UK: Market Abuse Regulation: AIM Team Consults On Changes To AIM Rules

In our Legal Alert dated 27 January 2016 - ' AIM Companies to be caught by new Market Abuse Regulation' - we flagged up that the Market Abuse Regulation (MAR) which comes into force on 3 July 2016, will apply additionally to AIM companies and the various significant changes which will apply to AIM companies. At that time however, we were waiting for the AIM Team at the London Stock Exchange to clarify potential changes to the 'AIM Rules for Companies' in light of MAR.

On 13 April 2016, the AIM Team published its proposed changes to the 'AIM Rules for Companies', for consultation - in advance of MAR coming into force on 3 July 2016. Responses to the consultation have been requested by the AIM Team on or before Thursday, 12 May 2016.

The key changes proposed by the AIM Team are:-

AIM Rule 11 - Disclosure of price sensitive information

The AIM Team is proposing to retain AIM Rule 11, but to amend the guidance notes to AIM Rule 11 to make clear reference to the purpose of the AIM Rule ("to maintain a fair and orderly market and to ensure all users of the market have simultaneous access to the same information to make investment decisions") and to signpost an AIM company's separate obligation to also comply with Article 17 (Public disclosure of insider information) of MAR.

Aim companies will be required to comply with both AIM Rule 11 and Article 17 of MAR - and compliance with MAR will not mean that an AIM company will have satisfied its obligations under the AIM Rules and vice versa.

AIM companies will therefore be subject to the remit of both AIM Regulation (in respect of its AIM Rules disclosure obligations) and the Financial Conduct Authority (FCA), as the 'competent authority' in the UK (in respect of MAR disclosure obligations). The AIM Team has stated that it intends to work closely with the FCA to co-ordinate its approach and to minimise any duplication of activities.

AIM Rule 17 - Directors' dealings

The AIM Team recognise that Article 19 (Managers'/PDMRs' transactions) of MAR includes notification requirements which apply to issuers, 'PDMRs' (which includes Directors) and their closely associated persons. Furthermore, the AIM Team accepts that the European Commission will have the power to adopt delegated acts under MAR to state which types of transactions will trigger the notification requirements and also to adopt implementing standards which will specify the level of information that must be reported, as well as forms which must be used for notifications.

It is therefore proposed that Directors' dealings be deleted from the list of information in AIM Rule 17 which is required to be notified without delay. The AIM Team is however proposing to insert new guidance to AIM Rule 17 in respect of Directors' dealings which will signpost an company's obligations under Article 19 of MAR.

AIM Rule 21 - Restrictions on dealings

As MAR will provide a legal prohibition on trading during 'close periods' and exemptions to those prohibitions, the AIM Team is proposing to remove the existing provisions of AIM Rule 21 along with the associated definitions of "deal" and "unpublished price sensitive information" contained in the glossary of definitions.

However, in its place, it is proposed that a new Rule be inserted in the AIM Rules requiring AIM companies to have a 'dealing policy'. The AIM Team is not however proposing to prescribe the detailed content of the dealing policy - rather to set out the minimum provisions that the AIM Team would expect to be included in the policy.

Proposed amendments to the guidance on AIM Rule 21 state that the AIM team would expect an AIM company "to appoint independent staff of sufficient seniority to grant clearance requests", with consideration to be given to an alternate person if a person so appointed is not independent in respect of a particular clearance request.

The AIM Team has stated that it will expect existing AIM companies to update their dealing policies to ensure compliance with the proposed new AIM Rule by 3 July 2016 m(the date when MAR comes into force).

Preliminary statement of annual accounts

The AIM Team has noted that in the absence of further guidance from ESMA, it is not clear whether an issuer is able to end its 'close period' by the publication of a preliminary statement of annual accounts under MAR.

Consideration is being given to possible changes to the AIM Rules or else the AIM Team will issue further guidance (if necessary), once the application of MAR in this regard is clarified. The AIM Team has stated however that any questions regarding preliminary statements and MAR should be directed to the FCA as the 'competent authority' in the UK for MAR.

Consequential amendments

It is proposed that the reference to the "regulation of close periods" in AR5 of Schedule Three of the 'AIM Rules for Nominated Advisers' be deleted, in line with the changes to AIM Rules 17 and 21.

Other consequential changes are proposed to be made to the AIM Rules for Companies, the AIM Rules for Nominated Advisers and the AIM Note for Investing Companies where reference is made to 'directors dealings' in AIM Rule 17 or to AIM Rule 21.

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