Stock market listing is a way of raising long-term equity finance for your company by offering shares to potential public and institutional investors.
Stock market listing on a stock exchange is a complex process and is unlikely to be suitable for smaller businesses, as the process involved can be time-consuming and costly.
If you are intending to list your company on the stock, then there are several requirements that need to be met. You must have several advisers in place; each adviser plays an important part in the process:
To join the main market your business must meet the requirements set out in the London Stock Exchange's Admission and Disclosure Standards (see link below).
The length of time it will take to join the main market will depend on a number of factors, including your chosen route to market and on your company's fundraising requirements. Once you have appointed your advisers you should be able to agree a realistic timescale for joining the main market. Usually, the preparations and process for joining take between four and six months, but they can take considerably longer. Once you have appointed your advisers, you must also:
Once you have successfully completed these tasks, your company's shares will be admitted to trading on the main market, and trading can commence.
Once the company has obtained stock market listing, there are a number of regulatory requirements to be maintained (see p24 onwards of the London Stock Exchange's Admission and Disclosure Standards).
The Alternative Investment Market (AIM)
AIM is one of the equity markets of the London Stock Exchange. It is intended to help smaller, growing businesses to raise capital for growth and can help raise the profile and visibility of companies with investors, suppliers and customers.
Some businesses consider AIM as a stepping stone to a listing on the London Stock Exchange main market, which they may join as the business develops. However, you have no obligation to move from AIM to the main market, and it can remain an efficient source of investment and equity finance for your business.
Typically, the process of joining AIM can take between three and six months from the time you make an official decision to join. However, this can vary greatly depending on the complexity of your business and the level of due diligence (analysis of financial records and other vital aspects of a business, to confirm facts) that would be required to comply with the admission requirements.
There are no prescriptive eligibility criteria for joining AIM, however, a company must:
Your nominated adviser will be able to guide you through most of the admission process and will be responsible for ensuring that you comply with the specific requirements under the AIM rules.
Nominated advisers are typically corporate finance firms approved by the London Stock Exchange to act in such a capacity. You can search for a nominated adviser on the London Stock Exchange website.
In addition to the AIM rules, an applicant must comply with:
Being in the public domain will lead to closer scrutiny of your company, its performance and its directors. In addition to fulfilling the necessary documentation requirements for admission, the company must have sufficient procedures, resources and controls in place to enable it to comply with the AIM Rules. The directors of the company will also need to accept full responsibility for its compliance with the rules.
In addition to stock market listing, there are many other sources of finance to explore. From loans and commercial mortgages to cashflow finance and trade solutions, Barclays can help businesses find the right solution to support growth. Follow the link below.