All companies listed on the AIM market have until 20 August 2007 to comply with regulations requiring detailed information to be included on their website. AIM is the London Stock Exchange's market for smaller growing companies.
According to a recent survey carried out by Investis, only six of the top 100 AIM companies' websites currently achieve full compliance with these regulations. The Investis research reveals that less than one-third of the companies surveyed achieved a compliance score of over 50%, with one company not even having a website. More information on the survey can be found at the Investis website.
The specific regulation is Rule 26 of the London Stock Exchange AIM Rules for Companies, issued in February 2007. A copy of these rules is available via the London Stock Exchange website.
Rule 26 provides that all AIM companies must maintain a website, which should include certain detailed up-to-date information. A high volume of information is required. The information ranges from a description of the business of the AIM company, to details of any restrictions on the transfer of its AIM securities.
In addition, the website should display the constitutional documents for the AIM company and copies of any communications that have been sent to shareholders in the previous 12 months.
Investis found that most AIM companies provide a basic level of investor relations content, but the majority overlook much of the detail that the regulator deems necessary.
It is not only regulatory pressure that should motivate AIM companies to provide this information. The research has, unsurprisingly, also highlighted the vital role that websites can play in attracting investors. Potential investors will question why they cannot get a full picture of a company they are considering investing into.
With the deadline now only one week away, the London Stock Exchange has made it clear that Rule 26 will be treated in the same way as any of the other AIM rules and that AIM companies are expected to comply. Companies caught by these regulations should undertake checks to ensure that they meet the requirements of Rule 26.