New AIM Rules – adopting a Corporate Governance Code becomes mandatory
Amendments to the AIM Rules come into effect from 30 March 2018.
AIM Notice 50 implements the amendments to the AIM Rules, including AIM Rule 26, and provides for corporate governance code disclosures. Whilst the new version of the AIM Rules is coming into force on 30 March 2018, AIM companies are provided with a substantial period of time to prepare for the upcoming change and must ensure compliance with the new corporate governance disclosures by 28 September 2018.
Whilst good corporate governance has always been encouraged, adherence to a specific code has to date been optional. AIM companies are currently able to state that they have not adopted a corporate governance code. The revised AIM Rules mean that this ceases to be an option. AIM issuers will instead need to state which corporate governance code they apply, and detail on their website how they comply or depart from that particular code, giving an explanation for any non-compliance.
As long as it is a “recognised” code, a company is free to choose a code suitable for its particular size and development stage, for example either the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies or the UK Corporate Governance Code.
It is hoped that this new approach will enable investors to better understand a company’s approach to corporate governance. It also aligns with the shift in attitude towards recognising the importance of good corporate governance. It is essential that companies begin now to consider how they will comply with the proposed changes.
For further information on the AIM rules, corporate governance or any aspect of public equity and capital markets, please contact Helen Garner on +44 (0)1892 506 270 or Salim Somjee on +44 (0)1732 224 060