Delegated Gatekeeping: A Study of the Alternative Investment Market (“AIM”)

This article develops the concept of delegated gatekeeping to explain regulatory systems where a primary gatekeeper (the “principal”) delegates revocable roles of support withholder or provider to other gatekeepers (“agents”). Delegation requires that agents assume non-traditional gatekeeping roles such as reputational stewardship (safeguarding the principal’s reputational capital). To illustrate delegated gatekeeping concretely, this article conducts a detailed case study of the London Stock Exchange’s Alternative Investment Market (“AIM”). It argues that reputational incentives can partially alleviate agent gatekeepers’ conflicts of interest, and that these incentives have strengthened on AIM relative to historic levels.