Raising public equity capital in the UK

This makes the process particularly efficient in bringing the right type of investor to a company looking to expand.

Companies have the choice between the London Stock Exchange (LSE) and PLUS Markets (PLUS). Issuers can also elect between having their securities listed or not listed and can decide between an EU regulated or non-EU regulated venue, which is exchange regulated.

London Stock Exchange

Founded in 1801, the LSE is one of the largest stock exchanges in the world. Global giants and small companies alike can raise the capital they need to grow. The LSE has two major equities markets, the Main Market and the Alternative Investment Market (AIM).

The Main Market is considered Europe’s most prestigious and effective listing venue for established companies, boasting some 1,800 firms with a total market capitalisation of more than £3,500 billion.

Small and fast growing companies may wish to issue securities on AIM or on the PLUS quoted market

AIM is the world’s leading small-cap growth market, with over 2,900 companies choosing to join since it launched in 1995 – raising more than £34 billion in the process. In 2007, AIM accounted for 52 per cent of all IPOs on European stock exchanges.

In 2007, money-raised by companies conducting international IPOs reconfirmed the London Stock Exchange as the world’s most international equity market. During this year London’s markets attracted 86 international IPOs by companies from 22 countries (excluding the UK).

PLUS

PLUS is a new stock exchange for London, which was recently granted Recognised Investment Exchange (RIE) status by the Financial Services Authority (FSA). It offers two markets – Plus-listed and Plus-quoted – both of which allow companies to raise capital. The FSA regulated PLUS-listed is a truly international market, open to issuers of securities around the globe, while Plus-quoted is dedicated to the needs of smaller, growing companies seeking access to equity finance.

Listing and compliance

Both the LSE through the Main Market and PLUS through the PLUS listed market offer the opportunity to issue Primary Listed securities. These are subject to the super equivalent requirements of the UK Listing Authority (part of the FSA), which are over and above those of the EU Prospectus and Transparency Directive. They include providing good earnings records, demonstrating appropriate levels of corporate governance, appointing a bank to act as a sponsor and providing sufficient disclosure on an ongoing basis. Companies that issue Primary Listed securities enjoy the prestige attached to issuing such securities.

Our AIM quotation has been an unqualified success […] increasing the company's value and lending the prestige and credibility of the London Stock Exchange to our international marketing effort

Ian Buddery

Executive Chairman

eServGlobal

Foreign issuers who do not wish to comply with the super equivalent requirements can issue Secondary Listed securities on the Main Market or on the PLUS-listed market; these are only subject to the requirements of the EU Prospectus and Transparency Directive.

Small and fast growing companies may wish to issue securities on AIM or on the PLUS quoted market; they are then subject to the rules set out by the exchanges themselves. These are more flexible and better suited to the needs of these companies.

Overseas interest

An increasing number of overseas companies are choosing to raise public equity capital in the UK and have their securities quoted and traded in London. Over 500 companies operating outside the UK are quoted on AIM ,including Australian software company eServGlobal and Israeli telecom firm Leadcom Integrated Solutions.

Both are delighted with the impact that an AIM listing has had on their fortunes.

Ian Buddery, executive chairman of eServGlobal, said: “We are an international company, operating in a specialised market sector. We looked for an equity market where investors would understand our value proposition and support our growth. Our AIM quotation has been an unqualified success, bringing major international institutions onto our share register, increasing the company's value and lending the prestige and credibility of the London Stock Exchange to our international marketing effort.”

Similarly, Leadcom CEO Arik Alcalay stated: “Leadcom chose to join AIM as we found it to be a reliable equity market, which could provide us with the most suitable environment and means to maximize our growth prospects. We have been delighted by the support we have received from our shareholders (both new and existing) since the IPO, and are honoured to have experienced such a positive response from the market.”

Similarly, foreign companies listed on PLUS-quoted include Swiss environmental technology firm CalciTech and China’s Geo Genesis Group, a private equity house, asset management and consultancy firm.

This strong global interest highlights the UK as an ideal environment for foreign investors seeking to use a public market to fund expansion and raise their profile on an international stage.