The Dynamics of Rule Evolution and Stock Exchange Self-Regulation Presented by: Mr. Chan Date: 10 June 2020 Framing The Inquiry - Background - Motivating inquiry: How do rules evolve over time in self- regulatory environments? - Research question: How do the AIM Rules evolve, and why? - Why is this important? Takeaways - Answer: The AIM Rules evolve episodically rather than at consistent time intervals, with sporadic peaks of rule revisions followed by long periods of stasis. I propose that rule revisions are triggered by reputational threats to the stock exchange. - Contribution: • 1) Furthers understanding of AIM: nearly ½ of rule revisions occur in first half of AIM's history. • 2) Tests a theory of why rules evolve. Theory can be tested with other data sets. • 3) Adapts Lexi metric methodology to account for revisions over time instead of indices Data And Methods - Objective: Create a dataset containing every material revision to the AIM Rules from inception in 1995 to 2019 - Steps: 1. Acquire archival copies of the AIM Rules 2. Read the AIM Rules to observe themes 3. Develop coding criteria 4. Re-read AIM Rules, coding material revisions to create a dataset of observations about how rules evolve - This is not: An index measuring a higher-level concept (e.g., 'quality of regulation') at consistent time intervals Rule revisions on AIM: 1995-2019 Major revisions on AIM: 1995-2019 Formal Enforcement Actions What Types Of Rules Change? Do Rules Become More Enabling Over Time?