Fears for AIM are off target

A new European Union directive, officially announced last December and due to be implemented in all member states by the summer of 2005, had placed a new regulatory stricture upon all markets.

But with the agreement of bodies such as the department of trade and the Financial Services Authority, AIM has been allowed to sidestep the new regulations and will continue to use its existing rules.

‘There will be no impact on the market or the level of regulation,’ said a stock exchange spokesman.

The EU’s new ‘prospectus directive’ seeks to harmonise the requirements for the drafting, approval and distribution of a prospectus for public offers or admissions to a regulated market. It means a single visit to a national watchdog – such as the UK’s FSA – would lead to the granting of fundraising ‘passports’ for the whole of Europe.

The move has been widely applauded – but concerns have grown about the implications for AIM. Chief among these is that it would drive up costs for public offers as the prospectus under the new regulations would require the same information to be provided, whether shares are traded on a main or secondary market.

Since its inception in 1995, AIM has raised more than £7bn and attracted the business of more than 1,200 companies. In 2003 alone, 162 new companies joined AIM, raising over £1bn. On its own, AIM accounted for 60% of all initial public offerings (IPOs) in Western Europe last year.

The number of shares traded on AIM more than doubled from 24.8 billion in 2002 to 54.7 billion and the value of shares traded rose from £3.5bn to £6.6bn over the same period.

‘AIM is a great market,’ said Chris Serle, a corporate finance partner at BDO Stoy Hayward.

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