Advantages of an AiM Market Listing
1. Balanced regulation
AIM’s success is underpinned by its regulatory environment, which has been specifically designed to meet the needs of smaller and growing companies while offering appropriate investor protection.
The AiM market also benefits from being an integral part of the portfolio of markets offered by the London Stock Exchange
The entry criteria for AiM Stock Market are tailored for growing companies with no trading record required, no minimum size criteria and there is no prescribed level of shares to be in public hands. AiM’s balanced regulatory environment is specifically tailored to support the needs of smaller companies.
Once admitted to AIM, the on-going responsibilities remain straightforward and are aimed at encouraging growth. For example, there is no requirement to seek shareholder approval or prepare circulars except in circumstances where a transaction is classed as a reverse takeover or a disposal resulting in a fundamental change in business.
Integral to both the admission process and life on the AIM Market is that the company must work closely with their Nominated Adviser (‘Nomad’) to ensure that their actions are fair and reasonable for shareholders.
As the AiM Market has grown, the London Stock Exchange has ensured that the market’s regulatory framework has continued to evolve and develop to meet the changing needs of investors and companies. These changes have always balanced strong investor protection principles with the needs of smaller companies, allowing them to grow.
The AiM Listing Rules and Requirements for Companies are tailored to the needs of businesses joining AIM, and are designed to be easily understood. The development of the AIM Market listing rules has included the creation of specific guidance notes for particular sectors, such as oil & gas companies and investing companies.
2. International investor base
The AiM provides a robust and proven platform for companies seeking to raise growth capital, both through an IPO at the time of admission, and through subsequent capital raises. The total of £70 billion or so raised by AIM companies since the market’s launch is evenly split between new capital raised by companies joining the market, and further capital-raisings by existing AiM Market companies.
This track record reflects the AIM Market’s listed companies’ ability to access the London Stock Exchange’s large and highly receptive investor base. As a result, the AIM Market, along with private equity, has come to represent a vital link in the global risk capital ‘funding ladder’, supporting innovation, enterprise and job creation.
Institutional and retail investors invest in AiM listed companies. Given the variance of market capitalisations on AiM the market appeals to a wide range of investors. For example, larger international investment firms can be found on the shareholder registers of the larger AIM listed companies and specialist investors, such as Venture Capital Trusts, invest in many of the smaller companies.
3. Geographical reach and wide sector coverage
In terms of industries, the 40 sectors represented on AiM reflect the full spectrum of business activity across the world.
A feature of the AiM Market that is increasingly evident is the growing diversity of companies ranging from software to mining and computer services to real estate and support services.
The AiM also provides an opportunity for an increasingly important global theme, renewable energy, and is ideally positioned to support the financing of exciting growth stories within the cleantech sector. This diversity underlines the AiM’s continuing appeal to growing companies in all industries.
The increasing scope, profile, size and maturity of the AiM Market have confirmed the validity of the underlying premise upon which AIM is built – that ambitious smaller and growing companies require markets that are specifically designed for their needs. While the the AiM Market was initially launched to meet these needs among UK businesses, the market has become increasingly international, underlining the similarities between growing companies all over the world.
As a result, more than 500 international companies incorporated outside the UK have joined the AiM since it was founded.
In recent years, the AiM’s international momentum has been maintained by strong interest from companies in emerging markets in Asia Pacific, India and Central/Eastern Europe, alongside the market’s longstanding and continuing success among companies in territories such as Australia and Canada.
4. Expert adviser network
The AiM is supported by a large and highly experienced community of expert advisers, ranging from Nomads and brokers to accountants, lawyers and public relations and investor relations firms. The outstanding success of the AiM Market is largely due to the dedication and professionalism of these advisers.
Each company applying to the AiM must appoint and retain a Nomad to guide it through the admission process and to advise it during its time as a public company. The Exchange sets strict criteria for becoming an approved Nomad, in order to safeguard the integrity of the market, and to ensure that existing and prospective AiM companies have access to the high-quality advice they deserve.
5. Visibility and profile
Admission to the AiM provides international visibility and credibility for companies not only with their customers and suppliers but with a wider set of stakeholders including investors, advisers and analysts. Proactive communication with investors and focused investor relations activities can have a positive impact on the visibility and liquidity of a company’s stock.