are any changes to such information prior to admission, the applicant must advise the Exchange immediately by supplying details of such changes. Where, in the opinion of the Exchange, such changes result in the information being significantly different from that originally provided, the Exchange may delay the expected date of admission for a further ten business days (or twenty business days in the case of a quoted applicant).
   
   The Exchange will notify RNS of information it receives under this rule.

Admission document

3. An applicant must produce an admission document disclosing the information specified by Schedule Two.
   
   An applicant must take reasonable care to ensure that the information contained in the admission document is, to the best of the knowledge of the applicant, in accordance with the facts and contains no omission likely to affect the import of such information.
   
   A quoted applicant is not required to produce an admission document unless it is required to publish a Prospectus in relation to the issue of AIM securities which are the subject of admission.

Omissions from admission documents

4. The Exchange may authorise the omission of information from an admission document (other than a Prospectus) of an applicant where its nominated adviser confirms that:
   • the information is of minor importance only and not likely to influence assessment of the applicant's assets and liabilities, financial position, profits and losses and prospects; or
   • disclosure of that information would be seriously detrimental to the applicant and its omission would not be likely to mislead investors with regard to facts and circumstances necessary to form an informed assessment of the applicant's securities.

Application documents

5. At least three business days before the expected date of admission, an applicant must submit to the Exchange a completed application form and an electronic version of its admission document. These must be accompanied by the nominated adviser's declaration required by the AIM Rules for Nominated Advisers.
   
   At least three business days before the expected date of admission, a quoted applicant must submit to the Exchange an electronic version of its latest annual accounts and a completed application form. These must be accompanied by the nominated adviser's declaration required by the AIM Rules for Nominated Advisers.
   
   The AIM fee will be invoiced to the applicant and should be paid pursuant to rule 37.

Admission to AIM

6. Admission becomes effective only when the Exchange issues a dealing notice to that effect.

Special conditions for certain applicants

Lock-ins for new businesses

7. Where an applicant's main activity is a business which has not been independent and earning revenue for at least two years, it must ensure that all related parties and applicable employees as at the date of admission agree not to dispose of any interest in its securities for one year from the admission of its securities.
   
   This rule will not apply in the event of an intervening court order, the death of a party who has been subject to this rule or in respect of an acceptance of a takeover offer for the AIM company which is open to all shareholders.

Investing companies

8. Where the applicant is an investing company, a condition of its admission is that it raises a minimum of £6 million in cash via an equity fundraising on, or immediately before, admission.
   
   An investing company must state and follow an investing policy.
   
   An investing company must seek the prior consent of its shareholders in a general meeting for any material change to its investing policy.
   
   Where an investing company has not substantially implemented its investing policy within eighteen months of admission, it should seek the consent of its shareholders for its investing policy at its next annual general meeting and on an annual basis thereafter, until such time that its investing policy has been substantially implemented.

Other conditions

9. Where matters are brought to the attention of the Exchange which could affect an applicant's appropriateness for AIM, it may refuse an admission to AIM, delay an admission to AIM and/or make the admission of an applicant subject to special conditions. The Exchange will inform the applicant's nominated adviser and may notify RNS that it has asked the applicant and its nominated adviser to undertake further due diligence.
   
   Circumstances where the Exchange is likely to refuse an admission to AIM include where it considers that:
   • the applicant does not or will not comply with any special condition which the Exchange considers appropriate and of which the Exchange has informed the applicant's nominated adviser; or
   • the applicant's situation is such that admission may be detrimental to the orderly operation, the reputation and/or integrity of AIM.
     
     

Principles of disclosure

10. The information which is required by these rules must be notified by the AIM company no later than it is published elsewhere. An AIM company must retain a Regulatory Information Service provider to ensure that information can be notified as and when required.
    
    An AIM company must take reasonable care to ensure that any information it notifies is not misleading, false or deceptive and does not omit anything likely to affect the import of such information.
    
    It will be presumed that information notified to a Regulatory Information Service is required by these rules or other legal or regulatory requirement, unless otherwise designated.

General disclosure of price sensitive information

11. An AIM company must issue notification without delay of any new developments which are not public knowledge which, if made public, would be likely to lead to a significant movement in the price of its AIM securities. By way of example, this may include matters concerning a change in:
    • its financial condition;
    • its sphere of activity;
    • the performance of its business; or
    • its expectation of its performance

Disclosure of corporate transactions

Substantial transactions

12. A substantial transaction is one which exceeds 10% in any of the class tests. It includes any transaction by a subsidiary of the AIM company but excludes any transactions of a revenue nature in the ordinary course of business and transactions to raise finance which do not involve a change in the fixed assets of the AIM company or its subsidiaries.
    
    An AIM company must issue notification without delay as soon as the terms of any substantial transaction are agreed, disclosing the information specified by Schedule Four.

Related party transactions

• This rule applies to any transaction whatsoever with a related party which exceeds 5% in any of the class tests.
  
