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Listing in London a Guide to Premium and Standard Listings of Equity and Flotation on AIM

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Listing in London a Guide to Premium and Standard Listings of Equity and Flotation on AIM www.pwc.com/mn/capital-markets Listing in London A guide to premium and standard listings of equity and flotation on AIM Capital Markets About this brochure This brochure summarises the different London markets, the listing standards for each market for going public in London and an overview of the wider regulatory environment. 2 Executing a successful listing - London PwC Content London – an overview 2 London Stock Exchange markets 5 Overview of key regulatory requirements 6 Corporate governance 8 Market indices 9 London – an overview... London remains one of the most influential global financial centres. It owes much of its continuing appeal to its cosmopolitan status, the liquidity of the financial markets and the regulatory, business and political framework that supports those markets. • The London Stock Exchange is one of the world's oldest exchanges and offers a wide choice of routes to market, for UK and international companies. The markets that companies can list on are shown in the table below. Which market a company should consider will depend upon different criteria including the: – stage of the company’s development; – size of the company; – complexity of the offer and securities issued; – overall strategy and objectives; and – investors who are being targeted; – eligibility. Securities admitted to official list Securities not admitted (maintained by UKLA) to official list Main Market Specialist Fund Market EU Regulated Markets Professional Alternative Investment Market (AIM) Exchange Securities Market Regulated Markets • NYSE Euronext recently opened its London platform, complementing their other European platforms in Paris, Amsterdam, Brussels. Eurotunnel SA was the first company to complete a listing on the London platform in June 2012. Companies from all over the world are listed in London Number of companies listed 1 – 20 21 – 40 41 – 60 > than 61 Source: LSE data as at 30 June 2012 2 Listing in London | PwC As of September 2012 Main Market AIM Number of listed companies 1,338 1,107 Total market capitalisation (GBP bn) 3,740 64 Number of international companies 316 213 IPO 2007 – 28 Sept 2012 average money raised (GBP mn) 513 34 Number of IPOs 2007 – 28 Sept 2012 133 338 IPOs 2007 – 28 Sept 2012 proceeds (GBP bn) 68 11 Number of further issues 2007 – 28 Sept 2012 754 2,275 Further issues 2007 – 28 Sept 2012 proceeds (GBP bn) 954 295 London offers a wide Data source: London Stock Exchange data choice of markets to companies of all sizes and origins Market capitalisation of London listed companies by industry as at 30 June 2012 3% 3% 7% 19% Financial Telecommunications 7% Oil and gas Consumer services 8% Consumer goods Healthcare 18% Industrials Technology 9% Basic materials Utilities 13% 13% Data source: London Stock Exchange data Spread of companies by market capitalisation as at September 2012 250 Main Market 232 AIM 210 196 200 188 197 147 150 141 137 130 120 123 105 97 99 102 100 84 Number of companies 50 39 34 27 8 4 2 0 0-2 2-5 5-10 10-25 25-50 50-100 100-250 250-500 500-1,000 1,000-2,000 Over 2,000 Capitalisation band (US$ millions) Data source: London Stock Exchange data, Dealogic data PwC | Listing in London 3 2 Executing a successful listing - London PwC London Stock Exchange markets Main Market Premium listing Standard listing (Shares and Depositary The Main Market is the LSE's flagship Receipts) market, regulated by the UK Listing Authority (UKLA). Only available to equity Standard listings cover issuance of shares, Global shares and closed- and Depositary Receipts (GDRs), debt and securitised A company can list on the Main Market open-ended investment derivatives that are required to comply with EU in either the Premium segment or the entities. minimum requirements. Standard segment. These are the Financial Services Authority (FSA) Issuers with a premium A standard listing allows issuers to access listing categories that have been listing are required to the Main Market by meeting EU harmonised designed to help clarify the regulatory meet the UK’s Listing Rules, standards only, rather than the additional standards that apply to a listing on the which are more onerous UK requirements. Main Market. than the EU minimum requirements. For a premium listing, the company must appoint a sponsor to provide A company with a premium declarations to the FSA as part of the listing is expected to meet IPO process. Diligence reports will also the UK’s highest standards be required from a reporting accountant. of regulation and corporate governance. • Premium listed and standard equities are traded on the LSE’s SETS trading platform. • Standard listed depositary receipts are traded on