NOTE: This document does not provide legal advice – it is only intended as a discussion draft to be updated and modified to fit the
circumstances. The publishers and authors shall not be liable to any person with respect to any loss or damages caused or alleged to be
caused directly or indirectly by the information or any mistake in this document. In particular, all statutory references should be
checked and users are reminded that changes are continually being made to the law and the document will not be up to date. [25 August
2011]
The Alternative Investment Market (AIM)
1.
The main headings of this note are:

Introduction

Nominated adviser (or “Nomad”)

Admission document

Special conditions for certain applicants

Disclosure/Notification of information

Major acquisitions and disposals

Restrictions on deals

Further issues of securities following admission
Introduction
2.
The London Stock Exchange has two primary equity markets – the Main Market and
AIM. AIM is the Exchange's international market specifically designed for small,
growing companies and has a reduced level of regulation compared to the Main Market.
The Main Market is for established companies seeking international recognition. In
January 2006 there were 3,087 companies with securities trading on the Exchange of
which 1,408 were on AIM.
3.
The Financial Services Authority ("FSA") is responsible for maintaining the list of
regulated markets in the UK. The current UK regulated markets include the London
Stock Exchange’s Main Market but does not include AIM. However the London Stock
Exchange is a recognised investment exchange (“RIE”) supervised by the FSA. AIM is
operated under the Exchange's role as an RIE. This is important for AIM as it means that
many of the costly burdens imposed by EU Directives do not apply to AIM companies.
Costs
4.
Estimated costs of obtaining an admission to trading on the Main Market are £750,000
plus 2-5% commission on funds raised and ongoing advisory costs of £250,000 pa.
5.
Estimated costs of entry to AIM are £300,000 plus 2-5% commission on funds raised and
ongoing advisory costs of £50,000 pa. For instance, the fees for the solicitor to the
company normally range from £50,000 to £100,000 and the fees for the solicitor to the
Nominated Adviser/Broker normally range from £20,000 to £25,000 but can be £40,000
for an overseas company.
Legal guides- The Alternative Investment Market (AIM)
Background to AIM
6.
The London Stock Exchange has long operated a mechanism for trading shares in
companies not on the Main Market. A rule (known as 535 and then as 4.2) allowed
members of the Exchange to trade such shares. There was also the Unlisted Securities
Market (USM) which flourished for most of the 1980s but hit hard times in the recession
of the early 1990s. During a review of the USM in the depths of the recession in about
1992 the question was asked whether the USM was profitable for the Exchange and the
USM was then closed. A lobby group was formed which was initially called CISCO and
is now (because of problems with the computer giant of the same name) called the
Quoted Companies Alliance. This lobby group established the need for a junior market
in the UK and AIM was born in 1995. AIM now has over 1,400 companies whose shares
are traded on its market.
7.
Suitable companies for AIM include:
8.

young growing companies;

companies whose shareholders need a trading facility but prefer the tax structure
of AIM rather than the Main Market;

companies with an existing wide shareholder base (e.g. Enterprise Investment
Scheme companies);

possibly management buy-outs or buy-ins seeking an exit for institutional
investors;

companies otherwise not qualifying for Main Market (e.g. few shareholders or
lack of 3 year track record); and

certain overseas companies particularly natural resource companies.
Attractions of AIM include that:

it facilitates fund raising to pay off loans or to fuel expansion;

it creates a market for the shares and this gives a potential exit for investors
(which usually increases the demand for minority holdings and improves the
value of such holdings);

it facilitates future takeovers (as the AIM company can offer quoted shares);

AIM securities may be eligible for various tax reliefs including the Enterprise
Investment Scheme and the Venture Capital Trust Scheme;

there is less regulation than on the Main Market;

there is enhanced profile increases credibility with suppliers, lenders and others;

it gives experience of being a publicly quoted company and provides a stepping
stone to the Main Market; and
Legal guides- The Alternative Investment Market (AIM)

