The Aureole is a diffraction effect of light at tiny atmospheric droplets of the cloud. If all these atmospheric particles have similar sizes it results in systematic interfering rays and ring like diffraction patterns. Since the diffraction effect is a function of wavelength, the resulting minimum and maximum rings have different diameters for different colors. This gives the final effect of colorful rings.

See also:
M.G.J. Minnaert: "Light and Color in the Outdoors", Springer-Verlag
R. Greenler: "Rainbows, Halos, and Glories", Cambridge University Press