A number of targeted changes have been made with the intention of reducing unnecessary burdens relating to admission. These include:

• Removing the requirement for a working capital statement – instead certain specified disclosures must be made in relation to capital resources, financial commitments, use of proceeds, and future fundraising needs.
• Broadening the range of accepted accounting standards to permit UK companies to use UK GAAP. The rules also allow for use of additional local GAAPs in certain circumstances – in this context, the Nomad should approach the LSE, which will consider the position on a case-by-case basis taking into account considerations such as the relevant accounting framework, the availability and quality of disclosure, and whether there are any material differences to International Accounting Standards (IAS).
• Formalising the ability for companies to incorporate information into the AAD by reference. Rather than a prescribed list of information that can be incorporated in this way, the LSE expects companies to make a reasonable assessment (with the support of their Nomads) as to whether incorporation by reference is appropriate.

The LSE has previously flagged that it is also working on a more substantive redesign of the AAD and will consult on this in due course.

Yes – to enable founders to retain control, the revised rules allow special voting shares to be in place at admission to AIM (subject to compliance with certain requirements). The LSE has not mandated a fixed time limit or sunset period for such shares – this can be contrasted with the UK Listing Rules applicable to ESCC companies which impose a 10-year sunset for weighted voting rights shares held by institutional or corporate investors (rather than individuals).

Additional guidance has been included in the final rules to make it clear that special voting shares cannot be issued, or their rights extended, following admission.

The revised rules allow companies undertaking an equity fundraising to request a temporary suspension, known as a “capital access window”. This is intended to enable the fundraising process to be managed more closely and to support companies in approaching a broader investor base, including retail investors, during the temporary suspension period (although the LSE notes that retail participation is not required by the rules).

There is no fixed period for a capital access window, but the LSE expects it will typically be short as companies will want to have their shares restored to trading as soon as possible. Requests for suspension must be made through the Nomad and will be considered by the LSE on a case-by-case basis.

Yes – a number of changes have been made with the intention of supporting acquisition strategies of AIM companies.

The threshold for the substantial transaction rules has been increased from 10 percent to 25 percent, consistent with the approach under the UK Listing Rules.

There are also a number of changes relating to reverse takeovers, including:

• Revising the definition of reverse takeover to exclude acquisitions that exceed 100 percent in the class tests which do not also involve a fundamental change to the business, board and/or voting control. These will be classified as substantial transactions rather than reverse takeovers but in such cases, Nomads will be required to consult the LSE, which will consider on a case-by-case basis (after discussing the nature of the transaction with the Nomad) whether shareholder approval will still be required.
• Enabling Nomads to request that a company is not suspended on announcement of a reverse takeover in contemplation provided the Nomad is satisfied that alternative disclosure can be made to enable an informed assessment by investors.
• Clarifying the treatment of option arrangements that are exercisable solely at the discretion of the AIM company.
• Clarifying that, where there is a delay between shareholder approval of a reverse and re-admission of the enlarged group, a supplementary AAD will only be required where there is a significant new factor, material mistake or material inaccuracy under the Public Offers and Admission to Trading Regulations (POATRs).

Certain changes have been made to the class tests – in particular:

• The profits test is now only relevant to the related party rules – the LSE notes that it continues to provide an important indicator for these transactions, particularly for emerging and growing companies.
• Clarifying that where an investing company makes an acquisition in line with its investing policy and which does not result in control and/or consolidation of the company or business being acquired, the gross capital test can be pro-rated.

Yes – under the revised related party rules, a company’s Nomad is not required to provide a fair and reasonable opinion in relation to non-standard director remuneration where it is satisfied that the contractual terms provide reasonable commercial protections for the company (in response to feedback, additional guidance has been included in the final rules on what constitutes standard remuneration for these purposes). Where the Nomad cannot satisfy itself as to the commercial protections, the company will be required to seek shareholder approval. It should be noted that the changes to the rules do not remove the requirement for (among other things) a “fair and reasonable” statement from the independent directors.

