Confusion on the Treatment of AIM Companies under MAR
The Market Abuse Regulation will apply from 3 July 2016 to all UK listed companies. There is a relaxation for AIM companies, but it appears that due to EU delays elsewhere it is impossible to apply it.
The Market Abuse Regulation requires UK quoted companies to maintain an insider list. Whilst UK listed companies have maintained insider lists for many years, new rules which apply from 3 July 2016 will place a significant additional burden on UK listed companies. The additional requirements include:
A need to ensure that they can provide their insider list position as it stood at any time over the past 5 years;
A requirement to date and time stamp updates to the list;
A requirement to retain additional data to identify each insider. Such data includes home address and personal home and mobile phone numbers;
A requirement to keep this data up to date at all times plus a requirement to date (and in some cases) time stamp changes.
The intended AIM relaxation
AIM companies must still be able to produce an insider list on request showing such information as:
The date and time at which a person gained access to inside information;
The date and time at which the person ceased to have access to inside information;
Their function and reason for being an insider;
First name, surname and birth surname;
Work direct line and work mobile phone number;
Company name and address.
The first AIM relaxation is that companies will not be required to maintain an insider list at all times provided that they are able to deliver one when requested and can show that they have taken all reasonable steps to ensure that any person with access to inside information acknowledges their legal and regulatory duties and is aware of the sanctions applicable to insider dealing and unlawful disclosure of inside information.
The second AIM relaxation is that companies are also freed from the requirement to include personal mobile and home telephone numbers and personal address in their list “if this information is not readily available to the company at the time of the request by the authorities”. Bearing in mind the nature of insiders and their typical position in the organisation, we suspect that most AIM companies will find it difficult to access this relaxation as they will have this information available somewhere in the organisation.
The third AIM relaxation is the most useful in the short-term. AIM companies should not have to comply with the new provisions until 3 January 2017 (a six month delay).
Do these relaxations apply?
It would seem not; it would seem that due to a late running processes in the EU, AIM companies must comply with the full provisions of MAR from 3 July 2016 with no relaxations.
Why is this?
For the AIM exemption to apply the Alternative Investment Market must be registered as an SME Growth Market. It is highly likely that AIM would pass the required test but, for the MAR relaxation to apply, AIM must be registered as an SME Growth Market under MiFID II. According to the European Securities & Markets Authority, MiFID II will not be passed into law until 3 January 2018. As a result, the MAR relaxation for AIM companies technically does not apply as AIM cannot be registered under the provisions of, as yet, non-existent legislation. Arguably this means that the full scope of MAR will apply to AIM companies with no relaxations and they must comply from 3 July 2016 rather than 3 July 2017.
It is hoped that some work-around will be introduced but, at the moment, the position is unclear and AIM companies may need to plan earlier than they had anticipated.