Small wonder

9 March 2007 By Nicole Lee

London’s smaller growth market really gets up the nose of US officials. Roel Campos is echoing similar comments from NYSE’s boss John Thain. But instead of lashing out at Aim as a regulatory black hole, they should consider why smaller US companies increasingly list abroad.

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Roel C. Campos, one of the Securities and Exchange Commission's four commissioners, is the latest highprofile American to criticise Aim, the London Stock Exchange's market for fastgrowing companies. I'm concerned that 30% of issuers that list on Aim are gone in a year, he told Dow Jones Newswires on the sidelines of the 11th annual SEC Regulation Outside the United States conference. That feels like a casino to me, and I believe that investors will treat it as such, he said.

John Thain, NYSE's chief executive, has said neither the LSE nor Aim have corporate governance standards equivalent to those in the US.

Campos could not immediately be reached for comment. However, he said his remarks were taken out of context, and denied that he felt Aim was a casino, according to the Financial Times. Rather, he meant that in general, if regulatory standards are ignored, an exchange could become a casino, he told the FT.

An LSE spokesman said he was surprised that Campos made comments which are so entirely wrong. Around 3% of companies listed on Aim are estimated to fail, rather than 30%. Aim's failure rate is about the same as the failure rate on the main market, which has more difficult admission conditions, he said.

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