9.
10.
it creates an alternative to venture/investment capital organisations and this should
help keep the cost of capital competitive. Indeed with venture capital
organizations having moved out of the smaller company sector AIM is now
probably the main source of venture capital in the UK.
Potential problems with AIM include:

some companies coming to AIM (e.g. venture capital backed MBOs) will have
too many sellers and not enough buyers;

the Stock Exchange may lose interest (after all the USM was closed because it
was not making a profit in the early 1990s). The Exchange's natural inclination is
to focus on the top 350 companies. The Exchange may make more profit from
one very large company on the Main Market than from all the AIM stocks;

Market Makers may have a large spread between bid and offer thus deterring
buyers (and leaving the market illiquid).
Points to consider when comparing AIM with the Main Market are that AIM companies:

do not require pre-vetting of documents by the FSA (acting as UK Listing
Authority) with associated time delays and cost, unless they are also making an
offer to the public;

do not require an annual filing update (with associated costs);

do not need a Sponsor but they do require a Nominated Adviser and a Nominated
Broker and their roles are similar to that of a Sponsor;

do not require a three year trading record;

have no minimum capitalization and no minimum shareholding by the public.
For the Main Market at least 25% must be in the hands of the public;

only require to notify the Exchange of certain transactions. For the Main Market
certain transactions require a circular and prior approval of shareholders;

do not require a statement in compliance with the guidelines on corporate
governance;

where the company's business has not been independent and earning revenue for
at least two years, its directors and employees must agree not to dispose of their
shares in the company for at least one year after admission to AIM.
Tax reliefs
11.
For individual investors the following reliefs are available for AIM securities:

Capital gains tax (CGT):
-
business asset taper relief;
-
gift relief;
Legal guides- The Alternative Investment Market (AIM)

The Enterprise Investment Scheme (EIS);

Inheritance tax (IHT):
-
business property relief

Relief for losses; and

Venture Capital Trusts (VCTs).
In addition the Corporate Venturing Scheme (CVS) is also available for corporate
investors. It is beyond the scope of this note to comment on the detail of the tax reliefs.
Nominated Adviser (or “Nomad”)
Appointment and responsibilities
12.
Every company on AIM must have and retain a Nominated Adviser at all times. The
Nominated Adviser is the most important adviser, being either an independent corporate
firm, an accountant or a broker. The Nominated Adviser must satisfy the Exchange that
it is competent to discharge its responsibilities and must be entered on a list maintained
by the Exchange. The register of approved Nominated Advisers is available on
www.londonstockexchange.com. Only one Nominated Adviser can be appointed at any
one time.
13.
The responsibilities of the Nominated Adviser include:

confirming that the directors have received satisfactory advice and guidance as to
the nature of their responsibilities and obligations to ensure compliance with the
AIM rules;

to the best of its knowledge and belief, having made due and careful enquiry, all
relevant requirements of the AIM rules have been complied with;

in its opinion, it is satisfied that the applicant and the securities which are subject
of the application are appropriate to be admitted to AIM;

being available at all times to advise and guide the directors of the company about
their obligations;

reviewing regularly the AIM company and in particular its actual trading
performance and financial condition against any profit forecast, estimate or
projection made public; and

providing such information in such form and within such time limits as the
Exchange may reasonably require.
Legal guides- The Alternative Investment Market (AIM)
Broker
14.
A company must also have a Broker who may be the same as the Nominated Adviser.
The Broker gauges the level of interest in the shares of the AIM company and advises on
pricing and placing them with investors.
15.
The Broker must be a member firm of the Exchange and will use its best endeavours to
find matching business in the company’s shares (unless a market maker has been
appointed). Thus at least one firm will always trade or do its best to match bargains in a
company’s shares.
16.
Normally an AIM company will also have:

a reporting accountant who is responsible for reviewing and auditing the
company's finances for potential investors;

a corporate lawyer who draws up the agreements surrounding the floatation [and
who advises generally on compliance with the law]; and

a financial PR company who is responsible for promoting the company and its
prospects to the investment community. It creates analyst presentations and
advises on investor relations strategy.
Appeals
17.
Any decision of the Exchange in relation to the AIM rules may be appealed to an appeals
committee in accordance with the procedures set out in the Disciplinary Procedures and
Appeals Handbook.
Admission document
18.
An applicant (other than a quoted applicant) must produce an admission document
disclosing information which must be available publicly, free of charge, for at least one
month from the admission of the applicant’s securities to AIM. The document may be
made available publicly either at a physical location or on the internet.
19.
If the AIM applicant is making an offer to the public then it must produce a prospectus.
The document must comply with the information requirements of a prospectus and be
approved by the FSA. A separate note on the Prospectus Rules is available on request. If
the applicant is not making an offer to the public the information disclosed must broadly
include:

