AIM is the London Stock Exchange's international market for smaller growing companies, ranging from young, venture capital-backed start-ups to well-established, mature businesses seeking to expand.
The Exchange's objective in setting up AIM was to offer smaller companies (in the UK and abroad and from any sector) the opportunity to access London's capital markets via market with a pragmatic and appropriate approach to regulation.
Since its launch in 1995, more than 2,500 companies have joined AIM - raising billions of pounds in the process, both through initial public offerings (IPOs) and further capital raisings. Many companies have subsequently transferred to the Exchange's Main Market.
Many of the companies listed are offshore vehicles and the Isle of Man is the leading provider of these vehicles.
Simcocks is dedicated to providing its clients with expert and responsive services in relation to the listing of Isle of Man incorporated company vehicles on AIM.
Simcocks is a leading Isle of Man law practice. Our Investment Funds and Capital Markets lawyers have an international background and provide a wide range of services.
The team is a balanced mix of enthusiastic new recruits, experienced Advocates and industry regarded experts. It has a proven record of working in partnership with leading law firms to effect international transactions for clients, including market listings.
Our experience in this field means we can give clients the expert and responsive service they need to enable matters to be concluded swiftly and effectively.
We offer a competitive service with all fee earners encouraged to take a realistic and commercial approach to addressing the needs of clients to ensure we add tangible value.
In a typical listing, we act in conjunction with the English legal advisers to the company and provide advice and assistance on all Isle of Man aspects of the transaction. Among other matters, we will draft or review and amend the Memorandum and Articles of the company; review the admission document to ensure compliance with Isle of Man law; review other documentation; and provide an Isle of Man legal opinion.
Post listing, we continue to act as required, including in relation to further fund raisings.
Transactions undertaken include the following:
advising the company on its admission to AIM and subsequently on a further placing of shares. The company was formed to invest in retail properties such as shopping centres, supermarkets and retail warehouses in Central and Eastern Europe. Simcocks also advised on the company's subsequent delisting.
advising the company on its admission to AIM. The company was formed to invest in commercial and certain residential real estate developments in India. Simcocks also advised on subsequent scheme of arrangement as part of which the shares were delisted.
advising the company on its admission to AIM. The company was formed to invest in the development of new commercial properties and redevelopment of existing properties in the Ukraine.
advising the company on its migration from Luxembourg to the Isle of Man and its simultaneous admission to AIM. Greenko intends to become a leading owner and operator of clean energy projects in India.
advising the company on its admission to AIM. The company was formed to invest in foreign direct investment eligible Indian real estate development projects. Simcocks also advised on the company's subsequent delisting.
advising the company on its admission to AIM. The company was formed to invest in German commercial real estate, with a primary focus on retail assets.
advising the company on its admission to AIM and its subsequent admission to Main Market. Wichford is a property investment company with a portfolio focused on properties occupied by Central and State Government bodies in both the UK and Continental Europe.
A listing on AIM involves the following participants and service providers:
AIM is suitable for smaller companies from any sector and from any country. The company is likely to be advised by UK solicitors and reporting accountants and by financial public relations and investor relations consultants. Where the company is incorporated offshore (for example, in the Isle of Man) lawyers in the jurisdiction of incorporation will also be employed.
Shares are usually in uncertificated form and title is transferred by means of an instruction issued in accordance with the rules of the CREST system. For this purpose, a registrar/CREST service provider is appointed.
Every company joining AIM must appoint a Nominated Adviser (known as a Nomad), which must be approved by the Exchange. The role of the Nomad includes pre-vetting of the company, assisting it through the listing process and the provision of advice and assistance post listing to ensure that the company complies with its ongoing obligations. The Nomad will appoint its own legal advisers.
The broker is responsible for facilitating and promoting trading in the company’s shares on the market. In many cases, the broker is the same firm as the Nomad. The Broker may also appoint its own legal advisers.
Investors range from City institutions to small investors.
The Exchange has a specialist AIM team dedicated to providing advice, information and support for all AIM participants.
Isle of Man Companies suitable for listing on AIM can be incorporated under two separate pieces of legislation:
The Companies Acts 1931 – 2004 (the “1931 Act”); and
The Companies Act 2006 (the “2006 Act”; a company incorporated under this Act is sometimes referred to as a “New Manx Vehicle” or “NMV”).
Since the coming into effect of the 2006 Act, a number of listings have used companies incorporated under this Act and it is expected that this trend will continue. Advantages of the 2006 Act include the following:
In general, companies incorporated under the 2006 Act are simple, flexible and easy to administer.