The definition of “related party” has also been amended, including by:

• Removing references to PDMRs (this change was not previously consulted on but has been made in light of comments from some respondents).
• Clarifying that: a company will be a related party where one or more of its directors is also a director of the AIM company; and a person will be a related party where they hold an interest in 10 percent or more of the AIM company’s assets. 

No – this requirement has been removed. Instead, companies must disclose their approach to certain specific governance matters to assist investor understanding, including board composition, director roles and responsibilities, remuneration and performance, their risk and controls framework, and investor relations. Boards should still, for the purpose of guidance and informing approach to their corporate governance arrangements, consider a recognised code.

The LSE notes that these changes are intended to give companies flexibility to adopt governance arrangements appropriate to their size, stage of development and circumstances, and enable them to use a recognised code as a framework to focus on what is meaningful and appropriate by reference to their particular circumstances and needs. 

Recognising the overlap with AIM companies’ obligations to disclose inside information under the UK Market Abuse Regulation (MAR), the separate AIM Rule requirement to disclose price sensitive information has been replaced by new AIM Rule 11 which:

• Requires companies to have sufficient systems and controls to monitor and identify any changes or developments that may reasonably have a material impact on their business and/or prospects and to keep their Nomad updated on a timely basis in relation to changes or developments that may reasonably have a material impact.
• Includes an obligation for an AIM company to seek (and have regard to) the views of its Nomad on whether any such changes or developments would be likely to have a market impact if made public, and to take the Nomad’s views into account when considering its disclosure obligations under MAR. The company must also provide the Nomad with any information it reasonably requests or requires in order to formulate its views.

Among other things, the guidance on the new rule explains that it is intended to support the integrity and reputation of the market by ensuring companies are properly engaging with their Nomads in relation to changes or developments so that the Nomad can provide its specialist public market corporate finance experience.

The LSE notes that Nomads are not responsible for companies’ compliance with their disclosure obligations and AIM companies have always had primary responsibility for these under the AIM Rules and MAR.

Some other key changes to continuing obligations include:

• New guidance in relation to the notification that must be made where an AIM company is admitting a new class of securities (an AAD is not required in such circumstances following changes made to the AIM Rules earlier this year).
• Increasing the deadline for a company to appoint a replacement Nomad before its admission to AIM is cancelled from one month to six months.
• Introducing a framework that AIM companies can use (on a voluntary basis) to disclose details of proxy advisor engagement. The LSE notes that broader concerns regarding proxy advisor reporting are not within its remit or powers to address but that it will continue its engagement with the FCA and FRC in this area.
• In light of concerns raised regarding information, commentary or speculation being posted on bulletin boards or through other forms of media, highlighting that company notifications are the authoritative source of information and giving AIM companies a voluntary “right of reply” to respond to any third-party commentary, speculation or criticism. The LSE has reiterated that AIM companies should not feel obliged to respond and that a decision not to respond should not be interpreted negatively or construed as acceptance of the relevant commentary.

This has been replaced by a new “express market” route, intended to enable companies from a wider range of jurisdictions to join AIM. Key differences from the AIM Designated Market (ADM) route include: new eligibility requirements focused on maturity, stability, and established track record; a wider range of eligible markets (Express Markets); and an accelerated process for certain Main Market companies. Changes have been made to the proposals consulted on in order to ensure the rules are consistent with relevant FCA rules in relation to the UK public offers regime.

A new dual market applicant route has also been introduced for companies seeking simultaneous admission to an Express Market and AIM.

Inside AIM is being retired – any guidance that remains relevant has been incorporated into the revised AIM Rules and associated guidance notes.

Various administrative and clarificatory changes have been made to the Nomad Rules, including to bring them into line with the revised AIM Rules and to explicitly refer to the Nomad’s overriding obligation to preserve the reputation/integrity of AIM.

Questions 8 and 9 (which relate to the Express Market route to admission and new AIM Rule 11) of the Nomad Technical Note published in June have also now come into effect.