Choosing an adviser
Selecting good quality corporate advisers is one of the most important steps in the flotation process. Their specific expertise will guide you through each part of the process.
A natural starting point is to consult your existing advisers, usually accountants and solicitors. If they do not possess the experience to act for you, they could recommend appropriate advisers. Many companies hold a ‘beauty parade’ of specialists to determine who has the appropriate experience and personality. When appointing advisers you should also clarify areas of responsibility in advance and negotiate costs.
You should agree a realistic timetable with your advisers, agreeing who is responsible for each aspect of the work. Choosing quality professional advisers is one of the most important tasks for a company preparing to float.
Which advisers does a company need to appoint?
The corporate adviser
The corporate adviser will provide initial guidance on whether it is the right time to bring your company to market or if indeed your business will be suited to the public markets. Once it has been decided that you want to join the market, the adviser will undertake a range of duties to coordinate admission to market, including submitting the application to join the market on behalf of the company.
In addition, a corporate adviser will advise on issues such as board structure, method of flotation, timetable, pricing and marketing strategy. They may also help you appoint other professional advisers.
The regulatory framework of our markets may also require the company to engage an adviser.
- Main Market - Premium. A Listing Sponsor is required for admission to Premium under the UK Listing Rules. The Sponsor will lead the team of professional advisers and coordinate their roles through the listing process. The Sponsor also has a regulatory role on an ongoing basis particularly in relation to transactions a Premium listed company may undertake.
- Main Market - High Growth Segment. A Key Adviser is required for admission to the HGS and will be responsible for providing confirmation of the company's eligiblity to join the segment to London Stock Exchange. There is no obligation to retain a Key Adviser on a continuing basis, but HGS companies must obtain guidance of a Key Adviser in the case of specific transactions and corporate events.
- AIM. A nominated adviser is required at admission and throughout a company's life on AIM. The nomad assesses the company's suitability to join the market and helps coordinate the admission process. On a continuing basis, the nomad will advise and guide your company on its responsibilities under the AIM rules. Follow the link to find out more about how to become a Nomad for AIM.
The corporate broker
The corporate broker acts as the main interface with the stock market, assessing market conditions, the demand for your company’s shares and actively marketing them to potential investors. You may want to appoint a broker with experience of your industry, capable of stimulating investor interest both at flotation and in the after-market, to enhance liquidity in the shares and to maintain your company’s profile.
The reporting accountant
The role of the reporting accountant is different to that of the company’s auditors.
Their responsibility is to review the company’s financial records, which investors may use to make their investment decisions.
There are often two sets of lawyers involved in the flotation process – one to advise the company and one to advise the sponsor. Lawyers focus on verification of the prospectus and supporting documentation, and conducts due diligence in the company.
Other advisers you may consider appointing are a financial public relations firm to assist in raising the company’s profile and a registrar to manage your share register.