STOCKS and shares ISAs will soon be allowed to include small firms’ equities listed on the alternative investment market (AIM) and others like it across Europe under proposals put forward in a Treasury consultation yesterday.
The move is designed to boost investment into small businesses by opening up a major source of funds that had previously been closed off to the firms.
It is part of a wider push to attract more investment into small firms, as bank lending has declined since the credit crunch leaving the businesses without the finance they need to grow.
The consultation is aimed at deciding which stock markets to include, and how to measure the impact of the change, rather than asking whether or not the change should happen.
“Investing in small and mid-size quoted companies means backing UK growth companies,” said the Quoted Companies Alliance, which has been campaigning for the stocks to become eligible for ISA investors.
“This initiative will provide fuel for the engines of growth.”
The consultation will run for two months, ending in May.