For companies looking to make the move, it would be common that for efficiency’s sake, a transition to the Main Market which will require a prospectus, would probably accompany either a significant transaction or fundraising. For a company’s CFO and finance team, combining the two operations will be significantly more straightforward than running them in sequence and provides a single moment of focus for investors considering the company.
Typically an AIM company won’t need to change its structure when moving to the Main Market but we would advise companies to review the UK Corporate Governance code, to make sure their own internal procedures and arrangements have developed in line with requirements. The Code (formerly the Combined Code) sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders. All companies with a Premium Listing of equity shares in the UK are required under the Listing Rules to report on how they have applied the Code in their annual report and accounts.
The Financial Reporting Council, which oversees the Code, notes that it contains both broad principles and more specific provisions: listed companies are required to report on how they have applied the main principles of the Code, and either to confirm that they have complied with the Code's provisions or - where they have not - to provide an explanation.
In the next instalment of our AIM to Main series, Marcus Stuttard, Head of UK Primary Markets at London Stock Exchange looks at corporate governance policies and procedures.