Overview

NEX Exchange (link to NEX Exchange website) (formerly known as ISDX) is the ICAP Securities and Derivatives Exchange. It operates two markets:

• The NEX Exchange Main Board is an EU regulated market and only admits securities to trading that are admitted to the official list in the UK or another EEA country. In the case of the UK, this therefore means companies will comply with the Listing Rules and Disclosure and Transparency Rules as for a company admitted to the LSE’s Main Market.
• The NEX Exchange Growth Market is an equity market for small and medium-sized companies; typically its admission requirements are less stringent than those for listing or AIM.

NEX Exchange Growth Market – financial reporting requirements

The financial reporting rules for NEX Exchange Growth Market companies are set out in the NEX Exchange Growth Market - Rules for Issuers (link to NEX Exchange website). In summary:

• Annual results must be announced within five months of the year end. They must be prepared in accordance with IFRS, UK GAAP or, for a non-UK issuer, US GAAP or any other GAAP agreed with NEX Exchange.
• The annual results announcement must contain a balance sheet, profit and loss account and a statement by the board with comparatives. It must also disclose earnings per share, any decision to pay a dividend (together with a dividend timetable), details of any actual or likely qualification or modification of the audit report and a statement as to whether or not the results announcement has been agreed with the auditor.
• Interim results must be announced within three months of the period end. They need not comply with IAS 34 or any equivalent standard, but must contain a balance sheet, profit and loss account, comparatives, and a statement by the board.
• If the audit report on an issuer contains an emphasis of matter relating to going concern, a trading statement must be prepared in the intervening quarters (Q1 and Q3) within a month of the quarter end until an unmodified audit report is issued in respect of a subsequent period.

Applicability of UKLA rules to NEX Exchange Growth Market companies

NEX Exchange Growth Market companies are not listed, and are hence not subject to the Listing Rules. The are also not generally subject to the Disclosure and Transparency Rules, with the exception of DTR 5 (link to FCA handbook) (major shareholding and vote holder notifications) which applies directly to UK incorporated NEX Exchange Growth Market companies.

The UKLA Prospectus Rules (link to FCA handbook) do not apply unless a company makes a public offering of securities. This means that many NEX Exchange Growth Market companies who are first admitted to the NEX Exchange Growth Market will instead prepare an Admission Document. The NEX Exchange Growth Market Rules for Issuers reproduce some, but not all, of the requirements of the EU Prospectus Directive.