The London Stock Exchange has published AIM Notice 42 consulting on various changes to rules on investing companies and cash shells. There are two key issues here:
(1) AIM is proposing to increase the amount that a new fund must raise at IPO from £3m to £6m; and
(2) AIM appears to be trying to rid the market of small cash shells created when companies dispose of their assets by limiting the time period in which they must acquire a new business to 6 months. If such a company wants to survive longer term it will need to seek re-admission as an investing company, provided it can meet the £6m cash threshold.
The combination of these new rules is likely to significantly reduce the number of small cash shells and listed investment funds over time.