For some companies, sector or geographic focus may provide a reason to choose to list on a particular exchange, although listing in the company’s “home” jurisdiction is often the most obvious choice.
Multinationals and emerging markets companies are often presented with the choice between listing on an exchange in Europe, the US or Asia. Increased regulation of US listed companies has led to a number of companies choosing to list in London rather than New York, and some companies have considered a listing in Asia (in particular, Hong Kong) as an alternative to London. With its deep pool of capital and equity assets under management, London remains an attractive option for UK companies and others from around the world.
A company listing equity shares in London principally faces a choice between:
- an ESCC listing on the Main Market, which brings the “badge of quality” that investors associate with a London Main Market IPO and with it enhanced liquidity. An ESCC listing is the norm for larger UK companies due to the demands of institutional investors and the FTSE UK index inclusion criteria. Note that an ESCC listing is only available for voting equity shares; and
- admission to trading on AIM, which is primarily designed for smaller and growing companies. The AIM Rules contain requirements similar to, but in some cases less onerous than, the UK Listing Rules. For example, the AIM rules do not have minimum market capitalisation nor any minimum free float.