the LSE International Order Book (IOB) platform. AIM The AIM Rules for Companies set out Professional Securities AIM is the LSE’s market for smaller, the requirements and guidance for Market (PSM) growing companies. The market has companies quoted or wishing to be The PSM is a specialist exchange a simplified regulatory environment quoted on AIM. The admission regulated market designed to suit the which has been specifically designed for document requirements are based on specific needs of companies looking to the needs of small and emerging the FSA's Prospectus Rules with certain raise capital through the issue of companies. (optional) exclusions. Admission documents relating to a public offer in specialist debt securities or depositary AIM is an exchange regulated market. the UK will need to follow the FSA's receipts (DRs) to professional investors. Companies wishing to join AIM must Prospectus Rules and require the Listing on this market may avoid the comply with the Exchange’s AIM Rules. approval of the FSA. need for financial information to be converted to IFRS or an equivalent Companies applying to AIM must Certain tax incentives are available GA AP. appoint and retain a Nominated Adviser to individual and corporate investors (NOMAD) to guide them through the and enhance the attractiveness of Specialist Fund Market admission process and to advise them investing in AIM companies. subsequently as a public company. The (SFM) NOMAD must be registered with the The SFM is an EU regulated market for Exchange.(See the LSE website for a list specialist investment funds and specialist of approved NOMADS). property funds (including private equity funds, hedge funds, feeder funds (both single and multi-strategy), specialist geographical funds, funds with sophisticated structures or security types), targeting sophisticated investors. PwC | Listing in London 5 Overview of key regulatory requirements Initial listing Main Market Premium Main Market Standard AIM Equity shares Equity shares GDRs Equity shares Sponsor Required No requirements Nominated advisor (NOMAD) required at all times Admission Prospectus vetted and approved by the UKLA Not vetted by the Exchange. The FSA document will vet an AIM admission document where it is also a prospectus under the Prospectus Directive FTSE index Subject to eligibility if not a UK plc Not permitted inclusion Minimum % 25% of shares in public hands 25% of GDRs No requirements free float (not underlying shares) in public hands Minimum £700,000 No requirements market capitalisation Control of Control over the majority of assets No requirements assets for 3 year period Revenue At least 75% of the business must be No requirements track record supported by a revenue earning track record for 3 year period Some exemptions apply to mineral and scientific research based companies Financial 3 years of audited accounts with 3 years of audited accounts (or shorter period since incorporation) track record unqualified audit opinions No more than 6 months old audited No more than 9 months old audited accounts, otherwise interim financial information (which financial information (including may be unaudited) required interim information if appropriate) Accounting EU IFRS or other approved GAAPs for non-EEA issuers EU IFRS or other approved GAAPs for standards non-EEA and Channel Island issuers At a minimum, the last 2 years financial information must be restated on the basis to be or national GAAP with reconciliation applied in the issuer’s next annual accounts to one of the approved standards Other Confirmation that adequate financial No requirements Confirmation that adequate financial eligibility reporting procedures are in place reporting procedures are in place requirements Statement that the issuer has sufficient working capital for at No requirements Statement that the issuer has least the next 12 months from the date of prospectus sufficient working capital for at least the next 12 months from the date of admission Pro forma information, reported by an accountant, required if there Pro forma financial Pro forma information not required, has been a significant change information is not required, but generally presented if there has but generally is presented if been a significant change there has been a significant change. If presented voluntary, must be reported on by an accountant Financial due Normally required by the sponsor: Depends on the requirements of underwriters Normally required by the NOMAD: diligence • Long form report • Long form report work streams • Financial reporting procedures • Financial reporting procedures report report • Working capital report • Working capital report 6 Listing in London | PwC Ongoing obligations Main Market Premium Main Market Standard AIM Equity shares Equity shares GDRs Equity shares Corporate Compliance with the UK Corporate Corporate governance statement required
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