COVID-19 UK: Capital Markets – AIM issue additional guidance and relax some rules for suspended companies – Update

March.24.2020

London’s Alternative Investment Market (AIM) have announced that until further notice, AIM Regulation will be applying discretion to the application of certain AIM Rules for companies and the AIM Rules for nominated advisers (“AIM Rules”). This is likely to be the first of several guidance notes to be issued and it is expected that AIM will follow (in appropriately modified form) any action taken by the FCA under the Listing Rules, and the Disclosure Transparency and Guidance Rules.

Temporary suspension of trading

AIM have reminded Nomads of the need to know their AIM companies well and that they should have a sound understanding of how their AIM companies are planning and responding to events as they unfold, so that they are able to make proper disclosures in accordance with their AIM Rules obligations.

AIM have stressed that timely and accurate disclosure remains a key requirement under the AIM Rules, and all AIM companies should continue to meet their disclosure obligations without delay.

However, AIM has recognised that some AIM companies may face material new developments as a consequence of the restrictions and challenges being caused by Coronavirus (COVID-19), and have accordingly adopted a more flexible approach to temporary suspensions where an AIM company may require more time to make a fully compliant notification.

Suspended AIM companies

AIM have also handed a lifeline to all AIM companies – which are currently suspended in respect of the usual AIM Rule 14 obligation that the trading of AIM securities is cancelled where a suspension has been in place for more than six months – by extending the period to 12 months for any AIM company suspended between 30 September 2019 and 1 July 2020.

Comment: These seem sensible and pragmatic steps to acknowledge the realities facing some AIM companies. However, AIM Regulation have always operated on a case-by-case basis, and it is unlikely that the more flexible approach announced will obviate the need for nominated advisers to argue a detailed case to support any request for temporary suspension.