3. AIM Flashcards
Where is the info that must be in pre-admission announcement
Schedule 1
When must application docs be sent
3 BD before admission
What is the ‘tax advantage’ offered by admitting to trading on AIM
‘Unquoted’ for Tax Act
What is the implication of the fact that AIM is not an RM (what provision)
85(2) FSMA - prospectus Test 2 will not apply
ER benefit of AIM
Pay lower rate of CGT (10%) up to £10m if applies
Where is the general duty of disclosure in admission doc
Schedule 2 para k
When will ER apply
Shares in trading company + 5% shares held + office/employee; alternatively, assets used in business
When is it possible to delay disclosure of price sensitive info under Rule 11
Impending development or matter in course of negotiation
Who must be satisfied as to C’s eligibility for admission to AIM
NOMAD
Two things broker ensures
Liquidity and safeguarding reputation of AIM - provides guaranteed market for purchase of shares
What is the relationship between broker and C governed by
Placing Agreement
What might happen to NOMAD if fails to comply w/ AIM Rules for NOMADs
Public censure/removal
What Rule requires AIM C to have a website
26
What is the main advantage of AIM
Less regulation
When is lock-in required for AIM
Less than 2 years’ revenue earning
What Rule requires disclosure of related party transactions
13
When can an applicant use ‘fast track’ admission to AIM?
If ‘quoted applicant’
What are ‘close periods’
Periods during which Ds and applicable employees cannot deal w/ their shares
What Rule contains various miscellaneous and specific disclosures that must be made
17
Who does Rule 21 apply to
Ds + applicable employees
What shows AIM is potentially riskier than MM
High turnover of companies
What does DTR 5.1 require
Notification of disposals/acquisitions of major shareholdings
Is there a minimum market capitalisation for AIM
No
What does Rule 17 require disclosure of re: its shareholdings
RIS to notify w/o delay of deals by significant Ms
What is stage 4 of admission
Dealing notice
Where is there a separate ongoing disclosure O from Rule 11 for price-sensitive info
Article 17 MAR
What Rule requires broker
35
Two Rules on financial reporting as continuing O
Rule 18 + 19
Three application docs
App form, electronic copy of admission doc and NOMAD’s declaration
What is the contents of the Admission doc per Schedule 2
Annex I - III w/ carve outs, plus additional info
What happens for Rule 13 if several transactions in last 12 months
Aggregate transactions (Rule 16)
What Rule gives NOMAD three tasks
1
What is the threshold for when related party transactions must be disclosed
If exceeds 5% in any class test + with RP
What Rule requires AIM C to have RIS to disseminate info
10
Average period for admission to AIM
12 - 16 weeks
After what period of suspended trading will admission be cancelled
6 months (Rule 41)
Where are the ‘class tests’ for Rule 12 and 13?
Schedule 3
Who is tied by the lock-in (if applicable)
Related parties or applicable employees
What are the NOMAD’s 3 tasks
Determine if C appropriate, manage float and provide guidance
What is the implication under 19(1) FSMA for AIM being RIE
Exempt from 19(1) FSMA (285(2))
Four tax benefits of AIM
CGT, IHT, SD and ER
Why does DTR 5.1 apply to AIM
‘Issuer’ includes C w/ shares on ‘prescribed market’ - e.g. AIM
What is a ‘substantial transaction’
Exceeding 10% in any ‘class test’
What market is AIM NOT (which MM is)
Regulated Market
Does the admission doc have to be approved by FCA?
No
What is an example of AIM designated market
NASDAQ
What still has to be produced, even if no prospectus required
Admission doc
CGT benefit of AIM
If transferring shares as gift, can holdover CGT
What is the process for pre-admission if fast track
Provide additional info + make pre-admission announcement 20 BD before admission
What two provisions require disclosure of deals by significant Ms
Rule 17 + DTR 5.1
How to make pre-admission announcement under AIM Rule 2
Provide info to exchange, who then publish via RNS
Cons of AIM (x6)
Riskier, NOMAD + broker, less liquidity, no market capitalisation, less prestige, lock-in
When must annual accounts be sent to Ms and under what two provisions
No later than 6 months after relevant period - Rule 19 + 442 CA
Powers of AIM Disiplinary Committee
Fine w/o limit, censure, cancel admission, and censure/remove NOMAD
What are related parties for Rule 13
Ds, substantial M, family, Ts etc
What provision requires dealing policy w/ Ds etc.
