How to get an AIM quotation

The AIM Market of the London Stock Exchange (AIM) is a useful platform for smaller companies to gain access to the UK capital markets.  But what are the legal hurdles to be overcome to gain an AIM quotation?  Here is an overview.

If you have a company or business and want to see it grow, you may wish to consider floating it on AIM.

Since AIM was established in 1995 by the London Stock Exchange, new and growing companies have raised more than £42 billion, just one of the benefits of public listing.  There are currently more than 1,700 companies quoted on AIM.

A recent survey of AIM-quoted companies indicated some of the benefits as:

• raising profile in the City;
• gaining access to institutional investors;
• increasing credibility for the company; and
• facilitating long term growth.

There are no formal restrictions to being admitted to AIM except that a company should be appropriate to be admitted and its shares must be freely transferable.  The company and the directors must comply with the AIM Rules, but these are less stringent than the rules of the full market and, in particular, the disclosure requirements for a company making substantial acquisitions are more relaxed, enabling the company to grow more easily.  In addition, there is no requirement for a trading record.

Finding a NOMAD

Every company must appoint a nominated adviser (“NOMAD”).  He is both your friend and your policeman.  His powers are delegated from the London Stock Exchange and he is there to advise and guide you.  NOMADs are carefully chosen by the London Stock Exchange and at the moment there are over 70 of them – all reputable brokerage or corporate finance houses.

Every company must have a broker and so the question often raised is whether it is better to have a broking house which can act as a broker as well as a NOMAD or have two houses acting for the company as broker and NOMAD.  There are arguments both ways.  The most important thing is to find someone you relate to and who understands your business and what your company is trying to achieve.  The company must always retain a NOMAD and, if the NOMAD resigns, the company’s shares will be suspended unless a new NOMAD is appointed within a month.

The company must select its NOMAD carefully, ensuring that the NOMAD fully understands the company's business and works well with the management team.