AIM Listing

Alternative Investment Market

Raising capital can be daunting. Banks are not willing to lend and issuing debt can put an unwanted strain on cashflow.

Listing your company on the London Stock Exchange may be something you have never considered, however a listing on the AIM market may be easier to achieve than you think and can get you the funds you need to grow.

F9 are able to advise and guide you through the process of issuing equity on London’s famous stock market, giving you the ability to raise capital whilst maintaining overall control of your business.

We are able to provide advisory on corporate governance, accounting and LSE listing requirements, if you decide that AIM is the right route to capital we will partner you all the way through to market admission, working with your flotation strategy, roadshows, broking, syndication and pricing.

We work with experienced NOMADS and consultants from the world of Global Markets to ensure you receive the best possible advice and assistance in bringing your company to market.

The entry requirements for AIM are less onerous than those for the Main Market and AIM companies are not subject to the Listing Rules of the UK Listing Authority.

If you would like to discuss your eligibility for an AIM listing, contact us for a no obligation consultation and see how we can assist you become public.

AIM Process


There are no specific suitability criteria for companies to qualify for AIM.

Companies can be established trading businesses or at their start-up stage. However, before admission to AIM a company must comply with the following:-

  • The company must be a public company (or equivalent)
  • Shareholders must be able to transfer their shares without any restriction and the shares must be eligible for electronic settlement
  • It must appoint a Nomad Officer and broker (which are required for as long as the company is listed on AIM)
  • Published accounts must conform with IFRS International Accounting Standards

Under the AIM rules all companies must produce an admission document (or prospectus, if applicable), which contains the information necessary to enable an investor to assess the company’s prospects and the rights attaching to the shares to be admitted. The admission document includes factual information about the company and its trading history as well as details of the directors’ backgrounds, the shareholders and financial information. Any investors investing in the company at the time of the flotation will base their investment decisions on the information contained in the admission document.

An application for admission of securities to trading on AIM will usually involve an offer of securities to the public. This requires the publication of a prospectus unless one of a number of exemptions applies (such as if the issue amounts to less than 2.5 million euros (US$3.7 million) or to fewer than 100 people).

Typically, many AIM listings, even for large amounts, do not require a prospectus to be published since the listing falls within one of these exemptions. As a result, the admission document (unlike a prospectus) does not need to be pre-approved by the London Stock Exchange nor by the UK Listing Authority.

Market Requirements

To be suitable for listing, the company will need to satisfy its Nomad that it is suitable.

There is no requirement for the company to have a trading history. In some sectors such as IT and biotechnology companies come to market at the pre-profit stage to enable them to fund the necessary research and development.

However in reviewing a company’s suitability the Nomad will look at, among other things:


If the company has been trading for some time, the Nomad will look for sustainable revenues and profits. In the case of a younger company, it will focus on future revenues. The “story” is an important element of the admission document.

Management quality and continuity

The Nomad, like potential investors, will review the range, skills and experience of the company’s management. They will want to check that the board and senior management include people who have had relatively long experience – preferably several years – in the business.

The company should look to identify and plug any gaps in the full breadth of expertise needed to fulfil its business plan.

This is where non-executive directors can be very useful. Investors will also look for a management

Team which shows it is united behind the company’s plans, personally committed to its future, and fully agreed on its objectives. They will also want to ensure that suitably qualified non-executive directors are appointed.

Employee participation and incentivisation

Investors may also look for signs of long-term commitment to the business from key staff at and below board level, through contractual arrangements or share option schemes.

Share option schemes are often put in place upon a listing in order to enable employees to participate in the ownership of the company, improving the recruitment and retention of key staff.



The company must normally have published or filed audited accounts for a period ending no more than six months before the planned flotation. However, there is no requirement for a minimum trading record, as is the case for a listing on the Main Market.

Independent track record

Where the company’s main activity is a business which has not been independent and earning revenue for at least two years, it must ensure that all related parties and applicable employees as at the date of admission agree not to dispose of any interest in its securities for one year from admission.This is a minimum period and the Nomad may require a longer lock-in period.

Investing companies

If the company is an investing company, a condition of its admission is that it raises a minimum of £3 million in cash via an equity fundraising on, or immediately before, admission.

Resource companies

There are specific guidance notes relating to resource companies that are seeking to join AIM.

A report must be prepared by an industry specialist on the company’s material assets and liabilities, which is included in the admission document.

Working capital

The company must be able to show it has enough working capital for its current needs and for at least the 12 months following flotation. The company’s reporting accountants will prepare a report assessing whether this is the case.

