What Is a Nominated Advisor?

A nominated advisor (NOMAD) is a financial services firm that shepherds a company onto the Alternative Investment Market (AIM) of the London Stock Exchange (LSE) and regulates it afterward once it is listed on AIM. The LSE requires that a company seeking a listing on AIM have a NOMAD, which the LSE itself must approve to carry out the functions.

Understanding the Nominated Advisor Role

The Alternative Investment Market was established in 1995 by the London Stock Exchange to enable emerging growth companies to raise capital. Well over 3,500 of such companies from around the world have taken advantage of the lower listing requirements offered by this alternative exchange. However, there is a rule that a company must retain the services of a nominated advisor (NOMAD) to help guide it through the AIM listing process.

A NOMAD is a corporate finance advisor, usually a boutique investment bank, which conducts thorough due diligence for the suitability of an AIM applicant for the exchange. The NOMAD, if satisfied with the company's business model, financial and operating track record, competence of executives and directors, and intended capital structure, will assist the company in its preparation and application for admission to AIM. If the company and NOMAD are successful in their efforts, the NOMAD will continue to monitor its client—the LSE requires it. The NOMAD must act as the regulator, ensuring that the company complies with AIM rules at all times. The NOMAD also serves an ongoing role of providing advice on business operational or financial strategy.

The criteria for being a NOMAD are:

  • be a firm or company, not an individual
  • involved in corporate finance for at least two years
  • acted as a financial advisor in at least three qualified transactions in two years
  • employ at least four "qualified executives"

As of April 2019, there are 45 NOMADs approved by the LSE.