The London Stock Exchange (LSE) revealed its proposals in February for the creation of a new High Growth Segment. Effectively a hybrid between AIM and the Main Market, (which it will form part of), it is targeted at high-growth trading companies that intend to seek admission to the Official List in due course, but that are currently ineligible.
High Growth Segment securities will not be subject to the listing rules but, because they are being traded on an EU-regulated market, they will be subject to certain parts of the disclosure and transparency rules and the prospectus rules. They will need an initial prospectus approved by the Financial Conduct Authority and another when they step up to a premium or standard listing – AIM-listed companies do not have that option. Issuers must comply with the High Growth Segment Rulebook, as well as the LSE’s existing admission and disclosure standards.
The initiative seeks to address concerns about the paucity of new companies, in particular technology companies, seeking admission to listing in London. With a lower minimum free float requirement of 10%, the LSE is looking to compete with Nasdaq in the US where several European technology companies listed in recent years.
"Ensuring that the UK’s fastest growing and most dynamic companies have access to equity capital is a priority for London Stock Exchange," says Alexander Justham, CEO of LSE plc. "The High Growth Segment will provide an additional attractive choice, giving these companies a launch pad for further success."
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