ISDX launches new admissions criteria for ISDX Growth Market companies

08 July 2013

London, 8 July 2013 – The ICAP Securities & Derivatives Exchange (ISDX), has today announced the launch of its new admissions criteria for companies wanting to apply for admission to the ISDX Growth Market. The ISDX Growth Market is a venue for small and medium sized companies seeking to raise growth capital, achieve an independent market valuation and enhance their corporate profile.

The move is the result of a thorough review of the business following the exchange’s acquisition by ICAP in June 2012 and a public consultation process on the proposed amendments which began in April 2013.

Under the new rules, entrepreneurial companies typically seeking access to equity capital of between £150,000 and £5 million will be able to apply for admission to the ISDX Growth Market if they can meet clearly defined suitability criteria. Companies already admitted to trading will be given 18 months to demonstrate that they comply with the new rules.

This is the first move in a long-term strategy by ISDX to encourage investment back into small and mid-cap UK companies and help close the equity gap – the difficulty faced by many SMEs in raising growth capital during a key funding stage in their development.

The new criteria make enhanced regulatory provision so companies seeking admission to the ISDX Growth Market can demonstrate greater suitability for being traded on a public market and are ready for investment. By implementing these clear standards, ISDX seeks to generate investor confidence in a company’s ability to deliver shareholder returns and encourage liquidity.

The criteria for entry are prescriptive and clear and include reference to a company’s trading history, revenues, profitability and balance sheet assets. To support liquidity, the number of shares available to new investors (free float) will also be used as a measure of suitability for admission.

Companies seeking admission to the ISDX Growth Market will be required to attain a minimum score when assessed against the suitability criteria. The criteria are sufficiently flexible to attract a broad spectrum of companies with different attributes.

Alongside this, ISDX has introduced new requirements around investment vehicles, corporate governance and disclosure, and a new framework for the role of an authorised ISDX Corporate Adviser. The Adviser is responsible for providing guidance to companies traded on the ISDX Growth Market, ensuring that high standards are maintained on the market.

Seth Johnson, CEO of the ICAP Securities & Derivatives Exchange said: “Our goal at ISDX is to deliver a market with high standards, where early stage companies from a broad spectrum of sectors can demonstrate that they are ‘investment ready’ and can access the capital they need to grow. The launch of the new rules and the framework for advisers is a practical, constructive development, which will provide a clear set of ground rules for participants. We are committed to supporting and expanding ISDX to allow companies wider access to capital to finance their businesses and their growth ambitions.”

Contacts:

Serra Balls Head of Public Relations +44 (0)20 7050 7124
Alex Dee Head of Investor Relations +44 (0)20 7050 7123
Rebecca Mitchell Maitland +44 (0)20 7379 5151

Note to Editors
Summary of admissions criteria

Trading companies applying for admission to the ISDX Growth Market will be required to achieve 20 points using the suitability matrix below (each section is capped at 10 points):

  • Size of free float: 1 point for every 10% of free float *
  • Revenue: 1 point for every £100,000
  • EBITDA: 1 point for every £30,000
  • Trading history: 1 year = 1 point; 2 years = 5 points; 3 years = 10 points
  • Gross assets: 1 point for every £1,000,000

* One point as a minimum is required for size of free float. Otherwise, a company will be required to raise a minimum of £250,000 of new money (free float).

Free float excludes shares held by related parties (including directors, shadow directors, family, and connected persons), relevant employees, locked-in persons and persons or persons acting in concert holding 5% or more of the share capital in issue (strategic long term investors).

Financials will be based on the most recent published or filed audited information. Trading history is demonstrated by historical financial information.

About ISDX
ICAP Securities & Derivatives Exchange (“ISDX”) is a London-based market providing UK and international companies with access to capital through its fully listed and growth markets. The ISDX Growth Market is its platform for small and medium sized companies.

ISDX is a Recognised Investment Exchange (RIE) under the Financial Services & Markets Act 2000, a Recognised Stock Exchange under the Income Tax Act 2007 and a member of the ICAP Group.

For more information, go to www.isdx.com

About ICAP
ICAP is a leading markets operator and provider of post trade risk mitigation and information services. The Group matches buyers and sellers in the wholesale markets in interest rates, credit, commodities, FX, emerging markets and equity derivatives through voice and electronic networks. Through its post trade risk mitigation and information services ICAP helps customers manage and mitigate risks in their portfolios. For more information, go to www.icap.com

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