Key Highlights
- The London Stock Exchange (LSE) is addressing potential “market abuse” from bulletin board users and social media influencers to improve Aim’s appeal.
- Aim companies are facing “unacceptable public abuse,” which has deterred some from listing on the junior market.
- The LSE plans detailed referrals of incidents to enforcement agencies, encouraging companies to do the same for indisputable evidence.
- Market responses indicate strong support for Aim’s unique role in supporting growth companies and private markets.
The London Stock Exchange: Addressing Market Abuse on AIM
The London Stock Exchange (LSE) has taken a firm stance against “market abuse” from bulletin board users and social media influencers, aiming to bolster the Alternative Investment Market (Aim), which has seen a decline in listings. This move comes as Aim prepares for its 30th anniversary amid concerns that public abuse is discouraging companies from listing.
Market Abuse on AIM
The LSE’s concerns stem from a pattern of inappropriate behavior by bulletin board users and social media influencers, which has been flagged to the City regulator. According to Jason Alden at Bloomberg, the LSE identified instances where Aim companies were subjected to “unacceptable public abuse,” leading to a decrease in flotations and an overall decline in the market’s appeal.
Strategies to Improve AIM
To address these issues, the LSE is planning detailed referrals of incidents to enforcement agencies. The exchange also encourages companies and other stakeholders to report such behaviors, emphasizing the need for clear evidence. Charles Hall from Peel Hunt, a City investment bank, highlighted that the “unacceptable public abuse” on bulletin boards can harm trust in public markets.
“Bulletin boards are the wild west of investing,” Hall stated. “The ability to be anonymous and post misleading or abusive content damages trust in public markets and needs to be addressed.”
Impact and Future Outlook
The LSE’s review found that market responses showed a “strength of feeling” for Aim, noting its unique position between private and main markets. However, the decline in listings has prompted the exchange to consider changes, such as encouraging a founder-friendly environment. The FCA has also confirmed that knowingly sharing false or misleading information about publicly traded companies is a breach of UK Market Abuse Regulation (MAR).
“We have been discussing with the Financial Conduct Authority our concerns in respect of the conduct of certain platforms, social media influencers and bulletin board users,” said LSE. “We would encourage companies, market practitioners and bulletin board users who have reasonable cause for concern to report matters.”
The LSE’s efforts come at a critical time as the government encourages savers to invest in stocks and shares. The strong response from Aim stakeholders indicates the importance of maintaining investor confidence in this market.
Conclusion
The London Stock Exchange’s actions reflect a broader effort to ensure that Aim remains a viable platform for growth companies, despite challenges posed by market abuse. By working closely with regulatory bodies and encouraging transparency among all participants, the LSE aims to restore trust and support in this crucial segment of the financial markets.
