UK Individual Shareholders Society
A CAMPAIGN MANAGED BY SHARESOC
How the AIM Market Should be Improved
This campaign was launched with a press release in June 2016 (although the problems
of the AIM market have been long-
The AIM market, which is run by the London Stock Exchange (LSE), has been criticised by many people for the quality of companies listed on the market and for the way it operates. ShareSoc and our Members think that some reform is necessary.
There is no denying that it is possible to invest in successful AIM companies but as any experienced AIM investor knows, doing so consistently and avoiding those that either never establish a profitable business, get delisted, go bust or otherwise become the walking dead is another matter altogether. Picking out the quality companies that will give a good return from buying their shares is not easy and in comparison with main market companies it is a minefield for inexperienced investors.
Over 3,500 companies have joined AIM in the last 20 years since the market was launched. How many are left? The answer is about 1,000. Now some will have moved to the main market, and some will have been taken over (not necessarily at a profit for the shareholders from their original investment), but clearly there is a very large amount of turnover in AIM companies. Many will have gone bust or been delisted. Or as Claer Barrett said in the Financial Times: "20 years of a few winners and many losers".
One only has to remember recent cases such as Globo and Silverdell, or companies such as Izodia, Versailles and Langbar, or the numerous oil/gas or mineral exploration companies some of which were of course simply fraudulent businesses. Do the few, sometimes massive, winners offset the losers? The answer is no. The AIM index has underperformed main market indices over the last 20 years.
The LSE has consistently defended the way AIM operates and claims it is one of the most successful small cap exchanges in the world. But many private investors would not agree.
The reputation of AIM is such that it actually puts off good quality companies from listing on it. Therefore SMEs that wish to raise equity for expansion are often discouraged from listing on AIM and this is damaging for the health of the UK economy.
But there are some simple ways to improve the AIM market without imposing large costs
on the market participants. ShareSoc has published a document which spells out exactly
what should be done. It is present on our web site here: Improving-
Summary of Key Recommendations:
These are a few of the key recommendations in our proposal:
These recommendations are spelled out in more detail with explanations for their need in the aforementioned document.
Update 1 -
To Support the Campaign
To support this campaign and register your interest, please use the form below to sign our petition. We will keep you informed on any news related to his campaign thereafter via email. The object of the petition is as follows:
To the Directors of the London Stock Exchange.
The signatories to this petition hereby request that actions are taken to reform the AIM market along the lines suggested by ShareSoc (please complete the form below and press the Submit button).
This campaign is aimed at improving the quality of the companies listed on the AIM market managed by the London Stock Exchange and reforming some of its operations so that investors are less likely to lose money as a result of investing in AIM companies.