Information equivalent to that which would be required by Annex I and II
Regulation 809/2004 of the European Commission ("PD Regulation") with
various exceptions including those relating to:
 selected financial information;
Legal guides- The Alternative Investment Market (AIM)
 operating and financial review;
 capital resources;
 research and development, patents and licences;
 profit forecasts or estimates
 remuneration and benefits;
 pro forma financial information;
 documents on display;
 working capital statement;
 capitalization and indebtedness;

a statement by its directors that in their opinion having made due and careful
enquiry, the working capital available to it and its group will be sufficient for its
present requirements, that is for at least twelve months from the date of admission
of its securities;

where it contains a profit forecast, estimate or projection (which includes any
form of words which expressly or by implication states a minimum or maximum
for the likely level of profits or losses for a period subsequent to that for which
audited accounts have been published, or contains data from which a calculation
of an approximate figure for future profits or losses may be made, even if no
particular figure is mentioned and the words 'profit' or 'loss' are not used):
(i)
a statement by its directors that such forecast, estimate or projection has
been made after due and careful enquiry;
(ii)
a statement of the principal assumptions for each factor which could have
a material effect on the achievement of the forecast, estimate or projection;
the assumptions must be readily understandable by investors and be
specific and precise;
(iii)
confirmation from the nominated adviser to the applicant that it has
satisfied itself that the forecast, estimate or projection has been made after
due and careful enquiry by the directors of the applicant; and
(iv)
such profit forecast, estimate or projection must be prepared on a basis
comparable with the historical financial information;

on the first page, prominently and in bold, the name of its nominated adviser and
certain risk warnings;

where applicable, a statement that its related parties and applicable employees
have agreed not to dispose of any interests in any of its AIM securities for a
period of twelve months from the admission of its securities;

information on each director and each proposed director including:
Legal guides- The Alternative Investment Market (AIM)
 the names of all companies and partnerships of which the director has been a
director or partner at any time in the previous five years, indicating whether or
not the director is still a director or partner;
 details of any receiverships, compulsory liquidations, creditors’ voluntary
liquidations, administrations, company voluntary arrangements or any
composition or arrangement with its creditors generally or any class of its
creditors of any company where such director was a director at the time of or
within the twelve months preceding such events (and note there is no five year
limit);

the name of any person (excluding professional advisers otherwise disclosed in
the admission document and trade suppliers) who has:
 received, directly or indirectly, from it within the twelve months preceding the
application for admission to AIM; or
 entered into contractual arrangements (not otherwise disclosed in the
admission document) to receive, directly or indirectly, from it on or after
admission any of the following:

(i)
fees totaling £10,000 or more;
(ii)
its securities where these have a value of £10,000 or more calculated
by reference to the issue price or, in the case of an introduction, the
expected opening price; or
where it is an investing company, details of its investing strategy which must
include, as a minimum requirement, such matters as:
 the precise business sector(s), geographical area(s) and type of company in
which it can invest;
 whether it will be an active or passive investor;
 how widely it will spread its investments;
 what expertise its directors have in respect of evaluating its proposed
investments and how and by whom any due diligence on those investments
will be effected; and
 any other information which it reasonably considers necessary to enable
investors to form a full understanding of:
(i)
the assets and liabilities, financial position, profits and losses, and
prospects of the applicant and its securities for which admission is
being sought;
(ii)
the rights attaching to those securities; and
(iii)
any other matter contained in the admission document.
Legal guides- The Alternative Investment Market (AIM)
Omissions from admission documents
20.
The Exchange may authorise the omission of information from an admission document
(other than a Prospectus) of an applicant where its nominated adviser confirms that:

the information is of minor importance only and not likely to influence
assessment of the applicant’s assets and liabilities, financial position, profits and
losses and prospects; or

