The London Stock Exchange has published a wide-ranging discussion paper on possible changes to its AIM rule books. The paper’s main areas of focus include the admission criteria for AIM, ensuring consistency of approach between nominated advisers when considering a company’s appropriateness for admission and corporate governance requirements.
The most substantial change, if implemented, would require new AIM candidates to have a minimum level of ‘free float’ (shares not held by major shareholders or directors). This would be a significant departure from the existing regime, which does not prescribe a fixed percentage or value of shares that must be in public hands (although it is a factor that may impact on a company’s suitability for admission). Many view AIM’s existing flexibility here as an important distinction from the stricter rules applying to companies on the Exchange’s Main Market, and it is unclear how popular a change would be. As the Exchange acknowledges, most investors interviewed for the recent QCA RSM Small and Mid-Cap Investors Survey 2017 thought that an enforced minimum free float would be unnecessary and burdensome. At this stage, the Exchange considers a qualitative approach more appropriate than mandating a minimum level, but it seeks views.