Taking AIM: revised rules for AIM companies

As of 28 September 2018, AIM companies will be subject to new corporate governance requirements.

The London Stock Exchange has amended the AIM rules to require AIM companies to disclose the extent to which they comply with a ‘recognised corporate governance code’. This amendment follows on from the London Stock Exchange’s discussion and consultation papers proposing a number of amendments to the AIM Rules for Companies.

Under Rule 26 of the amended AIM Rules for Companies, AIM companies are required to provide details on their websites of a recognised corporate governance code that their directors have decided to apply. They must also show how they comply with their chosen code and explain any reasons for departing from it. AIM Companies are required to review this information annually and details must be included on their websites as to when this information was last reviewed.

This new requirement under AIM Rule 26 will take effect from 28 September 2018. Though all new applicants for AIM have been required to state which corporate governance code they intend to follow since March 2018, the effects of the new requirements won’t take effect until September this year.

There is no prescribed list of recognised corporate governance codes so AIM companies have a range of options to suit their particular circumstances. The London Stock Exchange has however identified benchmark codes such as the QCA Corporate Governance Code and the UK Corporate Governance Code and it seems likely that most AIM companies will elect to follow one of these. Dual listed AIM companies can elect to comply or explain against appropriate standards in their home jurisdiction.