The Role of the NOMAD

In April 2017, the Alternative Investment Market (AIM) had 967 companies admitted for trading on AIM. Of these companies, 164 were international companies and the market capitalisation of these companies ranged from less than £1 million to over £4.8 billion.

AIM has become the foremost stock market for emerging, high-growth businesses. If you are committed to growth, you should seriously consider floating your company on AIM.
One of the key people involved in making a floatation a success is the Nominated Advisor.

Nominated Advisor (NOMAD)

A NOMAD is an adviser that has been approved by the London Stock Exchange. They will usually be a corporate finance firm, investment bank, accountancy firm or a broker.
The NOMAD is responsible for advising and guiding a company on the admission process, and for assessing its suitability for admission to AIM. A company wishing to float on AIM must have a NOMAD appointed at all times.

Choosing a NOMAD

A company must choose its NOMAD carefully. It should ideally be an adviser who fully understands the business of the company and has experience in the sector in which the company operates. In certain sectors, such as the mining and gas industries, NOMADs have additional responsibilities.

The relationship

A NOMAD agreement will need to be entered to document the relationship between a company and its NOMAD. This document will set out the terms of the agreement and the obligations of the company and its directors to the NOMAD, along with the duties the NOMAD owes to the company. This agreement will also confirm the NOMAD’s fees.

NOMAD obligations

A NOMAD will:

  • provide guidance throughout the floatation process;

  • work with the AIM company’s lawyers to prepare the company for being on the public market;

  • be available to advise and guide the AIM company at all times;

  • allocate at least two appropriately qualified staff to be responsible for each AIM company for which it acts, so appropriate contact is available at all times;

  • comply with the NOMAD rules and the AIM rules;

  • at all times act with due care and skill;

  • confirm the appropriateness of the company for listing to the London Stock Exchange;

  • work alongside the company’s advisers, including their lawyers, accountants and any specialists in undertaking extensive due diligence on the company; and

  • act as the primary regulator throughout a company’s time on AIM.

Summary

If you are committed to floating your company on AIM, a NOMAD will be a one of the key players in ensuring that the floatation is a success. It is vital that you chose the right adviser from the outset to ensure a smooth a process as possible. They will be heavily involved with your lawyers and accountants and all parties must be able to work together to maximise success.

December 2017
David Anderson
Corporate and Commercial Solicitor