10 January 2013 | General News

How to join ISDX

ISDX – The new UK stock market for small growing companies

In October 2012 the former PLUS-quoted stock market operated by PLUS Markets Group was taken over by ICAP the world’s leading interdealer broker and provider of post trade information services. ICAP are already active in broad range of areas including, commodities, FX, emerging markets, equities and equity derivatives.

Many business commentators have in recent years argued the case for an effective and well run smaller company stock market which is accessible to SME’s. ISDX promises to provide a new alternative to banks and other lenders for growing companies to raise investment capital and benefit from the enhanced profile and valuation that a public market brings.

There are already around 140 companies listed on the ISDX Growth Stock Market, making it the third largest stock market in the UK by number of companies, behind The London Stock Exchanges Main Market and AIM

The ISDX Growth Market is specifically designed for earlier stage, entrepreneurial companies. To join the ISDX Growth Market, companies should:

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  • Commission an initial feasibility exercise to ascertain if the company may be suitable to join the market and assess the likely valuation and fundraising capacity of the company.

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 Once this is assessed then;

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  • Consider strengthening the existing board to meet appropriate levels of corporate governance. This may include having at least one independent non-executive director (if not already in place).
  • Have published audited financial reports prepared. These need to be no more than nine months prior to the date of admission to trading.
  • Ensure that the company can demonstrate that it has sufficient working capital for at least the next 12 months.

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As part of the admission process, companies looking to join ISDX must publish an ISDX Growth Market Admission Document. This will be prepared along with the company’s advisors and will contain key information about the company, its trading and future prospects.

Both the admission process and on-going regulation for the market are designed to meet the needs of smaller companies, allowing those who run companies to focus more on running their business rather than being distracted by red tape. The rules governing companies on The ISDX Growth Market are in many ways similar to those of AIM but with a little more flexibility.

For smaller companies with more modest funding requirements of £2m and under, joining the ISDX Growth Market may provide a less expensive and more appropriate flotation destination than joining AIM.

 

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