London Stock Exchange Announces New High Growth Segment

13/02/2013

  • London Stock Exchange publishes rulebook for new segment of the Main Market for high growth companies
  • Issuers required to meet free float, market value and growth conditions
  • Will act as stepping stone for companies seeking full listing

London Stock Exchange today published its draft rulebook for the High Growth Segment, the new Main Market segment for high growth companies. London Stock Exchange is seeking views from market participants prior to the launch of the segment in March.

The High Growth Segment has been designed by London Stock Exchange to meet the needs of fast-growing companies aspiring to be included in the Premium segment of the UKLA’s Official List. Market feedback from investors, sell side participants and the venture capital community confirms there are a significant number of UK and European businesses with ambitious development plans that are currently under-represented on the equity markets. This segment is part of the solution – it will provide greater choice for companies seeking capital and investors seeking growth opportunities.

Under the new rules, companies will be eligible for admission to the High Growth Segment if they meet the criteria including:

· Historic revenue CAGR of 20 per cent or more over a three year period
· An EEA incorporated, active commercial company
· A minimum free float of 10 per cent
· Publication of an approved prospectus

Alexander Justham, CEO of London Stock Exchange said:

“Ensuring that the UK’s fastest growing and most dynamic companies have access to equity capital is a priority for London Stock Exchange. The High Growth Segment will provide an additional attractive choice, giving these companies a launch pad for further success.”

Greg Clark MP, Financial Secretary to the Treasury said:

“The government is committed to making the UK the best place in the world to start and grow a business. High growth companies are a key driver of job creation, and these companies will be vital to delivering the recovery. Government has reformed EIS, SEIS and Entrepreneurs’ Relief, to sharpen the incentives to start and invest in companies with big ambitions.

“We are delighted that London Stock Exchange is taking action to ensure that London’s public markets are organised to help these companies fuel their growth. The UK has a world leading crop of high growth businesses, and the announcement of the High Growth Segment today by London Stock Exchange is an important step in creating the right environment for them to IPO in London.”

To join the High Growth Segment, companies will be required to clearly set out their intention to progress to the Official List over time as they become eligible.

The full rulebook together with details of how to submit responses is available to download from the London Stock Exchange website. Interested parties are invited to comment by close of business on 8 March 2013.