Two-thirds of institutional investors in London’s Alternative Investment Market (AIM) want it to be more tightly regulated, according to research.

Two-thirds of institutional investors in AIM want to see tighter regulation of the market, according to research from law firm Faegre & Benson and accountancy group Baker Tilly.

The survey of 150 AIM-listed companies and investors in the market finds that while 86 per cent of AIM companies consider self-regulation to be ‘very’ or ‘fairly’ effective, only 47 per cent of investors share this view.

Investors’ attitudes have hardened since last year’s survey. One in three investors feel that light regulation equates with poor performance, compared with fewer than one in ten last year.

Chilton Taylor, head of capital markets at Baker Tilly, says that while demands for increased regulation on AIM will ‘probably grow this year’, there are dangers in going to the opposite extreme.

Says Taylor, ‘Hasty moves risk being over-prescriptive and losing the light regulatory touch that has been a key element in AIM’s past success.’