Primary Markets FAQs
Most recently posted FAQ’s
Do I need to undertake a fundraising when I join AIM?
No, many of the companies that join AIM do not raise funds at the same time. This reflects the fact that companies join AIM for a variety of reasons. Some join in order to get a clearer valuation for their company or to raise their profile with investors, customers, suppliers and the media. Others may already have a strong balance sheet, and want to issue securities at some future point after their admission to AIM.
Your Nomad and broker will advise you on fundraising, and on the most appropriate methods of promoting your company's shares to the investment community. They will also be able to provide assistance in pricing your shares.
The process of joining AIM
I've heard that joining a public market involves lot of paperwork. Is that true of AIM?
Once a company has been admitted to AIM, the rules do not require it to produce further documentation or to issue shareholder circulars, unless it is undertaking a reverse takeover, undertaking a fundamental disposal or cancelling from the market. This makes AIM an especially efficient market for acquisitive companies. However, you should be aware that, in certain circumstances, AIM companies may have wider legal or other regulatory obligations that involve producing documentation. While an AIM company is required to announce new developments which may affect its share price without delay, the AIM rules do not require formal quarterly reporting − though companies are free to issue quarterly reports if they wish to do so.
We like to do things our way. Will being an AIM company mean doing things differently?
Being an AIM company does not alter management's right to manage the business in the way it sees fit. However, as an AIM company you will certainly be subject to a higher degree of scrutiny by the market and the media than you were as a privately-owned company. In general, the board must be prepared to act for a public company and appropriate changes are made to ensure compliance with the AIM rules. The board should turn to the company's Nomad for guidance.
Can you recommend a Nomad or Broker?
For reasons of independence, we are unable to recommend individual Nomad / Broker firms - however, to begin your selection, you can search for Nomads and brokers who have brought companies from your sector to the market, or look for those with a local presence.
What should I ask my prospective advisers?
It is crucial that you find advisers who understand your company and with whom you can have a good working relationship. Possible questions to ask them might include:
- What recent deals have you worked on?
- What experience do you have in our sector or country?
- Which market is most appropriate for our company?
- How will you manage our working relationship with you?
- Can we speak to some of your existing clients?
- How much will it cost us to float?
- What range of valuations should we expect?
Joining AIM for international companies
We're not based in the UK. Is that a problem if we want to be on AIM?
Being based out side the United Kingdom is no problem at all. AIM presents a particularly flexible and highly accessible environment for overseas companies. You do not need to be incorporated in the UK, and you can trade your shares in any freely-available currency.
We are already traded on another major market. Do we need to produce an admission document for AIM?
Companies whose shares have already been traded on certain reputable markets around the − known as ‘AIM Designated Markets‘ − for at least 18 months, may be eligible to use a simplified admission route to join AIM. Companies taking this ‘fast track’ route do not need to produce an AIM Admission Document. However, this option will need to be discussed with the Nomad.
Can a company have its securities traded in currencies other than Sterling e.g. Euros, Dollars on AIM?
Yes, your shares can be denominated and traded on AIM in any freely-available currency you choose.
Making the most of your AIM admission
Can AIM companies use the Exchange's broadcasting facilities to communicate with their shareholders?
Yes. The Media Centre at the London Stock Exchange’s head office in the City of London offers companies the ultimate corporate event venue, complete with the latest state-of-the-art media and presentation technology. Available to hire for company results presentations and product launches, the Media Centre provides a convenient location for an AIM company’s directors to give TV and radio interviews associated with their corporate event or announcement.
Does the Exchange run any AIM courses or events?
We organise many events to help AIM companies keep up to date with best practice in the market and provide them with an opportunity to meet other company directors. The key AIM event each year is the AIM conference which is held in June. We also run regular flotation seminars for companies considering joining our markets, as well as skills focussed training courses for directors of companies already on our markets, such as IR and Corporate Governance.
What is AIM's regulatory status?
AIM is owned and operated by the London Stock Exchange in its capacity as a Recognised Investment Exchange under Part XVIII of the UK's Financial Services & Markets Act 2000 (FSMA 2000). AIM therefore falls within the definition of a Prescribed Market under FSMA 2000 and is subject to the UK market abuse regime. Under the directives that form the EU's Financial Services Action Plan, AIM is not a Regulated Market but instead falls within the classification of a Multilateral Trading Facility (MTF) as defined under the Markets in Financial Instruments Directive 2004 (MiFID).
Investing in AIM
How can I get access to price sensitive and regulatory information for AIM companies?