  An AIM company must issue notification without delay as soon as the terms of a transaction with a related party are agreed disclosing:
  
  • the information specified by Schedule Four;
  • the name of the related party concerned and the nature and extent of their interest in the transaction; and
  • a statement that with the exception of any director who is involved in the transaction as a related party, its directors consider, having consulted with its nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

Reverse takeovers

13. A reverse takeover is any acquisition or acquisitions in a twelve month period which for an AIM company would:
    • exceed 100% in any of the class tests; or
    • result in a fundamental change in its business, board or voting control; or
    • in the case of an investing company, depart materially from its investing policy (as stated in its admission document or approved by shareholders in accordance with these rules).

Fundamental changes of business

14. Any disposal by an AIM company which, when aggregated with any other disposal(s) over the previous twelve months, exceeds 75% in any of the class tests, is deemed to be a disposal resulting in a fundamental change of business and must be:
    • conditional on the consent of its shareholders being given in general meeting;
    • notified without delay disclosing the information specified by Schedule Four and insofar as it is with a related party, the additional information required by rule 13; and
    • accompanied by the publication of a circular containing details of the disposal and any proposed change in business together with the information specified above and convening the general meeting.

Aggregation of transactions

15. Transactions completed during the twelve months prior to the date of the latest transaction must be aggregated with that transaction for the purpose of determining whether rules 12, 13, 14 and/or 19 apply where:
    • they are entered into by the AIM company with the same person or persons or their families; or
    • they involve the acquisition or disposal of securities or an interest in one particular business; or
    • together they lead to a principal involvement in any business activity or activities which did not previously form a part of the AIM company's principal activities.

Disclosure of miscellaneous information

16. An AIM company must issue notification without delay of:
    • any relevant changes to any significant shareholders, disclosing, insofar as it has such information, the information specified by Schedule Five;
    • the resignation, dismissal or appointment of any director, giving the date of such occurrence and for an appointment, the information specified by Schedule Two paragraph (g) and any shareholding in the company;
    • any change in its accounting reference date;
    • any change in its registered office address;
    • any change in its legal name;
    • any material change between its actual trading performance or financial condition and any profit forecast, estimate or projection included in the admission document or otherwise made public on its behalf;
    • any decision to make any payment in respect of its AIM securities specifying the net amount payable per security, the payment date and the record date;
    • the reason for the application for admission or cancellation of any AIM securities and consequent number of AIM securities in issue;
    • the occurrence and number of shares taken into and out of treasury, as specified by Schedule Seven;
    • the resignation, dismissal or appointment of its nominated adviser or broker;
    • any change in the website address at which the information required by rule 26 is available;
    • any subsequent change to the details disclosed pursuant to sub-paragraphs (iii) to (viii) inclusive of paragraph (g) of Schedule Two, whether such details were first disclosed at admission or on subsequent appointment;
    • the admission to trading (or cancellation from trading) of the AIM securities (or any other securities issued by the AIM company) on any other exchange or trading platform, where such admission or cancellation is at the application or agreement of the AIM company. This information must also be submitted separately to the Exchange.

Half-yearly reports

18. An AIM company must prepare a half-yearly report in respect of the six month period from the end of the financial period for which financial information has been disclosed in its admission document and at least every subsequent six months thereafter (apart from the final period of six months preceding its accounting reference date for its annual audited accounts). All such reports must be notified without delay and in any event not later than three months after the end of the relevant period.
    
    The information contained in a half-yearly report must include at least a balance sheet, an income statement, a cash flow statement and must contain comparative figures for the corresponding period in the preceding financial year (apart from the balance sheet which may contain comparative figures from the last balance sheet notified). Additionally the half-yearly report must be presented and prepared in a form consistent with that which will be adopted in the AIM company's annual accounts having regard to the accounting standards applicable to such annual accounts.

Annual accounts

19. An AIM company must publish annual audited accounts which must be sent to its shareholders without delay and in any event not later than six months after the end of the financial year to which they relate.
    
    An AIM company incorporated in the UK or an EEA country must prepare and present these accounts in accordance with International Accounting Standards. Where, at the end of the relevant financial period, such company is not a parent company, it may prepare and present such accounts either in accordance with International Accounting Standards or in accordance with the accounting and company legislation and regulations that are applicable to that company due to its country of incorporation.
    
    An AIM company which is not incorporated in either the UK or an EEA country must prepare and present these accounts in accordance with either:
    • International Accounting Standards;
    • US Generally Accepted Accounting Principles;
    • Canadian Generally Accepted Accounting Principles;
    • Australian International Financial Reporting Standards (as issued by the Australian Accounting Standards Board); or
    • Japanese Generally Accepted Accounting Principles.

Publication of documents sent to shareholders

20. Any document provided by an AIM company to its shareholders, must be made available pursuant to rule 26 without delay, and its provision must be notified.
    
    An electronic copy of any such document must be sent to the Exchange.

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