The 2006 Act does not make the traditional distinction between public companies (plc) and private companies (Limited). Any company may offer its securities to the public. However, the name of any company may include the words “Public Limited Company” or “public limited company” or the abbreviations “PLC” or “plc”. Indeed, there is the further option to use the words “Limited” or “Corporation” or “Incorporated” or the abbreviations “Ltd” or “Corp” or “Inc”.
The prospectus requirements under the 2006 Act are far less detailed than those under the 1931 Act. The directors are required to ensure any prospectus (called an “offering document”) issued in relation to the company (i) contains all material information that investors would reasonably expect to be included in order to enable them to make an informed decision and of which the directors were aware at the time of issue of the offering document, or of which they would have been aware had they made such enquiries as would have been reasonable in all the circumstances; and (ii) sets out such information fairly and accurately.
These less detailed requirements are nevertheless onerous; but it is likely they will be fulfilled by the process of drafting, finalisation and verification of the prospectus undertaken for the purpose of compliance with the AIM Rules. On the other hand, with a 1931 Act Company, additional information may need to be inserted in the prospectus in compliance with the prospectus requirements of the 1931 Act.
The traditional concept of capital maintenance has been dispensed with. A 2006 Company may make a distribution (whether dividend or share buy back) or provide financial assistance or undertake other share capital reorganisations, provided a simple solvency test is met.
Companies incorporated under the 1931 Act remain available for use as listing vehicles in a suitable case, for example where there has been a previous listing under this Act and the promoters wish to replicate the same structure.
It is possible to establish an Isle of Man company (whether a 1931 Act Company or a 2006 Act Company) on a same-day basis. If necessary, a company can be formed with standard articles of association (or even “taken off the shelf”) and suitable articles adopted later, prior to the listing.
Simcocks can prepare articles which meet the requirements of the AIM rules. The articles can have incorporated therein provisions (such as pre-emption and notification of interests in shares) which are not mandated by either the 1931 Act or the 2006 Act, thus ensuring that the company not only complies with the AIM rules but has the “look and feel” of a UK company.
Note that it is possible to redomicile or migrate companies originally incorporated elsewhere to the Isle of Man. In this respect, Isle of Man legislation exists for both 1931 Act companies and 2006 Act companies. Jurisdictions which allow migration out include Jersey, the British Virgin Islands and civil law European countries. Migration is deemed not to create a new legal entity, or to prejudice or affect the continuity of the company which was formerly a company incorporated elsewhere and becomes a Isle of Man company.
It is not necessary for the prospectus/admission document to be submitted to any regulatory authority for approval. Accordingly, there is no question of the timetable to listing being delayed by approval in the Isle of Man having to be obtained.
As a corollary, the company may undertake a preliminary marketing of its shares on the basis of a pathfinder prospectus (with the usual "red herring" language” appearing on its face) without any Isle of Man implications.
Isle of Man companies listed on AIM can use the CREST system to hold and transfer their shares and other securities in electronic or paperless form. The articles will provide for shares to be in uncertificated form and for title to be transferred by means of an instruction issued in accordance with the rules of the CREST system. An investor applying for shares may elect to receive them in uncertificated form if such investor is a system member (as defined in the Uncertified Securities Regulations 2001) in relation to CREST.
The City Code on Takeovers and Mergers applies to an Isle of Man company listed on AIM only if it is deemed by the Panel on Takeovers and Mergers to have its place of central management and control in the UK, the Channel Islands or the Isle of Man. Ordinarily, where central management and control of the company vests in the Isle of Man, promoters (and potential investors) will have the comfort of knowing the Code applies. However, application of the Code can be avoided if desired by ensuring central management and control vests elsewhere. If this is done, tax advice should be sought in the relevant jurisdiction.
In recent years there has been considerable growth in the number of listings based on an Isle of Man incorporated company vehicle. Indeed, it appears the Isle of Man is the offshore jurisdiction of choice for AIM listings, particularly for Eastern European, Indian, Russian and Chinese businesses.
The Isle of Man is a common law jurisdiction and its company law is based on UK principles. Accordingly, City bankers and lawyers will find Isle of Man companies, documentation, practices and procedures familiar. In particular, the procedures for company borrowing and the registration of charges are similar to those prevailing in the UK.
An Isle of Man company listed on AIM should not be subject to UK tax as long as it is managed and controlled outside the UK. Needless to say, UK tax advice should be obtained in this respect.
With effect from 6 April 2006, the Isle of Man introduced a standard zero per cent rate of income tax/corporation tax for companies (except in relation to certain profits arising from banking, or from land and property in the Isle of Man).
Under this regime, the Isle of Man continues as a tax neutral jurisdiction facilitating efficient international tax planning; however, the “ring-fencing” of international and local tax bases associated with tax exempt regimes has been eliminated in compliance with current international requirements in relation to tax competition.