Stock Exchange

The London Stock Exchange has published a feedback statement to its July 2017 discussion paper, together with a consultation on proposed changes to the AIM Rules.

Of note is the change regarding corporate governance.

The LSE is proposing to remove the option for an AIM company to state that it has not adopted a corporate governance code and instead to require AIM companies to state in their AIM Rule 26 disclosures, which recognised industry code of corporate governance it has adopted and to comply or explain against its chosen code. The LSE expects companies to provide meaningful information to investors to enable them to understand an AIM company’s approach to governance. The LSE acknowledges that there may be specific reasons why a company may choose not to comply and explaining this to investors should facilitate meaningful dialogue between investors and the company.

The LSE is not proposing to require companies to update the disclosure annually. However, the information must be kept up to date and the last date on which it was updated should be included in the disclosure. It will be the company’s responsibility to ensure that the information is kept up to date, not the nominated advisers’.

The LSE also considered feedback on the composition of the board of AIM companies. Whilst the LSE does not propose to introduce mandatory board composition requirements, it would normally expect the board to include a Chairperson, Finance Director and Non-Executive Directors.

Responses on the consultation should be sent to the LSE on or before 29 January 2018. It is anticipated that the amended AIM Rule 26 will be effective from 30 June 2018 so as to give AIM companies and their nominated advisers sufficient time to prepare for the proposed changes.