Much has been written about the burdens of the Sarbanes-Oxley (SOX) Act for small cap companies. The costs of compliance have caused some US public companies to go private and others, that wish to go public, to look elsewhere. Elsewhere, means London’s Alternative Investment Market (AIM).
In 2005, US companies made up 11% of the international companies whose securities were admitted to AIM. Indeed, there are many perceived advantages for small cap US companies joining AIM. There is no SEC-like review of the AIM admission document for non-retail offerings by the UK regulators. AIM has no quarterly reporting requirements. Corporate governance under AIM can be tailored to the needs of the particular company and the investing public. And, most enticingly, as long as the US company is not a reporting company under the US Securities Exchange Act of 1934, listing on AIM will not subject it to SOX.
