Marcus Stuttard has spent 16 years with the London Stock Exchange, almost exclusively working in primary markets roles. He has been involved with Aim for the past six years, three of which were as deputy head of Aim before he became head of Aim in April 2009.
How do you think Aim has performed against its original aims?
Aim is still very true to its original goals of providing a market for smaller growing companies coming to the market to raise capital for their growth and development. It continues to provide those additional spin-offs in relation to credibility, profile, ability to do acquisitions and keep employees. It's also provided investors with access to businesses often at an earlier stage of their development, and provided access to entrepreneurs to bring their companies to the market.
Some investors criticise the liquidity of some companies on Aim – what can the exchange to do encourage greater liquidity?
We've looked at whether we should have a minimum market capitalisation or free float to encourage liquidity but it's always going to be the nature of a smaller firm that there are going to be fewer shares available to trade. There are things we can do – trading platforms, tariffs, lobbying, educating companies around investor relations – that all contribute to liquidity.
The lobbying for VCT managers to buy in the secondary market, all of these things are about driving liquidity. We are also looking at ways in which there may be baskets of stocks that could form the basis of ETF products.
How can Aim protect its position?
There is a lot that the exchange does from a regulatory perspective that is vitally important. But there exists around Aim a network of intermediaries that doesn’t exist around any other growth market in the world. That is why Aim firms were able to raise £5.5bn last year in tough market conditions. That community and network is of critical importance. What we need to do is to ensure that the market environment continues to foster that infrastructure.
We are also active in lobbying to make sure the wider regulatory and fiscal environment fosters the growth of small and medium sized enterprises (SMEs). We've been lobbying to get an extension to the venture capital trust (VCT) investment regime and we've been pushing very hard to allow Aim companies to be included in individual savings accounts (Isas). On capital gains tax we want to make sure that SMEs are not disproportionately impacted and have lobbied for a reversion to taper relief.
When you introduced rule changes around the end of 2006 and early 2007 was it a reaction to Aim's size at the time?
We had no specific desire to reduce the size of the market or the number of Nomads but a set of laws written for a smaller, and predominantly domestic, market needed to be reviewed. Over the 15 years we've been through a number of iterations but the core rules remain the same. I can think of a couple of notable examples – cash shells, guidance notes for mining, oil & gas firms when we saw them becoming important sectors on Aim. It was for consistency. The big consultation at the back of 2006 that resulted in the Nomad rules in early 2007 was also about bringing consistency across the market about what the exchange expected from advisers.
We have seen a number of firms moving to the main market in recent times, do you still see this as a natural progression for Aim stocks?
For many, once they get to the size where they qualify for the FTSE benchmarks the additional liquidity they pick up means it makes sense. For some investors as well it makes sense. But it's all about choice – if a company still has acquisition plans then the Aim environment can suit them better so they stay on Aim, and for some the tax breaks also make sense.
Internationalisation has been a huge success for Aim – what have international companies brought to the party?
They have contributed to the size of the community that supports the market. Critical mass helps to attract other companies. It's important for UK companies to be sat alongside their international peers. There are some sectors where London is naturally strong – oil & gas, clean tech and property. A lot of those international companies have also brought investors with them. What we need to do is provide the right regulatory environment so that if investors want to access Vietnamese infrastructure but in an environment they are comfortable with, then they can.
How do you see Aim developing in the future?
More of the same – it should become a more mature market but based on the same fundamentals that we've got now, providing long-term capital as well as profile, visibility and liquidity. Looking at the wider macroeconomic environment, Aim is really important to the UK economic recovery. It provides finance to smaller companies. Aim is a vital part of the UK economic ecosystem – 260,000 people are employed by the UK's Aim companies. It's critically important for the UK economy.