disclosure of that information would be seriously detrimental to the applicant and
its omission would not be likely to mislead investors with regard to facts and
circumstances necessary to form an informed assessment of the applicant’s
securities.
Application documents
21.
At least three business days before the expected date of admission, a quoted applicant
must pay the AIM fee and submit to the Exchange an electronic version of its latest report
and accounts and a completed application form. These must be accompanied by a
nominated adviser’s declaration.
Admission to AIM
22.
Admission becomes effective only when the Exchange issues a dealing notice to that
effect.
Special conditions for certain applicants
Lock-ins for new businesses
23.
There is a risk that management and other promoters of a business exaggerate or
otherwise puff up the value of their business, float on AIM and then quickly exit. In
order to counteract this where the applicant’s business has not been independent and
earning revenue for at least two years, it must ensure that all related parties (which
includes substantial shareholders) and applicable employees (which includes anyone
likely to be in possession of unpublished price-sensitive information) as at the date of
admission agree not to dispose of any interest in its securities for one year from the
admission of its securities1.
24.
Prior to signing any lock-in agreements a wise precaution is to consult the Panel on
Takeovers and Mergers with a view to minimizing the risk that all persons in the lock-in
will be treated as acting in concert. The Exchange may not require a substantial
Legal guides- The Alternative Investment Market (AIM)
shareholder to be the subject of a lock-in where that shareholder became a substantial
shareholder at the time of admission and at a price which was more widely available.
Investing companies
25.
In 2004 and 2005 there was a growth in the number of companies coming to AIM which
were just cash shells. The promoters were intent on going through the regulatory hurdles
of obtaining a trading facility and then waiting for the right opportunity to appear. The
Exchange became nervous about the number of these cash shells and in 2005 introduced
a rule that applicants which were investing companies had to raise a minimum of £3
million in cash via an equity fundraising on, or immediately before, admission. The
Exchange expects an investing company as a minimum to seek the consent of its
investing strategy on an annual basis. Existing investing companies admitted prior to
1 April 2005 which raised less than £3 million on admission had until 1 April 2006 to
make an acquisition which constitutes a reverse takeover. If not it may be suspended.
Other conditions
26.
The Exchange also has wide powers to make the admission of an applicant subject to a
special condition. In addition the Exchange may delay an admission and/or ask for
further due diligence.
Disclosure/Notification of information
27.
Information required by AIM rules must be notified by the AIM company no later that it
is published elsewhere. An AIM company must retain a Regulatory Information Service
("RIS") provider (and a list of approved providers is on the Exchange’s website) to
ensure that information can be notified as and when required.
28.
Where an announcement is made at a meeting of shareholders which might lead to a
substantial movement in price then arrangements must be in place for notification of that
information so that disclosure at the meeting is no earlier than the announcement to the
RIS.
29.
An AIM company must take reasonable care to ensure that any information it notifies is
not misleading, false or deceptive and does not omit anything likely to affect the import
of such information.
General disclosure
30.
An AIM company must issue notification without delay of any new developments which
are not public knowledge concerning a change in:

its financial condition;

its sphere of activity;
Legal guides- The Alternative Investment Market (AIM)

the performance of its business; or

its expectation of its performance,
which, if made public, would be likely to lead to a substantial movement in the price of
its AIM securities.
Substantial transactions
31.
An AIM company must issue notification without delay as soon as the terms of a
substantial transaction are agreed. A substantial transaction is one which exceeds 10% in
any of the class tests (which are designed to gauge the size of the transaction compared
with the size of the issuer). It includes any transaction by a subsidiary of the AIM
company but excludes any transactions of a revenue nature in the ordinary course of
business and transactions to raise finance which do not involve a change in the fixed
assets of the AIM company or its subsidiaries. The information to be disclosed includes:
(a)
particulars of the transaction, including the name of any company or business,
where relevant;
(b)
the full consideration and how it is being satisfied;
(c)
the effect on the AIM company;
(d)
in the case of a disposal, the application of the sale proceeds;
(e)
in the case of a disposal, if shares or other securities are to form part of the
consideration received, a statement whether such securities are to be sold or
retained; and
(f)
any other information necessary to enable investors to evaluate the effect of the
transaction upon the AIM company.
Related party transactions
32.
An AIM company must also issue notification without delay as soon as the terms of a
transaction which exceeds 5% in any of the class tests with a related party are agreed
disclosing:

