Background and context
The London Stock Exchange (the "Exchange") has published changes to the AIM Rules for Nominated Advisers intended to provide more clarity and detail on the eligibility criteria for nominated advisers ("nomads") and the Exchange's supervisory powers.
Following consultation earlier this year, the Exchange announced the changes in AIM Notice 52 which came into force on 30 July 2018. The Exchange has implemented the majority of the changes proposed during the consultation.
Changes to the Rules
The main points are:
Eligibility (Rule 2): the Exchange has introduced new eligibility criteria for nomads to provide clarity about the resources and standards of conduct expected. These include that a firm is capable of being effectively supervised by the Exchange and has appropriate financial and non-financial resources in place. The eligibility of existing nomads will not be reviewed by the Exchange unless a matter comes to its attention or is identified when performing its supervisory role.
The Exchange had proposed that nomads would be required to demonstrate that they have appropriate risk management systems in place to identify, manage and control risk. Following consultation, the Exchange did not introduce this express requirement on the basis that it is already covered by the requirement for nomads to have "proper procedures" in place.
Notification (Rule 12): the Exchange has provided clarity regarding the types of information that a firm is required to provide to it relating to changes in the firm's operations. This includes notifying the Exchange as soon as possible of the resignation of the Head of Corporate Finance or other relevant officer.
Supervision (Rule 27): the changes clarify that the Exchange may require a nomad to undertake certain remedial action or may restrict a nomad's status. For example, the Exchange may impose a restriction where the nomad no longer has sufficient experienced personnel if, for example, key executives leave the firm.
Moratorium on acting for AIM companies (Rule 31): the Exchange provides more detailed examples of where it may prevent a nomad from acting for further AIM companies until the Exchange considers it appropriate.
Jurisdiction (removal of Rule 28 and amendment to Rule 32): the Exchange has clarified that it has jurisdiction over nomads for suspected or actual breaches of the AIM Rules for Nominated Advisers even if the firm is no longer an approved nomad if the breaches occurred whilst the firm was still a nomad.
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