Corporate governance

Although there is no formal corporate governance regime that AIM companies must comply with, the Quoted Companies Alliance (QCA) has published a set of voluntary corporate governance guidelines for AIM companies. The QCA is an organisation that seeks to promote the interests of smaller quoted companies.

Investors will expect certain minimum standards to be met and to see the development of appropriate corporate and management structures. These will help to reduce the company’s reliance on individuals, which gives greater security to investors.

While some changes might be inappropriate for a very small business, potentially relevant steps may include splitting the roles of chairman and chief executive, the appointment of non-executive directors to the board, and appointing a qualified finance director.

A further point to remember is that it may be worth considering going beyond the minimum requirements in areas such as accounting controls and corporate governance, and instead to aim for “best practice” as standard.

F9 Consulting can assist with the following appointments:

1) The Nomad

The role of the Nomad is essential to the listing of a company on AIM. The company must appoint a Nomad (an organisation approved by the London Stock Exchange) to guide it through the AIM application procedure and to act as Nomad at all times to advise it on the AIM rules on a continuing basis after flotation. If an AIM company ceases to have a Nomad for any reason, the London Stock Exchange will suspend trading in the company’s shares.

A Nomad is responsible for ensuring and confirming to the London Stock Exchange that an applicant to the market meets the requirements set out in the AIM rules. The Nomad will usually be responsible for maintaining the admission document (or prospectus) and will arrange for the scheduling of the date of admission of the company to the market. Nomads must comply with a specific set of rules published by the London Stock Exchange.

2) The Broker

In AIM quoted company must also retain a broker at all times. The broker acts as the company’s main interface with the market and potential investors. This may be the same firm as the Nomad and must be a member of the London Stock Exchange.

As well as advising on market conditions and the likely level of demand from investors for the company’s shares, the broker also actively markets the shares to potential investors and can advise on the best method of flotation, size of offer, timing and price. It will continue to work with the company after flotation to look to maintain liquidity and profile in the after-market.

3) The Company’s lawyers

The responsibilities of the company’s lawyers include conducting the legal due diligence process (fact gathering on the company to identify any legal issues which may need to be addressed before the flotation), advising on the legal aspects of the issue and producing the key legal documents. The company’s lawyers assist the directors in the verification exercise, which is vital to confirm the accuracy of the statements made in the admission document and to ensure that the document is not misleading to investors. The company’s lawyers also provide guidance for the directors as to the nature of their responsibilities and obligations as directors of AIM quoted companies.

4) The Nomad’s lawyers

The Nomad’s lawyers’ primary role is to advise the Nomad/broker on the admission process and any placing and to produce the placing agreement.

5) The Reporting accountant

The role of the reporting accountant in a flotation is separate from that of the company’s existing auditors but can be (and often is) fulfilled by a separate team in the same firm. The Nomad may prefer to appoint a different firm to ensure the highest possible level of detachment and independence in this key role. Essentially, the reporting accountant is responsible for reviewing the business, the company’s financial records and internal systems and will comment on the company’s working capital statements.

The reporting accountant prepares two separate reports. First, a detailed report on the financial and management history of the business, which although not published, provides the management and the Nomad with the information needed to draft the admission document. It also serves as the basis for the reporting accountants’ second and shorter report, which is published as part of the admission document itself. The reporting accountants will also prepare a report for the Nomad on the company’s projected working capital position following admission (normally for the 12 to 18 month period following flotation). They may also advise on the tax implications of the issue.

6) Other advisers

Depending on the method of flotation and the specific circumstances, a company might also decide to use a number of other advisers in particular areas. The most likely is a firm of financial PR consultants, to maximise awareness of the company and its products or services amongst the general public and the professional investment community in the run up to the flotation. Companies coming to market often underestimate the importance of public profile and press contacts. The financial PR consultants should also help ensure that any public statements and press releases are permissible under the relevant disclosure regulations. A company will also find that by helping to generate press interest and publicity, the financial PR consultants can play a key role in sustaining awareness and liquidity after the flotation. An applicant company may consider media training for those key directors who will be under the spotlight.

A natural resources company will generally require a competent persons’ report to be included in the admission document. The AIM Rules contain specific requirements in this regard.

Other advisers you may need include: registrars to manage the company’s share register; printers for accurate and speedy production of documentation; chartered surveyors/valuers to assess property values; actuaries to assess the position of company pension schemes; receiving bankers to handle share applications (only in a public offer); trademark or patent agents where a report on intellectual property is regarded as important and insurance brokers to check that all risks are adequately covered.

