A major private investor body has called for a host of governance reforms to the Alternative Investment Market (Aim), which it criticised as existing predominantly for the benefit of stockbrokers and company directors.
ShareSoc issued a four-page missive which outlined 11 suggestions for how London's junior market could be made a more inviting place for private investors.
High among the calls were tightened enforcement of existing regulations, the splitting of nominated advisor and corporate broking roles, a corporate governance code and a limitation on share placings - particularly those which are heavily discounted and where there is no open offer. All Aim directors should also "be fluent in both written and spoken English".
Veteran Aim investor Paul Mumford of Cavendish Asset Management said the current system works "reasonably well", although accepted "some improvements could be made". He said one thing he found "unpalatable" was the fact that Aim companies could delist, citing the example of All Leisure, which then deprives private investors of accessing the value of a company they have invested in.
Gervais Williams, managing director of Aim-traded Miton and long-term Aim investor, agreed the market was "far from perfect", but warned about overregulation.
"If you try to eliminate too much risk, you eliminate returns too," he said. He highlighted the biotech sector as one where "a lot of money would have been left on the table" had Aim not been there to host it.
Mr Williams added that a much less commented on aspect of Aim was the fact that the nature of businesses on it had changed and many now had paid dividends.
