From Mrs Clara Furse.

Sir, Neal L. Wolkoff, chairman and chief executive of the American Stock Exchange, makes a number of commendable points about the role of an exchange in providing risk capital (Letters, March 16).

In particular, I agree wholeheartedly when he says: "An exchange's role is not to eliminate risk, nor to guarantee the success of a company; an exchange exists to provide transparency and liquidity to investors and enable companies with promising business plans to raise needed capital."

Nevertheless, Mr Wolkoff overstates the role of US regulation in the success of Aim. With so many US companies choosing Aim over a listing on one of their national markets, it may be tempting for Americans to identify with an endogenous cause (such as the burden of US regulation) rather than an exogenous challenge (such as the prodigious growth of Aim). But Aim is attracting companies from Australia, Canada, China, Germany, Israel, Ireland, Italy, and Sweden among many others. And the last time we checked, none of these countries was subject to the oversight of US regulation!

In fact, for a number of companies, the regulatory standards associated with a listing on Aim are much higher than those on their local growth market. These companies know that quality regulation and transparency inspire investor confidence. And investors are something that Aim has in abundance.

By constantly monitoring and enhancing Aim's regulation over the past 12 years, the exchange has been able to ensure a balance of regulation that has enabled so many smaller companies from so far afield to raise growth capital. If the balance wasn't right there would soon be a dearth of either investors or companies, or both.

For the US capital markets to come to terms with the success of Aim, they need to accept, as Mr Wolkoff suggests, that capitalism depends on entrepreneurial risk.

But rather than navel-gazing based on the dubious premise that the US is "the home of capitalism", they might be better served by accepting that the flow of capital is global and will seek out the most efficient and effective marketplaces.

Clara Furse,

Chief Executive,

London Stock Exchange