Frequently Asked Questions

Liquidity on London's AIM

1. Is there a relationship between liquidity on London's AIM and the free float (free market capital) of a London AIM-listed company’s shares?

No.  There is no statistically provable connection between liquidity on London’s AIM and the free float for London’s AIM as a whole or for the 47 U.S. companies listed on London’s AIM.

2. What drives liquidity on London's AIM?

The largest determinant of liquidity on London’s AIM is good old fashioned news flow.  The extent of equity research coverage provided by the Nominated Broker and Independent Equity Research firm and the robustness of a company’s financial PR/IR activities are also important, however, there are a number of other company specific determinants.

3. Is there a difference in liquidity on London’s AIM between the 12 U.S. companies that are listed directly on London’s AIM and the 35 U.S. companies that are listed on London’s AIM via a non-U.S. holding company?

Yes.  Liquidity for the U.S. companies listed directly on London’s AIM is only 1% per month whereas liquidity for the U.S. companies listed on London’s AIM via a non-U.S. holding company is 4% per month.

4. Why does this liquidity difference on London's AIM exist?

There are three main reasons:

  1. Shares can trade directly within CREST; no Depository or Depository Interests required
  2. Articles of incorporation fully conform to U.K. law, providing comfort to U.K investors
  3. Institutional investors only allocate a portion of their investments to non-U.K. companies