KEY ADVANTAGES TO MOVING TO THE MAI5 Mar 2018 14:53
The main advantages to a move from AIM to the Main Market predominantly center around the company�s ability to access capital and attract investors.
Companies admitted to the Main Market are subject to increased regulation by the FSA and UK Listing Authority (UKLA) and must comply with the rules laid down by the UKLA on an ongoing basis (i.e. the Listing Rules, the Prospectus Rules, and the Disclosure Rules and Transparency Rules (DTRs). AIM companies are typically only subject to certain parts of the DTRs and only need to produce a prospectus if they are making an offer to the public.
The increased level of regulation together with the increased levels of corporate governance required by the Listing Rules means that investors, both private and institutional, tend to have more confidence in companies whose securities are admitted to the Official List of the UKLA and to trading on the Main Market. Accordingly, companies on the Main Market can often find that they have a wider pool of investors willing to invest in the company than those on AIM.
In addition, when a company would be eligible for inclusion in the FTSE 250 or FTSE 100 indices, it should also increase passive investment in the company from FTSE tracker funds which can increase liquidity.
As an AIM company increases in size, it will also find that by moving to the Main Market there will usually be an increase in its profile and the research analyst coverage of the company, both of which can help lead to a demand in the company�s securities.
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