Listing – the primary and secondary market

Listing on the London Stock Exchange (LSE)

The FCA lay down the requirements to list on the LSE through a division known as the UK Listing Authority (UKLA).
Is the company sizeable and well established?
Does the company disclose sufficient information to help potential investors make investment decision?
The company must be a plc
Have been trading for at least 3-years and at least 75% of its business must be supported by a historic revenue earning record
At least 25% of the company’s shares should be in public hands or available for purchase by the public.
Sufficient working capital for the next 12 months
(excludes Co. directors and their associates, and significant shareholders who hold 5% or more of the company’s shares.
Must fulfil rules known as the continuing obligations e.g. issue half-yearly report
A full listing
(Share Price x No of shares issued)
Have an expected market capitalisation of at least £700,000

UK Alternative to listing on the LSE - AIM

Alternative Investment Market (AIM)
LSE established a ‘Junior’ market for younger, smaller companies
not eligible for a full listing.
Less restrictions than a full listing on the LSE
No trading history required. Company can be newly established
No minimum market capitalisation required
No requirement for a minimum proportion of the shares to be held by the public
To join this market, companies must go through the LSE, unlike with a full-listing where companies join via the UKLA
A company wanting to join AIM must appoint a Nominated Advisor (NOMAD) and Nominated Broker
Nominated Advisor (NOMAD)
advises the directors of the company of their responsibilities in complying with AIM rules