City of London scare stories are starting again. According to a rash of recent reports, London's Alternative Investment Market (AIM) is threatened by EU legislation. This follows hard on a claim that the EU pensions directive had sounded the death knell for the payment of tax-free lump sums, and by assertions that the UK's ability to insist on higher disclosure and corporate governance requirements would be abolished. All are nonsense, and tell us more about the City than Brussels.

The AIM is an EU-regulated market and will have to comply with the prospectus directive that is likely this summer. In the near-final version agreed by the finance ministers, all prospectuses have to be vetted by a competent authority such as the UK Listing Authority, now in the Financial Services Authority (FSA). AIM's less formal system of nominated advisers, or Nomads, who scrutinise each prospectus, would have to go after a five-year transition. Some lurid stories have suggested that AIM may now either have to opt for unregulated status – like Ofex – or its differentiation from the main market will vanish.