Oulook: Undermining AIM

AT THE height of the South Sea Bubble, a large sum of money was raised on the stock market "for carrying out an undertaking of great advantage, but nobody to know what it is". There are echoes of this exaggerated exuberance in the present proliferation of cash shells floating on the Alternative Investment Market. Yet the London Stock Exchange is surely overreacting by proposing that no company raising less than pounds 3m should be allowed to float.

The purpose of this floor is to ensure the issue is large enough to attract institutional money, which in the LSE's view should in turn allow for some degree of corporate governance control. In my experience, institutional involvement rarely guarantees anything, while the idea that the sort of punters who play the Alternative Investment Market need protecting from their own stupidity is just plain patronising. Caveat emptor is all that's needed to govern AIM. All else only undermines AIM's high risk, potentially high reward purpose. I, for one, will not be complaining of regulatory failure if the present exuberance ends in tears.