It seems the assertion that a third of companies on Aim fail has finally been put to bed. A public statement from a high up member at the US Securities and Exchange Commission (SEC) in March saying 30% of the junior market’s constituents fail has haunted Aim’s reputation. Now a research paper commissioned by the LSE puts the real failure rate at 3%.

While some put the comments of SEC commissioner Roel Campos (who has since left the SEC) down to American jealously at Aim’s growth versus Nasdaq, up until now the market’s operator the London Stock Exchange (LSE) has only been able to strenuously deny the claims. Now the LSE, which is responsible for Aim’s regulatory standards, has come up with some empirical research.

A report by academics from the London School of Economics, paid for by the LSE, says Aim failure rates over the past four years to February 2007 averaged 3%. That figure strips out the 64 cash shells de-listed in 2006, which contributed to 112 companies folding that year, or 7.4% of the average 1,517 companies quoted on Aim in 2006.

Only in 2003, when 11.2% of companies collapsed, did failures exceed 10%, leading the researchers to conclude Aim’s dud rate is ‘low’ despite the high-risk businesses it hosts.