RNS is the company news service from the London Stock Exchange, bringing company information to the global investment community quickly, securely and cost-effectively. Click here to find out how to subscribe to RNS.
Large investors in AIM
Which funds and institutions invest in AIM shares?
All the major institutions invest in AIM securities, and there are many specialist and tracker funds that focus on AIM. In addition, retail investors play a significant role in terms of secondary market trading, which is an important driver of liquidity in individual securities traded on the market.
General questions about AIM
Can I arrange to visit the Exchange to see AIM?
Unfortunately the Exchange is no longer open to visitors. The major attraction for visitors was traditionally our trading market floor, but this was closed in 1986 when 'Big Bang' replaced open-outcry trading with a system of computers and telephones. In addition, the security aspects of operating a visitors' gallery had become too onerous.
What are the benefits of joining AIM?
AIM offers smaller growing companies from all countries and all sectors all the benefits of being traded on a world-class public market within a regulatory environment designed specifically for them. AIM is a flexible market with a simple admission process that allows more companies to experience life as a public company, and to capitalise on the resulting benefits for their businesses
What is the High Growth Segment?
The High Growth Segment (HGS) is a new segment of London Stock Exchange’s Main Market, launched in March 2013. It is a transitional segment designed to attract high growth, mid-sized UK and European companies aspiring to an Official Listing over time.
Why has London Stock Exchange introduced this new route to market?
There are a number of larger private UK (and European) businesses with ambitious growth plans that require external capital but find the barriers to accessing the IPO markets too high.
HGS has been designed to make the Main Market a more accessible and attractive source of capital for these businesses. It complements our existing offering of AIM and the Premium and Standard segments of the Main Market, providing additional choice to potential issuers.
What type of company would access the segment?
An HGS company would be larger than a typical AIM company and have aspirations to ultimately join the Premium segment of the Main Market.
It would have to meet the following eligibility criteria:
Be incorporated in the EEA
Be commercial companies, issuing equity shares only
Have a minimum free float of 10 per cent at IPO
Demonstrate historic revenue CAGR of 20 per cent over 3 years
What do I need to do in order to be admitted to HGS?
Produce an EU Prospectus, approved by UK’s Financial Conduct Authority (FCA) or other EEA competent authority
Appoint a Key Adviser, who plays a similar role to a Listing Sponsor, in relation to admission
Demonstrate eligibility for the segment, as set out under the HGS rulebook, and compliance with the London Stock Exchange’s HGS rulebook and the Admission & Disclosure Standards
Be approved for admission by London Stock Exchange’s Admissions Review Committee
What is the HGS’s regulatory status?
HGS has EU Regulated Market status and is therefore subject to EU directives as applicable to Regulated Markets (including the Prospectus Directive for admissions and Transparency Directive for continuing obligations). It is a segment of London Stock Exchange’s Main Market but does not form part of the FCA’s Official List and therefore is not subject to the UK Listing Rules.
Companies are required to comply with the London Stock Exchange’s High Growth Segment Rulebook and Admission and Disclosure Standards.
We’re not based in the UK. Is that a problem if we want to be on HGS?
HGS is designed for EEA incorporated companies which allows for a simple framework and ensures that all issuers are subject to a consistent level of financial services and corporate law as provided for in the EEA directives.
Companies with assets, operations and management outside the EEA that demonstrate the growth characteristics required to be eligible for HGS may choose to re-incorporate in an EEA jurisdiction to seek admission to the segment. In any case, these companies will continue to have access to AIM and the Premium and Standard segments of the Main Market.
How does HGS differ from AIM?
HGS is for high growth businesses seeking access to the Main Market due to their size and stage of development but that at the point of IPO are not able to meet all the requirements for being on the FCA’s Official List.
HGS has EU Regulated Market status to ensure a framework appropriate for larger companies, whereas AIM is not an EU Regulated Market, to allow for a market framework suitable for smaller companies.
How does HGS differ from techMARK?
techMARK, introduced in 1999, is a grouping of Premium Main Market companies whose business models require a particularly high level of innovation and investment into research and development programmes. techMARK is an index classification to help Premium companies gain profile with the investor community whereas the HGS is a market segment with its own regulatory status and parameters.
What type of investors will be able to invest in the HGS?
The High Growth Segment will be open to institutional and retail investors seeking growth opportunities.
Could companies be included in indices, and therefore passive funds?
No. As HGS companies will not be listed within the Premium Segment of the Main Market – a key criteria for FTSE inclusion – they will not be included in the existing FTSE indices.
