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Feedback statement and consultation: AIM Rules Review

Feedback statement and consultation: AIM Rules Review
  • United Kingdom
  • Financial services



The London Stock Exchange (“the Exchange”) has published a feedback statement and consultation on its proposed review of the AIM Rules. The statement sets out an overview of responses received to the discussion paper issued on 11 July 2017, which invited feedback on certain aspects of the AIM Rules for Companies (”AIM Rules”) and the AIM Rules for Nominated Advisers relating to the admission requirements and the role of nominated adviser (“Nomads”). It also includes a consultation on the proposed changes summarised below.       

Proposals on which the Exchange seeks views

The Exchange is proposing the following:

Formalising an early notification process for Nomads

Changes to AIM Rule 2 are proposed so that there will be a formal requirement for early notification. However the timing of the notification will be left to the discretion of the Nomad. The Exchange will publish a template to specify the type of information that will be required (examples are suggested in the earlier Discussion Paper). It is noted that if a matter is not bought to the attention of the Exchange at a sufficiently early stage in the process, then it may result in delays.

Guidance to Nomads on considering appropriateness and the Exchange’s Rule 9 powers

The Exchange proposes to include in Schedule 3 of the AIM Rules for Nominated Advisers a non-exhaustive list of factors that a Nomad should consider when assessing an applicant’s appropriateness for admission (see here).

The feedback statement emphasises that it remains the responsibility of the Nomad to assess appropriateness for admission. However, the Exchange is also proposing changes to AIM Rule 9 to emphasise that it has a discretion to refuse admission.

Corporate Governance

Continuing the current focus on corporate governance, changes to AIM Rule 26 are proposed, to include a statement of the recognised industry code that the AIM company applies. The option for an AIM company to state that it has not adopted a corporate governance code will be removed, so an AIM company will have to comply with its chosen code, or explain where it has not done so. It is proposed that these changes will take effect from 30 June 2018.

It is not proposed to introduce mandatory requirements for board composition, although it is noted that the roles of Chairperson, Finance Director and non-Executive Directors are integral to the board.

Proposals not being taken forward

The Exchange is not proposing to proceed with any changes in respect of the following at this time:

Free float – there was strong support that the current qualitative rather than quantitative approach strikes the right balance;

Minimum fundraising requirement – the Exchange does not propose to introduce this for additional categories of new applicants, but will look to provide further guidance to Nomads if required in the context of their appropriateness considerations; and

Automatic fines for certain AIM Rule breaches. However, there will be a consultation on changes to the Disciplinary Handbook in 2018.

Next steps

Views on the proposals for change should be submitted to the Exchange by 29 January 2018.

Useful links

Discussion paper July 2017 – AIM Rules Review

Feedback Statement & Consultation

AIM Rules for Companies – Consultation mark up

AIM Rules for Nominated Advisers (Extract) – consultation mark up