Overview
Some clients may see disclosure results generated under the Major: United Kingdom - AIM Listing rule at thresholds lower than 5%, even when they are relying on the UK Investment Manager exemption under the Financial Conduct Authority's (FCA) Disclosure Guidance and Transparency Rules Chapter 5 (DTR 5).
This article explains why this happens in the context of Alternative Investment Market (AIM)-listed companies and important considerations.
Why This Happens
AIM-listed companies can stipulate in their Articles of Association that all significant shareholders disclose relevant changes to their shareholdings without delay.
For the purposes of AIM:
A significant shareholder is typically defined as any person holding 3% or more of any class of AIM security (excluding treasury shares).
A relevant change is generally a movement above 3% that increases or decreases the holding through any single percentage.
The AIM Rules for Companies reference compliance with DTR 5 in general terms, and it does not appear that the Investment Manager exemption has been explicitly considered within the AIM framework. As a result, the interaction between the AIM Listing Rules and the exemption is not entirely clear-cut.
In cases where the AIM-listed issuer has not introduced additional disclosure requirements in its articles of association, the obligation to disclose at 3% under AIM may be considered ambiguous, and there is no clear or explicit requirement to do so.
This means the rule may flag potential disclosures at the 3% threshold under our conservative, best-efforts approach.
What to Do
Given this regulatory ambiguity, we recommend seeking confirmation from local counsel or directly from the issuer to determine how to interpret and apply the AIM disclosure requirements in light of the Investment Manager exemption.