the same information as would be required in a substantial transaction;

the name of the related party concerned and the nature and extent of their interest in
the transaction; and

a statement that with the exception of any other director who is involved in the
transaction as a related party, its directors consider, having consulted with its
nominated adviser, that the terms of the transaction are fair and reasonable insofar as
its shareholders are concerned.
Legal guides- The Alternative Investment Market (AIM)
Class Tests
33.
The 'class tests' essentially relate to checking the size of the AIM company in relation to
the subject of the transaction in gross assets, profits, turnover and gross capital. There is
also a test on the consideration to aggregate market value of the ordinary shares of the
AIM company. Where the results are anomalous or inappropriate the Exchange may
disregard the calculation and substitute other indicators of size.
Disclosure of miscellaneous information
34.
An AIM company must issue notification without delay of:

any deals by directors disclosing, among other matters the identity of the director and
the price, amount and class of the AIM securities concerned;

any changes to the holding of any significant shareholder above 3%;

the resignation, dismissal or appointment of any director including on an
appointment, the directors’ shareholding in the company and details of receiverships,
compulsory liquidations of companies where he was a director at any time within 12
months prior to the event;

any change in its accounting reference date;

any material change between its actual trading performance or financial condition
and any profit forecast, estimate or projection included in the admission documents
or otherwise made public in its behalf;

any decision to make any payment in respect of its AIM securities specifying the net
amount payable per security, the payment date and the record date;

the reason for the application for admission or cancellation of any AIM securities;

the occurrence and number of shares taken into and out of treasury including the
number of shares of each class that the AIM company has in issue less the total
number of treasury shares of each held by the AIM company following such
movements; and

the resignation, dismissal or appointment of its nominated adviser or broker.
Half-yearly reports
35.
AIM companies must prepare half-yearly reports in respect of the six month period from
the end of the financial period. All such reports must be notified without delay and in
any event not later than three months after the end of the relevant period.
36.
The information contained in a half-yearly report must include at least a balance sheet, an
income statement, a cash flow statement and must contain comparative figures for the
corresponding period in the preceding financial year. Additionally the half-yearly report
must be presented and prepared in a form consistent with that which will adopted in the
Legal guides- The Alternative Investment Market (AIM)
AIM company’s annual accounts having regard to the accounting standards applicable to
such annual accounts.
37.
If the half yearly report has been audited it must contain a statement to this effect.
Annual accounts
38.
An AIM company must publish annual audited accounts prepared in accordance with
United Kingdom or United States generally accepted accounting practice or International
Accounting Standards as defined by Regulation (EC) No. 1606/2002. These accounts
must be sent to its shareholders without delay and in any event not later than six months
after the end of the financial year to which they relate.
39.
These accounts must disclose any transaction with a related party, whether or not
previously disclosed under these rules, where any of the class tests exceed 0.25% and
must specify the identity of the related party and the consideration for the transaction.
40.
The Exchange is moving towards requiring International Accounting Standards for all
AIM companies for financial years commencing on or after 1 January 2007. The
Exchange has confirmed that in relation to AIM companies incorporated in an EEA
member state, the AIM rules will be changed to treat AIM companies consistently with
the requirements of Article 4 of the IAS Regulation (Regulation (EC) No 1606/2002).
For an AIM company incorporated in an EEA State the proposal is that if it is a parent
company preparing consolidated financial statements then their statements must conform
to IAS (and if it is not such a parent then either in accordance with IAS or in accordance
with the national accounting standards applicable to its country of incorporation). For
companies incorporated in non EEA countries the proposal is to require one of the
following accounting standards: IAS, US GAAP, Canadian GAAP, Japanese GAAP or
Australian IFRS.
Major acquisitions and disposals
Reverse take-overs
41.
42.
A reverse takeover is an acquisition (or acquisitions in a twelve month period) which
would:

