Exchange in sponsor `step-down'

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The London Stock Exchange is working on a compromise on its proposal to make sponsorship optional for companies listing on the alternative investment market, to be launched next month. The proposal, made in September, is designed to reduce entry costs to the new market. However, several investment institutions, including M&G, have said they would not be keen to invest in companies without sponsors.

The compromise will allow the option of a sponsor or an adviser, such as a firm of accountants, which would not be a full sponsor. The option of no sponsor or adviser would be removed from the plans.

The Exchange is struggling to find a way to define the role of the new adviser while avoiding giving the impression that the work of the adviser can be relied upon in the same way as a sponsor's work.