Beginning the valuation process

The market value of the company is clearly central to the flotation. If funds are to be raised, it will affect the proportion of the company’s capital which needs to be sold or issued. Also, the value of the business might be affected by any corporate restructuring and board appointments made in the run up to the float. The final valuation achieved on flotation will depend on market conditions at the time.

Method of flotation

Depending on the nature of the business and its capital requirements, the company may come to the market in any of the following ways:

1) Public offer

In a public offer, the broker will offer shares to private and/or institutional investors. A public offer is generally the most expensive route to the market, and is often used by larger companies. However, it may also bring in private investors who are important in increasing the liquidity of a company’s shares.

2) Placing

A placing usually involves offering the shares to a selected base of institutional investors. This allows the company to raise capital but with lower costs and greater freedom in terms of how it is done. It also potentially gives a company more discretion to choose its investors. However, the downside is that it can result in a narrower shareholder base than a public offer which can give rise to less liquidity in the shares. The shares being offered will generally be new shares although existing shareholders may be invited to sell some of their shares in the process.

3) Introduction

An introduction is where a company joins the market without raising capital and is therefore often the least expensive and most straight-forward way of joining the market. Generally, a company can use this method if there is already a fair spread of shareholders. It keeps costs to a minimum. However, the downside of an introduction is that the opportunities for boosting the company’s profile and visibility are more limited than with other methods of flotation.

4) Reverse

A reverse is where the business is acquired by a company which is already listed on AIM but the number of shares being issued by way of consideration is greater than the number already in issue so that the selling shareholders (or some of them) acquire control of the AIM quoted company. The company already on AIM might only be a “shell”, possibly with cash already in it.


Admission document

Whatever method of listing, the admission document (or prospectus, if required) will have to be prepared and is central to the flotation. The quality of the document can have a fundamental impact on the success of the flotation and the company and its advisers should pay close attention to both its style and content.

If the company is coming to market via a placing or public offer, then it may decide to issue a “pathfinder” document, which contains almost everything that a final admission document (or prospectus) would except for the issue price of the company’s securities. The pathfinder can be used to market the issue to selected potential investors, on a restricted basis. For bigger issues, a book building process may be conducted by the broker to identify potential institutional investors and the price at which they are prepared to buy the company’s securities. The full admission document (or prospectus) is then issued, complete with the price and a notice of any changes from the contents of the pathfinder document.

Placing agreement

The placing agreement sets out the mechanics under which the broker will place shares with investors to raise money for the company (and sometimes selling shareholders). Typically it includes the broker’s corporate finance fee and commission arrangements, which will be a percentage of the total money raised. The agreement also includes statements about the company and its business, which are given by the company and its directors to protect the Nomad/broker’s position.

The admission document and the placing agreement are the most important documents involved in an AIM flotation. However, the flotation process involves the production of many other documents which are set out in the “Key Documents” section of this guide


The length of time which it takes to bring the company to come to market is influenced by many variables. The size, sector and structure of the company, the method of flotation being used, the degree and complexity of due diligence which has to be conducted by professional advisers and market conditions at the relevant time, all can impact on the timetable.

The run up to the flotation is generally described in terms of a timetable counting down to admission and “impact day” (when the full admission document (or prospectus) will be issued to investors, and the flotation officially announced). The admission process is generally regarded as starting 12 weeks before admission, depending on the size, complexity and method of flotation. The period up to 24 weeks before impact day is regarded as pre float preparation, during which time the company should prepare itself for life as a public company and discuss the planned float with potential advisers.


The costs involved in a successful AIM flotation can vary significantly. Factors such as the route that is chosen (for example, an introduction as opposed to a placing), the amount of money that is raised, (commissions charged by the brokers will range from 3% to 5% of the money raised), whether any material issues arise during the due diligence process that need to be addressed and whether the publication of a prospectus is required, all affect the overall cost of the admission process.

If the flotation is successful, generally all the advisers’ fees will be paid from the funds raised. As a general rule, the total costs of coming to market as a percentage of the funds raised tend to fall as the actual size of the offer increases.


Once a company has floated on AIM, there are a number of obligations set out in the AIM Rules which the company must comply with on an on-going basis and for which the directors are ultimately responsible. For example, a company admitted to AIM must ensure that the market is properly informed of all developments, transactions, financial results and other information that could affect its financial prospects. The Nomad will continue to advise the directors on their responsibilities and obligations whilst the company’s shares are traded on AIM to ensure that the company complies with the requirements of AIM.

For more information please contact us at Canary Wharf.

Daniel RuthvenAIM Listing