[MongOLian Public Limited Companies Trading securities in LSE Market (London Stock Exchange AIM Market)]

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Abstract

AIM Market has been in operation for over 10 Years and, in fact (End of February 2006) is about 1426 (UK 1200, 226 foreign) coMMerce Companies, with the Total Market Value of £ 65bn.

AIM Market differs from official list, mainly due to the different regulatory regime. In UK, stock records and monitoring of performance is fault of FSA. AIM stocks are regulated by intermediaries - Nomads - which in turn are regulated by LSE. Company listed on AIM sample the Number of benefits, for example, breaks exceptional rate and competition as the result acquisitions using portions without having to seek shareholder acceptance. AIM connecting companies are not required to have the track record.

AIM has been alternative market for smaller capitalization companies in UK, both for companies and appealing new moves from official list. AIM has temptations, but our general inference is that substantial benefits for issuers are not large, disclosure obligations and duties of application are, to realize, fairly equally, for example. We assume that affinity of AIM is due in part to better treatment, and partly motivated by LSE and nomads to sell AIM, but mostly because there is the significant spillover effect.

In last year of AIM, which are sold in the dynamic way by LSE, has sought to appeal to foreign companies. Firms in most markets around can be admitted To AIM, without the separate brochure.

THE key research working here is whether investors view as inherently less regulated than market from official list, and if you require the return premium for this.

We found that average age of AIM stocks was much lower than average age of populations of same dimensions as Official List - fact that it is identified as the risk factor. This makes it difficult to identify comparable populations in both markets. Instead, we conducted an investigation of large stocks that have been exchanged between two markets.

In the previous study using transaction data and Numbers, authors have shown that degree of risk - as measured by volatility - exchange of populations between markets is not significantly different before and after change. Any DIfferences in instability are very little, usually not statistically significant, and are inclined, if anything, to show the slightly lower volatility when AIM.

Further investigation of this result suggests that investors are not seeing significant regulatory differences between target and markets of Official List. Disclosure obligations is seen as equal in practice: most of nomads who claim in the sustainable manner "free float" so that ...