AIM review will attack nomads

The Stock Exchange will launch a fierce attack on lapses among nominated advisers to companies on the Alternative Investment Market when it publishes its first annual review of AIM next week.

The Exchange will highlight inadequate supervision by certain nominated advisers (known as nomads) of clients, resulting in companies delaying or omitting to publish market-sensitive information.

Companies must retain a licensed nomad to trade on AIM. Nomads act as both advisers and regulators to the company, a role that has troubled some advisers.

The review will recommend minimum numbers of advisers within a nomad assigned to oversee companies and will require them to maintain accurate reporting standards. It is not expected to publicly censure any individual nomad.

While AIM had a successful year in 1996, a number of high-profile incidents took the gloss off. One nominated adviser, Gerrard Vivian Gray, was privately censured over supervisory lapses at two of its clients, Firecrest, and Optical Care (Bermuda) Ltd.

Gerrard Vivian Gray subsequently stopped taking on new clients and has resigned from all of the companies it advised, in advance of its merger with brokers Greig Middleton. All but two companies cast adrift by GVG have found new advisers.

Neill Clerk Capital, another nominated adviser whose roster of 28 AIM companies is the largest of any nomad, also came under scrutiny last year. A spokeswoman said the firm was not expecting any criticism in the Stock Exchange's review.