Nominated Advisor Nomad

What Is a Nominated Advisor (NOMAD)?

A Nominated Advisor (NOMAD) is an LSE‑approved corporate finance firm—typically a boutique investment bank or advisory practice—that guides a company through admission to the Alternative Investment Market (AIM) of the London Stock Exchange (LSE) and then acts as its ongoing regulator and adviser while the company remains on AIM. Because AIM has lighter formal listing requirements than the main market, the NOMAD performs much of the gatekeeping, due diligence and ongoing compliance monitoring that protect the market and investors.[Investopedia; LSE]

Key takeaways

– AIM requires every applicant to appoint an LSE‑approved NOMAD to manage the admission process and to monitor compliance after listing. [LSE]
– A NOMAD performs thorough pre‑listing due diligence and advises on structure, documentation and suitability for AIM. [Investopedia]
– After admission, the NOMAD must oversee the company’s continuing compliance with AIM rules and provide ongoing corporate finance advice. [Investopedia]
– NOMADs are approved by the LSE; not every adviser can act as a NOMAD. As of May 2022 the LSE listed 27 approved NOMADs. [Investopedia; LSE]

How a NOMAD works — duties and lifecycle

1. Pre‑admission (pre‑IPO) role
– Initial assessment: the NOMAD evaluates whether the company is suitable for AIM. Key areas reviewed include the business model, financial and operating track record, the competence and integrity of management and directors, and the intended capital structure. [Investopedia]
– Due diligence: the NOMAD conducts or coordinates comprehensive legal, financial and commercial due diligence so that the market and prospective investors have clear, accurate information.
– Structuring and advice: helps design the equity/debt structure, prepares or reviews the AIM admission document (or equivalent disclosure material), and advises on corporate governance and board composition.
– Co‑ordination: works with the company’s chosen broker, accountant and legal counsel to prepare the application and disclosure materials.[LSE]

2. Admission

– The NOMAD submits the AIM application and certifies to the LSE that, to the best of its knowledge following due diligence, the company is suitable for admission.
– If the LSE accepts the NOMAD’s recommendation, the company is admitted to AIM.

3. Post‑admission (ongoing) role

– Continuous monitoring: the NOMAD must ensure the company complies with AIM rules and public disclosure obligations at all times. It acts as the primary contact between the company and the LSE on regulatory matters.[Investopedia; LSE]
– Ongoing advice: provides strategy and capital‑markets advice, assists with fundraising and transactions, and advises on reputational or governance issues.
– Exit/changes: if the relationship breaks down (e.g., NOMAD resigns or is dismissed), this must be managed promptly because a company without a NOMAD may be suspended from trading until a replacement is found.

Important: NOMAD as regulator for AIM

Because AIM deliberately has fewer prescriptive rules than the main market, the NOMAD system provides the regulatory oversight. The NOMAD’s approval by the LSE and its continuing supervision of the company are core to AIM’s investor‑protection framework.[LSE]

NOMAD qualifications (what the LSE expects)

– LSE approval: only firms approved by the LSE can act as NOMADs.
– Demonstrable corporate finance expertise: experience in listings, capital raising and public‑market work.
– Track record and resources: adequate personnel, internal controls, processes and sector familiarity to perform thorough due diligence and ongoing monitoring.
– Independence and integrity: ability to assess management competence and the accuracy of disclosure objectively.
(For details and the current list of approved firms refer to the LSE’s Nominated Adviser Directory and relevant guidance.)[LSE; Investopedia]

Other advisers you typically need

– Broker: responsible for market‑making/introducing buyers and sellers and typically works closely with the NOMAD. (LSE guidance sets out adviser roles and their interactions.)[LSE]
– Accountant (auditor/financial adviser): prepares or verifies financial statements and offers independent review of accounts and accounting policies.
– Legal adviser: drafts and reviews admission documents, verifies disclosures and advises the board on legal and regulatory obligations.[Investopedia; LSE]

Practical step‑by‑step checklist to appoint a NOMAD and list on AIM

1. Preliminary internal work (0–3 months)
– Prepare a clear business plan, financial forecasts and historic financial statements.
– Review corporate governance and board composition; identify any changes needed (e.g., independent directors).
– Assemble initial team: select candidates for NOMAD, broker, accountant and legal counsel.

2. Select and appoint a NOMAD (concurrent with 1)

– Shortlist NOMADs with relevant sector experience and a strong record of AIM admissions.
– Check LSE approval status and recent NOMAD conduct (wins/losses, client retention).
– Hold meetings to assess fit, resource commitment, fees and reporting cadence.
– Execute engagement agreement with clear scope, timing and responsibilities.

3. Due diligence and documentation (2–6 months)

– NOMAD coordinates legal, accounting and commercial due diligence.
– Prepare AIM admission document (or admission particulars) and required financial statements and disclosures.
– Address any governance, disclosure or financial deficiencies identified.

4. Application and admission (weeks)

– NOMAD lodges application with the LSE and provides the required certificate of suitability.
– On approval, the company is admitted to AIM and trading commences.

5. Post‑admission ongoing compliance (continuous)

– Maintain regular reporting and disclosure obligations.
– Keep the NOMAD informed of material developments; consult NOMAD on major transactions and fundraising.
– Annual audits and continuing market communications managed with accountant and legal advisers.

Practical tips for choosing and working with a NOMAD

– Sector expertise: choose a NOMAD familiar with your industry—better contextual due diligence and investor introductions.
– Reputation and relationships: a respected NOMAD can improve investor confidence.
– Resource commitment: confirm the firm will allocate senior staff and not delegate key tasks to inexperienced juniors.
– Fee structure: agree fees and success fees upfront; clarify costs for admission, ongoing monitoring and additional transactions.
– Compatibility: ensure the NOMAD’s working style, reporting frequency and expectations match the company’s capabilities.
– Contingency planning: agree processes for replacing the NOMAD if the relationship ends to avoid suspension risk.

Risks and consequences to understand

– Loss of NOMAD = possible trading suspension: AIM companies must have a NOMAD; losing one without a replacement can trigger suspension while a new NOMAD is found.
– Reputation and scrutiny: the NOMAD’s assessment forms a major component of market trust—weak due diligence or poor governance can harm valuation or lead to LSE action.
– Costs: NOMAD services, plus broker, legal and accounting fees, are significant and should be budgeted for.

Sample checklist for the NOMAD’s pre‑admission due diligence (high level)

– Corporate documents: constitutional documents, shareholder register, board minutes.
– Financials: audited financial statements for required periods, management accounts, budgets/forecasts.
– Commercial: contracts, customer concentration, suppliers, IP position, market analysis.
– Management: CVs, background checks, disclosure of conflicts.
– Legal/regulatory: litigation, compliance, licenses and material contracts.
– Capital structure: option schemes, warrants, convertible instruments, debt covenants.

Frequently asked questions (short)

– Must a company on AIM always have a NOMAD? Yes—AIM rules require an LSE‑approved NOMAD to be appointed for admission and to remain on AIM.[LSE]
– Can the NOMAD also act as the broker? Some firms provide both services; check LSE guidance and conflicts policy and ensure roles are clearly defined.
– How many NOMADs exist? The number changes; Investopedia cited 27 approved NOMADs as of May 2022. Always check the LSE’s current Nominated Adviser Directory for up‑to‑date information.[Investopedia; LSE]

If you want, I can:

– Draft a checklist tailored to your company (industry, size, stage).
– Prepare a set of questions to use when interviewing potential NOMADs.
– Compare a few specific NOMADs (if you provide names) using a scoring template.