AIM becomes SME Growth Market – the implications for AIM companies

The designation “SME Growth Market” was introduced by the Markets in Financial Instruments Directive II (2014/65/EU) (MiFID II) as part of the European Commission’s capital markets union plan, to create a bespoke regulatory framework for European growth markets. AIM is currently the largest market for small and medium sized growth companies in the EU.

So what does this mean for AIM companies?

Slight changes to Rule 26 of the AIM Rules for Companies

This rule requires AIM companies to make certain information and documents available on a website. All publications of the following on or after 3 January 2018 must now remain on the website for at least five years:

• Annual accounts, half-yearly and any quarterly or similar reports published under AIM Rules 18 and 19.
• All inside information announcements made under The Market Abuse Regulation (EU) No 596/2014 (MAR).
• Any prospectus.

The actual Rule changes are shown on this link.

Our thoughts: AIM companies should not find these extended requirements too onerous. Essentially there’s no change to what has to be posted. These documents just have to be kept on the website for the longer period of five years, rather than the previous periods that ranged from 12 months to three years.

Insider list exemption under MAR

Companies with shares admitted to trading on an SME Growth Market are exempt from the requirement to keep and constantly update insider lists (Article 18(6) of the EU Market Abuse Regulation 2014 (MAR)). However the company must:

• still ensure that anyone with access to inside information acknowledges the legal and regulatory duties entailed and is aware of the relevant sanctions; and
• be able to provide the FCA upon request with a reduced content insider list, including:

- Date of birth where there is no national ID number (as in the UK);

- Personal full home address and personal telephone numbers – but only if the information is available to the company at the time of the FCA's request.

Since MAR came into force, on 3 July 2016, AIM companies, together with Main Market companies, have been obliged to address MAR’s full insider list requirements.

Our thoughts: Some AIM companies may be tempted to take advantage of this exemption and not compile any insider lists at all unless and until the FCA requests one. However, as AIM companies should already be keeping them, we would predict that they will continue to do so, but just reduce the content as to the individuals’ detailed information.

Useful links

AIM notice 48 explaining the application for SME Growth Market status

Extracted pages of the AIM Rules for Companies showing the minor consequential changes