BioWorld International Correspondent
LONDON - The London Stock Exchange is changing the listing rules for its junior market to offer fast-track admission for smaller international companies. Instead of needing to produce a prospectus, companies that already have a listing on one of nine specified overseas markets will be able to use their existing annual report and accounts as the basis for admission.
The LSE hopes the move will attract growing companies in technology and life sciences to its Alternative Investment Market (AIM). The fast-track route will not allow companies to raise money, but will enable them to access institutional investors in London, and from here, a wider European capital market.
According to the head of AIM, Simon Brickles, there are London-based investors who want to invest in smaller international companies. "If a company has already gone through a due diligence process on another market, that can now help them access London's benefits via AIM."
The fast-track route is open to companies listed on the main markets of Euronext, Deutsche Borse, Stockholmsborsen, the Swiss Stock Exchange, the Toronto Stock Exchange, JSE Securities Exchange in South Africa, the Australian Stock Exchange, the New York Stock Exchange and Nasdaq. Procedures are in place for approving other overseas exchanges in due course.
To take advantage, companies must have traded on one of the designated markets for at least 18 months. They will then need to appoint an LSE-approved nominated adviser, or nomad. Nomads stand as guarantor that the companies they sponsor are suitable for AIM and act as intermediaries in the listing process. They then have ongoing responsibility to ensure the companies they sponsor comply with the regulations of AIM.
The LSE likes to claim AIM has been the one success story amid the lackluster IPO markets of the past few years. In 2002, there were 60 IPOs on AIM, representing 46 percent of all new listings in Western Europe last year.
The exchange said the rule change also will benefit UK companies on the market, by raising AIM's profile and building further investor interest. At the end of April there were 705 companies on AIM with a total market capitalization of £10 billion (US$16 billion).