London Stock Exchange listing requirements 

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Highlights (As of Nov 2009)
  
Main market

Key eligibility requirements

  • Appointment of a sponsor
  • Production of a prospectus
  • A financial track record covering three years with unqualified audit opinions
  • At least 75% of the entity's business must be supported by a revenue earning track record for the three year period
  • Control over the majority of the entity's assets for the three year period
  • Sufficient working capital for at least 12 months from the date of the prospectus
  • Compliance with the Listing Principles, and in particular, the establishment and maintenance of adequate financial reporting procedures
  • At least 25% of the shares must be in public hands

Financial information disclosure

Historical financial information - Three years of unqualified audited accounts presented in accordance with IFRS as adopted by the European Union or equivalent standards for non-UK issuers (see below).  The latest audited accounts must not be more than 6 months old.  At a minimum, the last two years must be restated to the basis to be applied in the issuer's next annual accounts

Operating and Financial Review - Covering the financial condition and operating results of the issuer

Profit forecast information - Must be reported on by an accountant if included in the prospectus

Pro forma financial information - Required where there has been a significant change in the issuer's business prior to listing. Must be reported on by an accountant

Capitalisation and indebtedness - A statement is required dated within 90 days prior to the date of the prospectus

Corporate governance

UK listed companies are required to include a statement in their annual reports detailing how they apply the principles, and comply with the provisions of the Combined Code.  Some of the main provisions are as follows:

  • Every company should be headed by an effective board
  • The board should have a balance of executive and independent nonexecutive directors
  • The board should maintain a sound system of internal control to safeguard shareholders' investments and the company's assets

For non-UK companies, financial information may be presented in accordance with IFRS as adopted by the EU or equivalent standards (currently US GAAP and Japanese GAAP).  There are also modified corporate governance requirements for non-UK companies with a primary listing, such as disclosure of:

  • whether or not the company complies with the corporate governance regime of its country of incorporation
  • The significant ways in which its corporate governance practices differ from those set out in the Combined Code.

AIM

AIM is an exchange-regulated by the London Stock Exchange.  The market is built on simplified regulatory environment which has been specifically designed for the needs for small and emerging companies.

Key differences between AIM and the Main market

AIM Main market
No minimum number of shares in public hands Minimum 25% shares in public hands
No trading record requirement Normally three year trading record required
Prior shareholder approval required only for reverse takeovers and fundamental disposals Prior shareholder approval required for significant transactions, including significant acquisitions, disposals and related party transactions
Admission documents not pre-vetted by the London Stock Exchange Pre-vetting of admission documents by the FSA
Nominated adviser and broker required at all times Sponsors needed for new applicants and significant transactions
No minimum market capitalisation Minimum market capitalisation of £700,000
Appropriate corporate governance measures, as agreed with the nominated adviser Comply with the Combined Code or explain why not


Key eligibility requirements

  • Appointment and retention of a nominated adviser and broker, who must be registered with the London Stock Exchange
  • Preparation of an admission document
  • Financial information: three years of audited financial information (if available); if the financial information is more than 9 months old, unaudited interim financial information with comparatives is required; and at a minimum the last 2 years of the financial information must be restated onto the basis to applied in the issuer's next annual accounts, being IFRS
  • Sufficient working capital for at lease 12 months from the date of admission
  • Adequate financial reporting procedures

For non-EEA issuers financial information may be presented in accordance with IFRS, US GAAP, Australian IFRS, Japanese GAAP, Canadian GAAP, or national GAAP with reconciliation to one of the above.

Secondary listings and depositary receipts

Eligibility for listing

Sponsor Not required
Registration document A prospectus for the Main Market
Financial information** Latest three years of audited accounts (or shorter period since incorporation).
Age of latest accounts 18 months if document includes audited interim statements

15 months if document includes unaudited interim statements
Interim financial information Required when the document is dated more than nine months after the end of the latest audited financial year; may be unaudited
Public flotation At least 25% of the securities must be in public hands

** Main market - IFRS or equivalent (currently US GAAP and Japanese GAAP).

There are other financial information disclosures requirements for a secondary listing on the main market.

Contacts
Kennedy Liu
Partner
Hong Kong
Tel: +[852] 2289 1881 Email
Pauline Leung
Partner
Hong Kong
Tel: +[852] 2289 1809 Email
Edmond Chan
Partner
Hong Kong
Tel: +[852] 2289 1128 Email
Tom Troubridge
Partner
United Kingdom
Tel: +[44] (20) 7804 4723 Email
Richard Weaver
Partner
United Kingdom
Tel: +[44] (20) 7804 3791 Email