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CHANGES TO THE AIM RULES
On 28 November 2003, the London Stock Exchange plc announced
that it had made a number of changes to the AIM Rules, which
came into effect on 1 December 2003.
1.1 Cancellation of Admission
A change has been made in respect of companies seeking to
cancel their admission from AIM under Rule 39, following consultation.
Unless it has the consent of the Exchange, an AIM company
seeking the cancellation of its admission must give 20 business
days notice of the proposed cancellation and make such cancellation
conditional upon the consent of not less than 75% of votes
cast by its shareholders at general meeting. It is important
to note that, under the Companies Act, a special resolution
requires shareholders to be given at least 21 days notice
of the meeting, but to be effective under the AIM Rules a
longer period of 20 business days notice needs to be given
to a Regulatory News Service of the intention to cancel the
listing.
The notification of cancellation released to a Regulatory
News Service must state the following:
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the intended date of cancellation; |
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reasons for the cancellation; |
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how the shareholders will be able to deal
in shares following cancellation; and |
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any other matter relevant to shareholders
in reaching an informed decision upon the issue of the
intended cancellation. |
The guidance to the AIM Rules sets out two examples of when
the Exchange will consent to the cancellation of the listing
without the passing of the resolution by shareholders and
these are where:
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comparable dealing facilities such as upon
an EU regulated market are to be put in place to enable
shareholders to trade their AIM securities in the future;
or |
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pursuant to a takeover which has become
wholly unconditional, an offeror has received valid acceptances
in excess of 75% of each class of AIM securities. |
1.2 Fast-Track Admission
The AIM Rules were changed in May 2003 to introduce a streamlined
admission route for companies which have been listed on a
Designated Market (a "quoted applicant") for at
least 18 months prior to admission to AIM. Under the Rules,
a quoted applicant must provide the Exchange with information
specified in schedule one and its supplement in the AIM Rules.
Apart from the changes required because of the introduction
of Treasury Shares, the quoted applicant must now provide:
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"confirmation that, following due
and careful enquiry, it has adhered to any legal and
regulatory requirements involved in having its securities
traded upon such market"; and |
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"a statement that its directors have
no reason to believe that the working capital available
to it or its group will be insufficient for at least
twelve months from the date of its admission." |
The highlighted text denotes the changes to the AIM Rules.
The first rule change requires the quoted applicant to undertake
additional due diligence to ensure that it has met the regulatory
requirements of its Designated Market. In some instances,
the exchange which is the Designated Market may be willing
to provide some form of written comfort in this respect. Alternatively,
if the quoted applicant has advisers on the Designated Market,
the advisers may also be able to provide the directors with
some form of written comfort.
The second rule change merely clarifies that the working
capital statement applies to the group of companies of which
the applicant is a member, taken as a whole, not just the
applicant, in line with the working capital statement required
for a new applicant company seeking admission to trading on
AIM which produces an Admission Document.
For further information on the fast-track procedure, see
our July
2003 PLC update or the AIM Rules which can be downloaded
from www.londonstockexchange.com/aim/rules.
In August 2003, Charles Russell advised the Canadian mining
company, Bema Gold Corporation, on its fast-track admission
when it became the second-largest company on AIM with a market
capitalisation of £500 million.
1.3 Treasury Shares
Changes have been made to the AIM Rules to accommodate the
introduction of Treasury Shares. On 1 December 2003, the Companies
(Acquisition of Own Shares) (Treasury Shares) Regulations
2003 (SI 2003/116) came into force. These regulations amended
the Companies Act 1985 and allow companies listed on the London
Stock Exchange or AIM to buy back and hold up to 10% of their
issued shares in treasury.
For more information on the workings of Treasury Shares,
see our July
2003 PLC update
If
you require further information on any matter covered in this
note, please contact your principal contact at Charles Russell
or Simon
Gilbert, Katy
Knight, Clive
Hopewell or Alexander
Keepin (London), Francis
Rundall or Richard
Norton (Cheltenham) or Geoff
Sparks (Guildford) and on 0207 203 5000.
Please note that the summaries above are a general indicative
guide only. They are not exhaustive. This information has
been prepared by the firm as a service to our clients. As
it is a general guide, we recommend that you seek professional
advice before taking action. No liability can be accepted
by the firm for any action taken or not taken as a result
of this information. The firm is not authorised under the
Financial Services and Markets Act 2000 but we are able in
certain circumstances to offer a limited range of investment
services to clients because we are members of the Law Society.
We can provide these investment services if they are an incidental
part of the professional services we have been engaged to
provide.
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