AIM rules are 'evolution not revolution', say advisers
Corporate financiers play down fears that new rules recently introduced on AIM signal the beginning of regulatory creep on the London Stock Exchange’s junior market
This year AIM launched fresh regulation for oil and mining companies, which
will require more detailed disclosures of natural resource assets and stricter
verification from independent experts.
Currently the alternative market is consulting on plans to monitor trading on
third party platforms more closely, in an effort to prevent insider trading and
leaks of confidential information.
Advisers, however, believe that the new rules will not affect AIM’s strong
selling points, which have centred on flexible, light regulation. The market now
consists of 1,528 companies, worth £74.1bn, which have flocked to the exchange
to take advantage of the favourable regulatory environment.
Adam Hart, head of corporate finance at KBC Peel Hunt, says the changes will
not cause an increase in regulation and have been introduced to clarify rules
and establish greater consistency. ‘The AIM rules that were drafted 11 years ago
were based on very broad principles. The new rules are aimed at achieving
greater consistency and are not a wholesale change,’ Hart says.
Philip Secrett, capital markets partner at Grant Thornton, says the
regulatory changes on AIM signalled a refinement of the current rules rather
than a complete regulatory overhaul. ‘The new regulatory changes are an ongoing
refinement of the rules as things change. This is an evolution rather than a
revolution,’ Secrett says.
Tom Troubridge, head of London capital markets at PwC, says AIM has changed
regulation to avoid any market failures.
‘The LSE is conscious that AIM has been a runaway success and is the only
serious international SME market. AIM has changed the rules to prevent things
going wrong, but the changes have been sensible,’ Troubridge says.