I Understand that the New Prospectus Directive will come into Force on 1 July. What Impact will this have on an AIM Float?
This will depend on how much money you are trying to raise and the number of people to whom you intend to offer the shares. The biggest change to the current AIM prospectus will occur if you are raising more than EUR 2.5 million (about £1.7 million) and you are offering shares to more than 100 people. If that is the case, the prospective directive (PD) will apply and the company will need to produce a PD prospectus. This will have two main implications for the transaction: 1)the PD prospectus will be required to offer more detailed information in certain areas than that currently required under the AIM Rules and current legislation, namely the Public Offer of Securities Regulations (the "POS Regs"); and, 2)the PD prospectus will have to be approved by the UK Listing Authority in the same way as companies applying for a full listing. If the transaction falls beneath either the EUR 2.5 million or 100 persons threshold, you will not be caught by the PD. The Financial Services Authority ("FSA") is currently consulting on what should happen in these situations and it is likely that an AIM Admission Document will need to be produced, similar to the ones currently in use. There will be other changes with which you, as an adviser, will need to be familiar. HM Treasury and the FSA are trying to minimise (in so far as they have any discretion over this EU legislation) the impact of the PD. However, one inevitable impact is that the POS Regs, which set out the content requirements for current AIM prospectuses, will be repealed. Following initial consultation, it seems that the FSA's preferred option will be to replace the POS Regs with one set of rules applicable to companies listing on either AIM or the Official List, albeit with derogations for AIM companies. Another big change worth mentioning to the company is that from 1 July the fast track admission route from AIM to the Official List will no longer be available.
Andrew Blain is a partner specialising in corporate finance with commercial law firm Shepherd+ Wedderburn 44 (0)131-473 5120