Nominated Advisor (NOMAD)

What Is a Nominated Advisor (NOMAD)?

A nominated advisor (NOMAD) is a financial services firm that helps with listing a company on the Alternative Investment Market (AIM) of the London Stock Exchange (LSE). The Alternative Investment Market is a particular unit of the LSE taking special care of more modest, more unsafe companies.

The LSE expects that a company seeking a listing on AIM have a NOMAD, which the LSE itself must endorse to carry out the capabilities. When listed on the AIM, the NOMAD directs the company and guarantees it follows regulations. NOMADs are in this way seen as the regulatory system for the less-severe AIM market and are entrusted with prompting companies both pre-IPO and in the wake of listing.

How a Nominated Advisor (NOMAD) Works

The Alternative Investment Market (AIM) was laid out in 1995 by the London Stock Exchange to empower emerging growth companies to raise capital. The AIM is viewed as a submarket of the LSE. Well more than 3,500 such companies from around the world enjoy taken benefit of the lower listing requirements offered by this alternative exchange. In any case, there is a rule that a company must hold the services of a NOMAD to assist with directing it through the AIM listing process.

A NOMAD is a corporate finance advisor, normally a boutique investment bank, which conducts exhaustive due diligence for the suitability of an AIM candidate for the exchange. Whenever happy with the company's business model, financial and operating history, the capability of executives and directors, and expected capital structure, the NOMAD will help the company in its preparation and application for admission to the AIM.

In the event that the company and NOMAD are effective in their efforts, the NOMAD will keep on monitoring its client — this is a requirement of the LSE. The NOMAD must act as the regulator, guaranteeing that the company follows AIM rules consistently. The NOMAD additionally serves a continuous job of giving guidance on business operational or financial strategy.

Companies must hold NOMAD services to assist with directing them through the AIM listing process.

NOMAD Qualifications

As of May 2022, there are 27 NOMADs approved by the LSE. Coming up next are noted criteria for an entity to be viewed as a NOMAD:

It must be a firm or company, not an individual.
The company must be engaged with corporate finance for no less than two years.
It must have acted as a financial advisor in something like three qualified transactions in two years.
The firm must utilize somewhere around four qualified executives.

Alongside a NOMAD, companies that need to join the AIM ought to consider holding a broker, an accountant, and a legal adviser. Brokers are likewise individuals from the LSE and are required to be from a similar firm as the NOMAD. Brokers are responsible to unite purchasers and venders. Accountants are independent of the company and monitor the company's financials. The accountant additionally assists the company with preparing all financial reports required of it. At long last, the legal adviser deals with any confirmations of statements as well as gives guidance and exhortation to the company's board members.

Features

NOMADs must meet certain criteria to qualify.
Companies that need to list on the AIM must hold NOMADs according to LSE requirements.
The NOMAD keeps on monitoring its client even after effectively listing on the AIM.
NOMADs are corporate finance advisors, who are normally boutique investment banks.
A nominated advisor is a financial services firm that shepherds a company onto the LSE's Alternative Investment Market (AIM).