Rule 21
What is the importance of the Dealing Notice
Admission granted when LSE issues Dealing Notice
What Rule requires pre-admission announcement 10 days before
AIM Rule 2
When is the pre-admission stage for AIM - how many days before
10
Why is it not called listing for AIM
Bc not listing on Official List
Under what Rule is the dealing notice
6
Who are ‘applicable employees’ for Rule 21 and per what
Employees who are not Ds but discharging managerial responsibilities - 3(25) MAR
What two parties do AIM Rules require
NOMAD and broker
When to publish prospectus if being used + provision
6 working days before end of offer (PR 3.2.3R)
What is a ‘quoted applicant’
Securities traded for 18 months on AIM designated market
Who has responsibility for admission doc, and under what Rule
Ds and company: Rule 31
What Rule requires that shares be freely transferable
32
IHT benefit of AIM
If held for 2 years, 100% IHT on death of AIM M
Where is info to disclose for Rule 12 + 13?
Schedule 4
What is the implication of having a less liquid market on AIM
Fewer investors to buy shares
What happens to C if ceases to have NOMAD
Suspend trading + admission cancelled if not replaced within 1 months
When can admission doc be published, if used
On day of admission
Is there a ‘comply or explain’ rule under QCA?
No
What provisionS cover contents of Admission doc
AIM Rule 3 + Schedule 2
What is the Committee who can discipline for breach of AIM Rules
AIM Executive Panel & Disciplinary Committee
When is the Placing Agreement signed in admitting to AIM
Evening of stage 3 - application docs
Rule that requires disclosure of substantial transactions
12
Pros of admitting to trading on AIM instead of MM
Less stringent Os, less disclosure, simpler CG, more flexible, tax advantages and no minimum shares in public hands
What is a ‘significant M’ for Rule 17
Person w/ 3% or more of shares
What does the general duty of disclosure under Schedule 2 para k reflect
87A(2) FSMA
Why will admitting to trading on AIM not usually require prospectus
85(2) doesn’t apply, and only advertise to institutional investors so also exempt under 85(1)
What defines a ‘Regulated Market’
FCA Handbook
What is the NOMAD’s declaration
Confirms compliance w/ AIM Rules + eligible to admit
Must AIM C comply w/ CGC?
Can, but need not
What CG must AIM C comply w/
Quoted Cs Alliance
Do LR apply to AIM?
No - AIM Rules instead
What Rule requires AIM C to disclose details of CG
26
How does the requirement of having NOMAD + broker for AIM compare to sponsor on MM
For MM, only need sponsor at certain times - NOMAD and broker required at all times
What Rules apply to NOMADs
AIM Rules for NOMADs
Example of fewer disclosure requirements because on AIM instead of premium MM - financial
N/A 3-year trading history
Where is the info that must be included in pre-admission announcement
Schedule 1
What is a ‘dealing policy’
Agreement w/ Ds and applicable employees for ‘close periods’ and clearance for dealing
What Rule requires general disclosure of price sensitive info on an ongoing basis
Rule 11
What Rule states lock-in if less than 2 years’ revenue
AIM Rule 7
How long is the lock-in under AIM Rule 7
1 year
Under what Rule can trading be suspended
40
What DTR does Rule 17 on significant Ms reflect
DTR 5.1
What market is considered Regulated Investment Exchanges
AIM only
SD benefit of AIM
No SD since 2014
What is the con of no market capitalisation on AIM
Doesn’t show real value of company
What is the third stage of admitting to AIM
Application docs
What Rule gives possible sanctions for breaching AIM Rules
42
What markets are Prescribed Markets
MM and AIM
Why would you wait to publish admission doc until day of admission
Minimises time for needing to publish supplementary
When is it not possible to delay disclosure of info under Rule 11 bc of e..g impending development or negotiations
If Article 17 MAR applies
What provision shows that AIM is RIE so exempt from 19(1)
285(2) FSMA
What 2 provisions require disclosure of transactions by PDMRs and persons closely associated
DTR 3.1 and 19 MAR
What requires C to publish working capital statement in admission doc
Schedule 2 para c
