AIM

Question 1

What is the AIM

Answer 1

Provides market facilities for companies too new or too small to apply for full stock market listing
Can be interim stage to full stock market listing
Regulated by LSE
Less onerous listing requirements (fewer formalities, lower costs)
Can be described as quoted or traded of SE
Not described as listed (not on recognised sE)

Question 2

SD/SDRT

Answer 2

Not charged on AIM (recognised growth market)

Question 3

Risks with AIM

Answer 3

Liquidity Risk - may be more difficult to sell as smaller companies
Share dividend volatility - up and down
Equity Capital Risk - share price up and down/ supply and demand
Currency risk
Counterparty risk - organisation the investment is placed with, fails

Question 4

FTSE Aim Index Series

Answer 4

For young and growing companies traded on AIM

Have to be liquid and readily tradeable