What Is a Nominated Advisor (NOMAD)?
Let me explain what a Nominated Advisor, or NOMAD, really is. It's a financial services firm that helps get a company listed on the Alternative Investment Market (AIM) of the London Stock Exchange (LSE). You see, the AIM is a part of the LSE designed for smaller, riskier companies.
The LSE mandates that any company wanting to list on AIM must have a NOMAD, and this NOMAD has to be approved by the LSE itself. Once the company is listed, the NOMAD keeps an eye on things, making sure the company sticks to the rules. In essence, NOMADs function as the regulatory backbone for the AIM, which has lighter regulations, and they advise companies before and after going public.
How a Nominated Advisor (NOMAD) Works
The AIM started in 1995 under the LSE to let emerging growth companies raise capital more easily. It's like a submarket of the LSE, and over 3,500 companies worldwide have used its lower listing requirements. But here's the key: you must hire a NOMAD to navigate the listing process.
A NOMAD is typically a corporate finance advisor from a boutique investment bank. They do in-depth due diligence to check if your company fits the AIM—looking at your business model, financial history, executive competence, and capital plans. If everything checks out, they'll help prepare and submit your application.
Once you're listed successfully, the NOMAD doesn't just walk away; the LSE requires them to keep monitoring you. They act as your regulator, ensuring you follow AIM rules, and they provide ongoing advice on operations and finances.
NOMAD Qualifications
As of May 2022, there are 27 NOMADs approved by the LSE. To qualify, an entity must be a firm or company, not an individual, and it needs at least two years in corporate finance. It also must have handled at least three qualified transactions in those two years, and employ at least four qualified executives.
Beyond the NOMAD, if you're aiming to join the AIM, you should also bring on a broker, an accountant, and a legal adviser. The broker, who must be from the same firm as the NOMAD and is an LSE member, handles matching buyers and sellers. The accountant, independent from your company, oversees financials and prepares required documents. The legal adviser verifies statements and guides your board.
