HUNDREDS of American companies are hoping to join the Alternative Investment Market in London to avoid the heavier regulatory environment in New York, according to a City lawyer.

Delphine Currie, a partner at SJ Berwin, which is actively courting small, fast-growth American firms, says that her partnership has spoken to 40 or 50 companies interested in escaping Sarbanes-Oxley by coming to AIM. “If we’ve talked to 40 or 50, there are bound to be others, up to ten times as many,” she said.

Market-watchers say that a company with a turnover of only $50 million (£28 million) a year could face fees of $3 million a year to satisfy the more onerous regulatory requirements on the New York market.

Ms Currie said: “It’s OK for one of the major US companies to spend these sorts of sums on compliance. It’s crippling for a smaller company.”

There are now 29 companies quoted on AIM that are either United States-based or have a holding company domiciled in Britain but most of their operations there, according to the London Stock Exchange, which runs the less regulated market. The increasing burden of regulation in the US is one factor persuading American companies to float in London.

A London source with experience in both markets said: “An American broker recently told me: ‘You guys should erect a statue to Sarbanes-Oxley outside the London Stock Exchange — Sarbox has been the best thing since sliced bread for you.’ ”

AIM, created a decade ago, has been an undoubted success for London, attracting IPOs from all around the world. Ms Currie said that her company recently had been pitching for business in Waltham, the high-tech business cluster outside Boston, and shortly would be in Silicon Valley, California.

There is concern over the effect on AIM and the London market generally if one of the two New York exchanges mounts a successful takeover for the LSE. Nasdaq, which has had a £2.4 billion offer rejected and has approached key LSE shareholders to try to put together a deal, has insisted that the market will be able to continue as it is. The New York Stock Exchange has not commented on whether it will bid.

Regulators in London and New York have not specifically taken a view on the future of AIM. Ms Currie said: “I can’t see AIM sitting particularly well with the NYSE. But I can’t see them killing the golden goose.”

Separately, the authorities at AIM appear to be confident that they can fight off any threat to the tax breaks on offer to investors in AIM companies. There have been suggestions that the Budget on Wednesday could limit or even scrap these, because of the arrival on the market of much larger firms, such as New Star Asset Management, which floated last year.

The tax advantages are intended to encourage investment in small, high-growth businesses, not established companies such as New Star, which in the event lacks a sufficiently long trading record to go for a full listing.

It is thought that the Treasury is content to leave the LSE to find an equitable solution to the problem, for example by requiring larger companies to move on to the main list when possible, rather than imposing diktats from outside.

“We welcome the support the Treasury has given AIM in terms of the favourable financing environment and would expect that to continue,” an LSE spokesman said.

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