AIM Disciplinary Notice: Breach of Rule 31
The London Stock Exchange has published AIM Disciplinary Notice 15. The AIM company involved has been privately censured and fined £75,000 for a breach of AIM Rule 31 (AIM company and directors’ responsibility for compliance).
The AIM Disciplinary Committee (“ADC”) determined that the AIM company had failed to:
Provide its nomad with information reasonably required to carry out the nomad’s responsibilities owed to the Exchange.
Seek its nomad’s advice regarding compliance with the AIM Rules when it was appropriate to do so.
Inform its nomad and seek advice regarding a series of business developments. The ADC held that it was not appropriate for the company to decide whether or not the business developments were disclosable based solely on its own assessment of its obligations under the AIM Rules, without reference to its nomad.
The ADC further noted that:
The company’s obligation to inform its nomad and seek advice regarding business developments covers a wider range of developments than would be required to be announced under AIM Rule 11 (General disclosure of price sensitive information).
It is not sufficient for an AIM company simply to send agendas and minutes of board meetings to its nomad, without any context or conversation, and assume that such actions discharge the company’s responsibilities under AIM Rule 31.
Contractual obligations between an AIM company and its nomad do not override the company’s responsibilities under the AIM Rules.
The case is a salutary reminder to AIM companies of the importance to comply with AIM Rule 31 obligations to liaise with its nomad. In particular, AIM Rule 31 should not be narrowly interpreted and requires an AIM company to provide full, timely and regular information to its nomad. The ADC has said that it will continue to pursue formal disciplinary actions for such breaches.