London Stock Exchange Issues Two Consultations On AIM Rules - Proposals For New Criteria For “Cash-Shells” And Changes To AIM Rules Resulting From The UK Implementation Of The Prospectus Directive

The London Stock Exchange today issued two consultation notices seeking views from market participants on proposed changes to the AIM rules.

The Exchange is proposing changes to the criteria governing the admission and conduct of Investing Companies (“cash-shells”) on AIM along with other technical rule changes in relation to the role of nominated advisers and sanctions available to the Exchange. The main proposal is to introduce a minimum fund-raising requirement for Investing Companies of £3 million in cash, together with rules mandating that the company make a significant acquisition within twelve months of its admission to AIM.

The Exchange is also consulting on proposed changes to the form and content of AIM admission documents, following the expected UK implementation of the Prospectus Directive on 1 July 2005. From this date, the existing UK Public Offer of Securities (POS) Regulations will cease to exist. As a consequence, the Exchange is proposing to adopt a new standard based on the Prospectus Directive, but carving-out significant elements deemed inappropriate for AIM.

Commenting on the two consultations, Mat Wootton, Deputy Head of AIM, said:

“These consultations are designed to ensure that AIM maintains high regulatory standards and keeps up to date with best market practice, whilst ensuring that the AIM rules continue to provide flexibility for AIM companies and advisers."

The deadline for responses to both consultations is 4 March 2005.