exceed 100% in any of the class tests; or

result in a fundamental change in the business, board or voting control of the AIM
company; or

in the case of an investing company, depart substantially from the investing strategy.
Any agreement which would effect a reverse takeover must be:

conditional on the consent of its shareholders being given in general meeting;
Legal guides- The Alternative Investment Market (AIM)

notified without delay; and

accompanied by the publication of an admission document in respect of the proposed
enlarged entity and convening the general meeting.
43.
Where shareholder approval is given for the reverse takeover, trading in the AIM
securities of the AIM company will be cancelled. If the enlarged entity seeks admission,
it must make an application in the same manner as any other applicant applying for
admission of its securities for the first time.
44.
Companies seeking access to the AIM market often do so through a reverse takeover of a
moribund existing AIM company. The benefits are not always apparent as there is the
risk of unknown liabilities emerging in the existing AIM company, the cost of the due
diligence in the AIM company and the cost of the new admission document. Where it is
of obvious benefit is where the existing AIM company has acquired interesting investors
who might back future growth plans of the enlarged entity.
45.
Following the announcement of a reverse takeover that has been agreed or is in
contemplation, the relevant AIM Securities will be suspended by the Exchange until the
AIM company has published an admission document, a nominated adviser declaration
and a company application form and has complied with all other requirements to which
an applicant may be subject under AIM rules.
46.
However, the new entity may make application in advance of the general meeting so that
its securities are admitted on the day after the general meeting which approves the reverse
take-over.
Disposals resulting in a fundamental change of business
47.
Any disposal by an AIM company which, when aggregated with any other disposal or
disposals over the previous twelve months, exceeds 75% in any of the class tests, is
deemed to be a disposal resulting in a fundamental change of business and must be:

conditional on the consent of its shareholders being given in general meeting;

notified without delay; and

accompanied by the publication of a circular containing the relevant information and
convening the general meeting.
48.
The consent of shareholders for the disposal may not be required where the disposal is as
a result of insolvency proceedings. The Exchange should be consulted in advance in
such circumstances.
49.
Where the effect of the proposed disposal is to divest the AIM company of all, or
substantially all, of its trading business activities the AIM company will, upon disposal,
be treated as an investing company and the notification and circular must also state its
investing strategy going forward.
Legal guides- The Alternative Investment Market (AIM)
50.
Also it should be noted that any AIM company with no trading business which is not an
investing company must seek the consent of its shareholders for its investing strategy at
its next annual general meeting. Upon becoming an investing company it must, within
twelve months, make an acquisition or acquisitions constituting a reverse takeover. For
the avoidance of doubt an AIM company will become an investing company under this
measure from the date on which shareholder consent is given in general meeting.
Aggregation of transactions
51.
Transactions completed during the twelve months prior to the date of the latest
transaction must be aggregated where:

they are entered into by the AIM company with the same person or persons or their
families;

they involve the acquisition or disposal of securities or an interest in one particular
business; or

together they lead to a principal involvement in any business activity or activities
which did not previously form a part of the AIM company’s principal activities.
Restriction on deals
52.
An AIM company must ensure that its directors and applicable employees do not deal in
any of its AIM securities during a close period. In addition, the purchase or early
redemption by an AIM company of its AIM securities or sale of any AIM securities held
as treasury shares must not be made during a close period.
53.
A close period basically is the two month period before the publication of the annual (or
half yearly) accounts (or if shorter the period from the end of the financial period to the
time of publication). If the company reports quarterly the two month period is shortened
to one month. Also a close period includes any other period when the AIM company is
in possession of unpublished price sensitive information. It is thought the term 'close'
comes from 'close season' being the time of year when the shooting of game is not
permitted.
54.
This rule prohibiting dealing will not apply, however, where such individuals have
entered into a binding commitment prior to the AIM company being in such a close
period where it was not reasonably foreseeable at the time such commitment was made
that a close period was likely and provided that the commitment was notified at the time
it was made. Binding means obligatory for all parties to the agreement at a price agreed
or which could be objectively determined.
55.
The Exchange may permit a director or applicable employee of an AIM company to sell
its AIM securities during a close period to alleviate severe personal hardship. This could
be an urgent need to pay for medical help or to satisfy a court order where no other funds
are reasonably available.
Legal guides- The Alternative Investment Market (AIM)
Further issues of securities following admission
Further admission documents
56.
57.
A further admission document will be required for an AIM company when it is:

