London Stock Exchange: Main Market
What is the London Stock Exchange Main Market?
The Main Market is one of the equity markets of the London Stock Exchange - and one of the largest stock markets in the world. It is usually reserved for larger, more established companies as it has exacting requirements that you must fulfil in order to join.
The Main Market is not suitable for all companies. Instead, some smaller, growing companies can choose to join AIM - another market operated by the London Stock Exchange - see London Stock Exchange: AIM.
How the Main Market operates
Joining a public market - eg the Main Market or AIM - can help you grow and enhance your business by creating more capital to expand or to develop the services or products you offer.
However, before you decide to float on the stock market, you should have your business independently valued, and decide what percentage of your business - through issuing shares equal to that value - you are willing to make available for sale on the stock market.
The London Stock Exchange Main Market works by offering a unit - or units - of your business to potential investors - usually in the form of 'securities'. There are a number of securities you can list on the Main Market, including:
- depository receipts
- debt securities
- investment entities
In order to join the Main Market, there are certain requirements you must fulfil - see how to list your business on the London Stock Exchange Main Market.
Main Market - the regulatory framework
To join the Main Market your business must meet the requirements set out in the London Stock Exchange's Admission and Disclosure Standards. These standards set out what a company must do in order to be eligible for the Main Market - London Stock exchange provides further guidance on the Main Market.
When you apply to join the Main Market, you can choose which type of listing you want to have - Premium or Standard. The Standard Listing requires compliance with European Union minimum standards, while a Premium Listing requires compliance with an additional body of rules that are 'super-equivalent', or additional to the European minimum requirements.
Companies who are not yet eligible for Premium or Standard Listing on the Main Market can now gain access to capital via the High Growth Segment (HGS) which provides companies the opportunity to fund their growth whilst preparing for an official listing in time.
The listing type you choose will also determine the eligibility criteria, prospectus contents and continuing obligations which apply to the issuer, as well as the securities it issues.
In the Financial Conduct Authority (FCA) Handbook there are three sections that outline the relevant rules for companies joining the Main Market:
- Listing Rules - include eligibility for admission and requirements which apply once on market
- Prospectus Rules - detail the occasions when a prospectus is required and the necessary contents
- Disclosure and Transparency Rules - govern the periodic and event driven disclosure of information by Main Market companies
Read the FCA Handbook.
How shares are traded on the Main Market
When a company's shares are admitted to the Main Market, they are traded on the London Stock Exchange trading platform. The trading platform is designed to maximise liquidity in the stocks traded on them, by bringing together a high number of potential investors (both buyers and sellers) with quick, efficient share transactions.
In order to attract a wide range of investors, you should be committed to, and follow, the high standards of corporate governance required of companies listed on the Main Market.