Investment entities listing on the Main Market face different requirements from trading companies. As investment entities are often start-ups, the requirement for a three year track record may be waived. This concession is balanced by the fact that an investment entity must demonstrate it is well diversified and that the people managing its investments have adequate experience and where appropriate, are independent of the board.
Issuers are also required to explain how they meet this requirement both on joining and on an ongoing basis in their annual report and accounts. They must also disclose changes to their risk profile.
Recent changes to the Listing Rules have seen a reduction in the amount of restrictions placed on investment entities joining the Main Market. As a result, they now have greater flexibility over their choice of investment strategy and how they gain exposure to underlying assets. Many more exotic funds are now able to consider listing in London, where previously they may have been deterred by prescriptive requirements.
The new rules also reflect the recent legislative changes enabling UK REITs to list on the Main Market.