04: Choosing a stock market

Choosing the right stock market is crucial, and you will need professional advice to help you to identify the most suitable option and to provide guidance through the process of listing. Most companies enlist the services of a corporate adviser to help them prepare.

London Stock Exchange is only suitable for large companies that have been trading for at least three years. A minimum of 25% of the company’s equity must be floated. While this option provides access to the broadest potential investor audience, costs and fees are much higher than for listings on AIM and PLUS.

AIM is for smaller companies, who are not required to have any prior trading record. It is higher profile than PLUS and therefore tends to attract more interest from investors. No minimum percentage of shares needs to be made available. If your company has been trading for less than two years before flotation, its existing shareholders cannot sell their shares until at least one year after flotation.

PLUS is aimed at smaller companies wanting to raise up to £10m. It is regulated, but has less onerous regulatory requirements than AIM and the London Stock Exchange. Flotation and other costs are also lower than they are for the other two markets.