With the introduction of new Rule 26 the London Stock Exchange has promoted the website to the status of key reporting tool for AIM-listed companies. The new rule requires all AIM-listed companies to feature a statutory minimum of Investor Relations (IR) information on their website, thus completing the website’s transition from being purely a marketing and PR tool, to becoming the principal medium through which a listed company communicates all information with investors and the public at large.

AIM-listed companies have until the 20th August 2007 to comply with this new rule, placing them under pressure to publish comprehensive IR information online. Listed companies that have not already done so will need to move quickly and will, no doubt, be keen to find a cost-effective solution which enables them to easily publish and edit information online.

The new Rule 26

The purpose of the new rule is to provide investors and other interested parties adequate - and current - information on an AIM-listed company at all times. To satisfy this requirement, AIM-listed companies must publish the following key information on its website:

• a description of its business and, where it is an investing company, its investing strategy;
• the names of its directors and brief biographical details of each, as would normally be included in an admission document;
• a description of the responsibilities of the members of the board of directors and details of any committees of the board of directors and their responsibilities;
• its country of incorporation and main country of operation;
• where the AIM company is not incorporated in the UK, a statement that the rights of shareholders may be different from the rights of shareholders in a UK incorporated company;
• its current constitutional documents (e.g. its articles of association);
• details of any other exchanges or trading platforms on which the AIM company has applied or agreed to have any of its securities (including its AIM securities) admitted or traded;
• the number of AIM securities in issue (noting any held as treasury shares) and, insofar as it is aware, the percentage of AIM securities that is not in public hands together with the identity and percentage holdings of its significant shareholders. This information should be updated at least every 6 months.
• details of any restrictions on the transfer of its AIM securities;
• its most recent annual report published pursuant to rule 19 and all half-yearly, quarterly or similar reports published since the last annual report pursuant to rule 18;
• all notifications the AIM company has made in the past 12 months;
• its most recent admission document together with any circulars or similar publications sent to shareholders within the past 12 months; and
• details of its nominated adviser and other key advisers (as might normally be found in an admission document).

The implications of compliance

Coming soon after the requirements of the Companies Act , organisations are once again faced with the urgent task of updating their website in order to remain compliant. To achieve this, companies will need to ensure that proper procedures are in place to ensure the accuracy of the information, and that the information can be easily updated when required. To remain complaint, AIM-listed companies will have to find the technology which is best suited to enable them to update their website content easily and accurately.

Which is the best option?

The easiest solution is to outsource online Investor Relations to a specialised provider, such an organisation being charged with editing and updating the IR section of the website. As part of these services an increasing number of listed companies are able to provide IR content online via sophisticated means of content delivery, including:

• Share price information and interactive charting tools
• RNS feeds and email news alert services
• Interactive annual and interim reports
• Webcasting services

These services - and their associated fees - are probably best suited to major corporations, but they can be valuable to AIM-listed companies that want to be seen to be at the cutting edge. Tech companies could be an example.

Another option is to outsource the editing and publishing of the key corporate information to a more general online service provider. Most probably this provider will be the organisation that built the website, as it will have all the necessary technical expertise to update the content of the website. However, this option leaves a company at the mercy of the efficiency of the provider, which might be slow to update urgent information.

If not already in place, an effective solution is to migrate the website onto a dedicated content management system (CMS). A good CMS allows non-technical users to make changes to an existing website with little or no training, thus enabling in-house staff to manage website content quickly and easily. Once in place, a CMS should be a very cost-effective means of ensuring a website is current and compliant.

The market offers a wide variety of Content Management Systems. There are broadly two categories of CMS packages: proprietary and Open Source.

Proprietary CMS, whilst offering a proven framework accompanied by service and support agreements, are usually priced on a ‘per seat’ and ‘per installation’ basis, licences being required to operate the software. This can make running costs high and owners are frequently tied to a single supplier.

Alternatively, Open Source software is free software. Not always ‘free of charge’, but always ‘freely distributed’, ‘freely accessible’ and ‘freely modifiable’. Commercially supported Open Source content management systems such as ‘MySource Matrix’ are developed and supported by commercial software organisations, and so are better tuned to the requirements of businesses than those provided by ‘community’ initiatives. Commercially led CMS offers all the attributes of a proprietary solution - a well-defined product roadmap, high quality documentation, professional quality control and strong, responsive support – but with the flexibility to use different suppliers for support and modification.

Conclusion

Listed companies are facing increasing pressure to provide extensive and current information to their investors. New regulations imposed by the Companies Act have already increased the administrative burden and the forthcoming changes to the Stock Exchange’s Rule 26 will oblige companies be even more diligent. Many companies will have systems in place to ensure they remain complaint, but others should urgently review their reporting process. Never before has the need for an effective, and up to date, website been so compelling. The good news is that technology is readily available to help smooth the process.

For further information about any of the above please contact us on telephone number +44 208 871 1330 or email charleslouis.moreau@intendance.com.

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