There are three principal UK markets, and these are described in detail below. The most suitable market will vary dependent on the company’s circumstances, and we can assist you to select the best option. There are a number of factors that will influence your choice of market, and these are set out in more detail below.
The Official List
This is the Main Market of The UK Listing Authority and is the principal market for larger companies. Approximately 1,500 UK companies and 400 overseas companies are currently quoted.
There are various entry requirements over and above those of the other UK Markets including:
- There needs to be sufficient equity in public hands to create an orderly market which normally means at least 25%
- The floated entity must have at least a three year trading history
- Normally sponsors will only bring companies to this Market if on initial listing they have a sizeable market capitalisation, and smaller businesses are encouraged to join AIM.
The AIM Market
Launched on 19 June 1995, AIM was set up to provide growing businesses with the opportunity of raising development capital and providing a market for their shares. It is regulated, by the London Stock Exchange, separately from the Main Market and the operation of AIM has been devolved to Nominated Advisers (Nomads) who are responsible for deciding that companies are suitable for IPO and for ensuring that member companies meet their continuing obligations. Shares listed on AIM also benefit from favourable tax treatments in that for tax purposes they are regarded as unquoted. Also, qualifying companies will be able to raise equity from Venture Capital Trusts and from individuals under the Enterprise Investment Scheme (but subject to certain restrictions).
The market rules are designed to be less onerous and flexible than those of The Official List. Shareholder approval is normally required only for relatively large transactions and:
- There is no minimum requirement for shares in public hands
- No minimum trading history is required
AIM is now one of the most active and successful markets in the world for growth companies with shares in more than 1,600 companies being traded, and the current volume of shares traded on AIM exceeds that on the main market.
PLUS
Plus (formerly known as Ofex) tends to be a market for companies which are regarded as too small for AIM or who are seeking to raise only a small amount of capital. It is also suitable for companies not seeking to raise capital but who want to create a dealing facility in their shares.
It is a cost-effective market for dealing in unquoted and unlisted securities between member firms via a competing market maker system. The burden and expense of complying with the rules of the market are less than would be the case on the Main Market or AIM.