Key Takeaways
- Pre-approved advisor for AIM listings.
- Ensures company compliance with AIM rules.
- Monitors post-listing financial and governance standards.
What is Nominated Advisor (NOMAD)?
A Nominated Advisor (NOMAD) is a specialized financial services firm authorized by the London Stock Exchange to guide companies through listing on the Alternative Investment Market (AIM) and ensure ongoing compliance with AIM regulations. NOMADs act as both advisors and regulators, playing a critical role in maintaining market integrity.
Any company seeking admission to AIM must appoint a NOMAD to manage regulatory obligations and liaise with the exchange throughout its public life.
Key Characteristics
NOMADs possess distinct features that make them essential to AIM listings:
- Regulatory Approval: Only firms approved by the London Stock Exchange can serve as NOMADs, ensuring expertise in AIM rules and procedures.
- Dual Role: They advise companies on compliance while also acting as gatekeepers to uphold market standards.
- Continuous Oversight: NOMADs monitor listed companies’ adherence to disclosure, corporate governance, and financial reporting requirements.
- Experienced Advisors: Typically, NOMADs are investment banking firms with proven capability in taking companies public.
- Mandatory Appointment: AIM-listed companies must retain a NOMAD at all times, highlighting their vital role.
How It Works
NOMADs assist companies from pre-listing through post-listing phases. Before admission, they conduct thorough due diligence and prepare the required admission documents that detail the company’s business and financials. They submit the listing application to the London Stock Exchange and advise on compliance with the 45 AIM rules.
After listing, a NOMAD continuously monitors the company’s performance, compliance with disclosure obligations, and corporate governance. They act as the primary liaison between the company and the exchange, addressing any regulatory issues and advising on financial matters, including earnings reports and market disclosures.
Examples and Use Cases
NOMADs serve a wide range of companies seeking access to public capital via AIM, including:
- Airlines: Companies such as Delta rely on expert financial advisory services to navigate public market complexities.
- Technology Firms: AIM often hosts emerging tech companies that benefit from a NOMAD’s guidance through growth phases.
- Small and Mid-Cap Companies: NOMADs support firms in these segments in meeting regulatory demands and enhancing investor confidence.
Important Considerations
When engaging a NOMAD, consider their experience with companies similar to yours and their ability to provide tailored advice within the AIM framework. Conflicts of interest can arise if a NOMAD offers additional services, so transparency and professional ethics are paramount.
Understanding macroeconomic factors through resources like macroeconomics can also help you and your NOMAD anticipate market impacts on compliance and performance.
Final Words
A Nominated Advisor (NOMAD) is essential for any company aiming to list on the AIM, managing both the admission process and ongoing compliance. To move forward, evaluate potential NOMADs based on their experience and track record to ensure they align with your company’s needs.
Frequently Asked Questions
A Nominated Advisor (NOMAD) is a financial services firm approved by the London Stock Exchange to guide companies through listing on the AIM and ensure they comply with AIM regulations at all times.
Any company seeking to list on the AIM must appoint a qualified NOMAD to help with the admission process and maintain ongoing regulatory compliance as required by AIM rules.
To become a NOMAD, a firm must meet specific criteria set by the London Stock Exchange, typically being an investment banking firm experienced in bringing companies to market and capable of assessing suitability for AIM listing.
Before listing, NOMADs perform due diligence, prepare admission documents, submit listing applications, and advise companies on the 45 AIM rules they must comply with.
Post-listing, NOMADs monitor compliance with AIM rules, oversee financial performance, provide ongoing regulatory advice, assist with corporate governance, and act as the company’s primary liaison with the London Stock Exchange.
NOMADs face challenges such as managing potential conflicts of interest when offering additional services, maintaining high professional ethics, and navigating market fluctuations and economic uncertainties.
The NOMAD role is essential for the integrity and proper functioning of the AIM market, which has over 3,865 companies listed worldwide, as NOMADs ensure companies meet listing requirements and ongoing compliance.
