In late December 2009 the London Stock Exchange (“LSE”) announced proposed changes to the Rules of its Alternative Investment Market (“AIM”).  The changes require companies whose shares are listed on AIM to disclose details of directors’ remuneration on an individual basis in their annual audited accounts. For each director the following will have to be disclosed:

• emoluments and compensation;
• share options and other long term incentive plan details; and
• the value of any benefits through defined benefit or defined contribution pension schemes.

According to the notice proposing the changes, the LSE intends that this additional disclosure requirement must be implemented by AIM companies with a financial year end of 31 March 2010 or thereafter. 

The LSE notice also includes proposed amendments to the guidance notes to AIM Rules 14 (Reverse Takeovers) and 19 (Annual Accounts) to give AIM companies the option to use electronic communications to send accounts and admission documents to shareholders electronically (as an alternative to in printed form).  To avail of this option, an AIM company will be required to satisfy number of conditions, including:

• that a decision to use electronic communication to shareholders has been approved by shareholders in a general meeting of the AIM company; and
• that shareholders individually:
  • must be contacted in writing to request their consent to receive accounts by means of electronic communication and, if they do not object within 28 days, their consent can be considered to have been given;
  • will be able to request at any time in the future that accounts be communicated to them in writing; and
  • must be contacted alerting them to the publication of the accounts on the AIM company’s website.

The consultation period in respect of the proposed changes ended on 15 January 2010. It is expected that the results of the consultation will be published in the coming weeks with the new Rules to be finalised shortly afterwards.

The Irish Stock Exchange has not yet proposed amendments to the Rules of its Irish Enterprise Exchange (“IEX”) to address the changes proposed in the LSE’s consultation notice.  However, given the nature of the proposed changes and the logic for the IEX Rules to respond to the AIM Rules changes we anticipate that similar changes will be made to the IEX Rules in due course.