What on-going requirements do companies need to comply with?
On-going requirements as set out in the HGS rulebook, including
- rules around significant transactions and website disclosure
- requirement to consult a Key Adviser to specific events such as notifiable transactions
EU FSAP directives as applicable to Regulated Markets, including the Transparency Directive
An annual statement of what corporate governance code has been adopted and to what extent
We will also retain a dialogue with issuers to understand when they meet the listing eligibility criteria to help them achieve the transition to the Official List.
Most recent questions
How are the Exchange's markets differentiated for closed-ended investment funds?
The Main Market offers funds access the widest possible investor base from institutional to general retail investors. The rules governing admission and ongoing levels of shareholder engagement and transparency reflect this in that they are super-equivalent to EU Directive standards.
The Specialist Fund Segment is a peer group market designed to appeal to alternative funds and their sophisticated investors. The rules governing corporate governance and transparency standards reflect this by replicating EU Directive minimum standards, which also qualifies the market for most investment mandates. The market is designed to accept more sophisticated fund vehicles, governance models and security types that are likely to be characteristic of the funds involved.
AIM offers a market for ‘vanilla’ funds. AIM is suitable for the more straightforward funds seeking a broad investment audience including institutional and retail investors. However, as an Exchange-regulated rather than an EU Regulated market, institutional investment exposure in the UK and Europe will be subject to thresholds within mutual fund and investor mandates.
What is the definition of 'investment entity' for the Specialist Fund Segment?
It is a requirement for admission to trading on the Specialist Fund Segment that funds are of the closed-ended type and submit an EU Prospectus Directive-compliant document that satisfies Annex XV building blocks (as specified in the EU Prospectus Regulation). The Specialist Fund Segment is designed to offer flexibility in considering structures and security types suitable for funds operating in the alternative fund management arena, and so we do not issue a more specific definition of what constitutes an ‘investment entity’ for Specialist Fund Segment purposes. However, advisers and potential issuers are encouraged to discuss particular propositions with us at an early stage to verify their suitability.
Where does my fund have to be domiciled?
UK and non-UK investment entities can seek admission to the Specialist Fund Segment. There is no restriction on domicile.
Can investment entities transfer from other Exchange markets?
Yes. Investment entities can transfer to the Specialist Fund Segment from AIM and the Main Market. Refer to the Guidance for admission to trading for more details.
Do securities have to settle in CREST?
To be admitted to trading on our SETS trading service, securities must be eligible for our Central Counterparty Service, operated through CRESTco and the London Clearing House. However, other Central Securities Depositaries can also be accommodated, including Euroclear, in which case securities will be admitted to our SETSqx trading service.
Can the Specialist Fund Segment accept Segregated Portfolio Companies/Protected Cell Companies?
Yes. The Specialist Fund Segment is designed to accept structures like this.
Can the management company behind a fund or group of funds be admitted to the Specialist Fund Segment?
No. The Specialist Fund Segment accepts only investment funds themselves, not the management company, structure or group behind those investment funds.
The joining process
What is the process for admission?
Applicants to the Specialist Fund Segment will be required to produce a prospectus approved by their relevant EEA Competent Authority. For example, in the case of applicants whose Home Member State is the UK, this will be the Financial Conduct Authority (FCA). Applicants must then seek admission of securities to the Specialist Fund Segment through the process outlined in the London Stock Exchange Admission and Disclosure Standards. Also refer to the Guidance for Admission to Trading on the Specialist Fund Segment for details.
What are the initial and annual costs of admission?
Admission and annual fees for securities admitted to the Specialist Fund Segment are calculated in accordance with the London Stock Exchange’s equity fee scale. Our fees calculator will allow you to calculate your admission and annual fees.
Can I ‘passport’ my prospectus into the UK for admission to SFS?
Yes. Refer to the Guidance for Admission to Trading on the Specialist Fund Segment for details.
What is the regulatory status of the Specialist Fund Segment?
The Specialist Fund Segment is an EU regulated market as defined in the Markets in Financial Instruments Directive (MiFID) and a structure which is compliant with the EU’s Financial Services Action Plan. The Specialist Fund Segment is a regulated market for the purposes of the UCITS Directive.
Can the Exchange refuse to admit securities to the Specialist Fund Segment?
In certain circumstances, the Exchange reserves the right to refuse to admit, suspend or cancel admission to trading on any of our markets, including the Specialist Fund Segment.