required to issue a Prospectus under the Prospectus Rules for a further issue of AIM
securities; or

seeking admission for a new class of securities; or

undertaking a reverse take-over.
Provided the nominated adviser to an AIM company confirms to the Exchange that
equivalent information is available publicly by reason of the AIM company’s compliance
with the AIM rules certain information may be omitted from further admission
documents.
Language
58.
All admission documents, any documents sent to shareholders and any information
required by the AIM rules must be in English. Where the original documents are not in
English an English translation may be provided.
Director’s responsibility for compliance
59.
60.
An AIM company must ensure that each of its directors:

accepts full responsibility, collectively and individually, for its compliance with the
AIM rules;

discloses without delay all information which is needed in order to comply with
rule 17 (which deals with disclosure of miscellaneous information such as deals by
directors and relevant changes to any significant shareholder) insofar as that
information is known to the director or could with reasonable diligence be ascertained
by the directors; and

seeks advice from its nominated adviser regarding its compliance with the AIM Rules
whenever appropriate and takes that advice into account.
An AIM company must ensure it has in place sufficient procedures, resources and
controls to enable compliance with the AIM Rules.
Legal guides- The Alternative Investment Market (AIM)
Ongoing eligibility requirements
61.
62.
63.
64.
65.
Transferability of shares
An AIM company must ensure that its AIM securities are freely transferable except
where:

in any jurisdiction, statute or regulation places restrictions upon transferability; or

the AIM company is seeking to limit the number of shareholders domiciled in a
particular country to ensure that it does not become subject to statute or regulation.
Securities to be admitted
Only securities which have been unconditionally allotted can be admitted as AIM
securities. Also an AIM company must ensure that application is made to admit all
securities within a class of AIM securities.
Settlement
An AIM company must ensure that appropriate settlement arrangements are in place. In
particular, save where the Exchange otherwise agrees, AIM securities must be eligible for
electronic settlement.
General
An AIM company must pay AIM fees set by the Exchange as soon as such payment
becomes due.
Details of an AIM company contact, including an e-mail address, must be provided to the
Exchange at the time of the application for admission and the Exchange must be
immediately informed of any changes thereafter. The Exchange does not liaise with
either an AIM company or a Nominated Adviser on a no-names basis on a detailed
regulatory issue. The AIM rules are considerably relaxed for an applicant whose shares
have been traded for at least 18 months before the application on a market which the
Exchange has designated as an Exchange Designated Market (currently being the
Australian Stock Exchange, Deutsche Börse, Euronet, Johannesburg Stock Exchange,
NASDAQ, New York Stock Exchange, Stockholmbörsen, Swiss Exchange, Toronto
Stock Exchange and UK Official list).
Maintenance of orderly markets
66.
Precautionary Suspension
The Exchange may suspend the trading of AIM securities where:

trading in those securities is not being conducted in orderly manner;

it considers that an AIM company has failed to comply with the AIM rules;

the protection of investors so requires; or

the integrity and reputation of the market has been or may be impaired by dealings in
those securities.
Legal guides- The Alternative Investment Market (AIM)
67.
Cancellation
An AIM company which wishes the Exchange to cancel admission of its AIM securities
must notify the Exchange of its preferred cancellation date at least twenty business days
prior to such date and save where the Exchange otherwise agrees, the cancellation shall
be conditional upon the consent of not less than 75% of votes cast by its shareholders
given in a general meeting.
68.
The Exchange will cancel the admission of AIM securities where these have been
suspended from trading for six months.
69.
Cancellations (and suspensions) are effected by a dealing notice.
70.
Disciplinary action against an AIM Company
If the Exchange considers that a company has contravened the AIM rules, it may take the
following measures:

fine it;

censure it;

publish the fact that it has been fined or censured; and/or

cancel the admission of its AIM securities.
Legal guides- The Alternative Investment Market (AIM)