Many Firms Unprepared For New London AIM Rules

by Robert Lee, Tax-News.com, London

01 May 2007

Following the recent announcement of new rule changes for AIM, there are fears that many companies will not be ready for the August 20th 2007 deadline set by the London Stock Exchange, according to compliance specialist IR26 Ltd.

These new rules are being brought in by the Exchange to improve policing of regulations. They also include the introduction of enhanced disclosure requirements for AIM companies, such as mandating all AIM companies to maintain a website and to display on it details of core management and financial information, including admission documents.

The "AIM Rules for Nominated Advisors (Nomads)" has been introduced in addition to the existing "AIM Rules for Companies" and codifies the role and responsibilities of Nomads based on best industry practice. The new rulebook provides examples of the types of activities the Exchange expects Nomads to undertake in order to confirm to the Exchange that a company is suitable for AIM, and ensure it is able to comply with AIM Rules on an ongoing basis.

A recent survey carried out by specialists Ir26 Ltd revealed that some 422 companies do not yet have their required website, and this especially applies to investment companies and cash shells, which in recent years have been a source of some controversy.

Ir26 was established to assist companies on the AIM market by helping them manage the complexities of internet compliance.

The deadline for compliance is now just over 4 months away. With increased staffing to police the new regulations, as well as fines of up to GBP50,000 and the possibility of expulsion for companies failing to abide by the new rules, IR26 Ltd warns that the need for companies to organise a compliance solution in good time is essential.

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