Specialist Fund Segment securities must be 'freely negotiable'. Is there a definition for this?
Refer to Article 35 of Chapter V of the Commision Regulation 1287/2006 of 10 August 2006 for further details. In summary, 'transferable securities shall be considered freely negotiable if they can be traded between the parties to a transaction, and subsequently transferred without restriction, and if all securities within the same class as the security in question are fungible'.
Are Specialist Fund Segment securities eligible for ISAs and PEPs?
No. The listing of shares on a recognised stock exchange is a requirement for ISA and PEP eligibility. Refer to the HM Revenue and Customs guidelines by clicking here.
How can I identify Specialist Fund Market securities?
A published list of securities admitted to the Specialist Fund Segment will be available on this website. Specialist Fund Segment securities will also be identifiable on our trading screens through the following segment codes: SFS1, SFS2, SFS3, and SFS4.
Are there any risks associated with investing in the Specialist Fund Segment?
Investment entities admitted to the Specialist Fund Segment will be securities that may have characteristics such as:
variable levels of secondary market liquidity
sophisticated investment propositions with concentrated risks
highly leveraged structures
sophisticated corporate structures
and are therefore intended for institutional, highly knowledgeable and professionally advised investors only.
Can I use this market for a public offer of securities to less sophisticated investors?
No. The Specialist Fund Segment is not intended as an admission route to a regulated market for investment entities that are intending to make a wider public offer of securities to less sophisticated investors. The Specialist Fund Segment is designed purely for the needs of highly specialised investment entities seeking institutional, professional and highly knowledgeable investors. A more appropriate route for a public offer would be to seek a listing on the Main Market via following Chapter 15 of the FSA Listing Rules or admission to AIM.
Will securities be included in the FTSE UK Series of indices?
No. Only investment entities that select a listing on the Main Market through complying with Chapter 15 of the FSA’s Listing Rules can potentially be included in the FTSE UK Series of indices.
Is a prospectus required for admitting securities to trading on the PSM?
Since the PSM is not a regulated market as defined by the various different directives under the European Commission’s Financial Services Action Plan, a prospectus is not required for the admission of securities to the PSM; however, as the PSM is a market for listed securities, ‘Listing Particulars’ are required.
The UK Listing Authority (UKLA) (a division of the Financial Conduct Authority) is responsible for approving the listing particulars which are submitted by the issuer. The Exchange oversees the admission to trading of securities to the PSM.
Which rules apply to PSM issuers?
Issuers with securities admitted to the PSM are required to comply with the:
Exchange’s Admission and Disclosure Standards
Relevant provisions of the Prospectus Rules (PR), the Listing Rules (LR), and the Disclosure & Transparency Rules (DTRs).
These rulebooks are not individual standalone documents and therefore must to be read together to determine their application. For instance, it might incorrectly be assumed that the DTRs do not apply as the PSM is not a regulated market as defined by European directives; however, certain DTR provisions are applied to the PSM securities via the Listing Rules – specifically LR 17 for debt securities and LR 18 for DRs.
For more information on listing process please visit the FCA's website.
How many securities are admitted to trading on the PSM?
There are a variety of debt securities and depositary receipts admitted to the PSM. Please visit our statistics section for up to date figures.
Which security types are eligible for the PSM?
Depositary receipts and debt securities including eurobonds, convertible bonds, exchangeable bonds and medium-term notes are potentially eligible for the PSM. For more details on this, please see Listing Rule 4.1.1.
What is the process for transferring securities from the Main Market to the PSM?
Issuers wishing to transfer from Main Market to PSM are required to do the following:
1) Issue an announcement via RNS (or other Regulatory Information Service) stating the company's intention to transfer to PSM at least 10 business days before the transfer is to take place. This is to inform investors and provide them with sufficient notice.
2) Send a separate letter to each of: the Exchange’s Issuer Implementation team and the UKLA’s Listing Applications team stating the following:
that a transfer from Main Market to the PSM is to take place
the date from which the transfer is to be effectiv
the details of the issuer name
the ISIN of the relevant securities
London Stock Exchange
10 Paternoster Square
UK Listing Authority
The Financial Conduct Authority
25 The North Colonnade
Issuers should note that the transfer of passported securities from the Main Market can only be made if the securities are admitted to the UKLA's Official List.
What are the relevant admission and annual fees for PSM issuers?
All fees relating to admission to trading to the PSM are detailed in our fees brochure. There is also a fees calculator designed to help you calculate the fees for depositary receipts admitted to the PSM.