The basics of listing
When a company lists on a stock exchange, it offers shares to the public in exchange for capital. This capital can fund growth, acquisitions, research, or provide liquidity for existing shareholders.
In return for access to public capital, the company agrees to a set of rules: it must publish regular financial statements, disclose material information promptly, and treat all shareholders fairly. These obligations are enforced by regulators — primarily the Financial Conduct Authority (FCA) in the UK.
The London Stock Exchange hosts around 1,660 companies[1] across its Main Market and AIM. These range from global multinationals in the FTSE 100 to early-stage growth companies raising their first public capital.
Market segments
Main Market
The primary market for established companies. Listing here requires meeting stringent requirements including a three-year trading record, minimum market capitalisation, and compliance with UK Corporate Governance Code principles.
Includes the FTSE 100, FTSE 250, and FTSE Small Cap indices.
AIM (Alternative Investment Market)
A growth market with lighter regulation, designed for smaller and earlier-stage companies. Companies must appoint a Nominated Adviser (Nomad) who acts as gatekeeper and ongoing adviser.
As of early 2025, approximately 680 companies are listed on AIM.
Investment vehicles
Beyond individual equities, UK markets include investment trusts (closed-ended funds), venture capital trusts (VCTs) offering tax incentives for investing in smaller companies, real estate investment trusts (REITs), and exchange-traded funds (ETFs).
How price discovery works
Public markets are fundamentally information-driven systems. Share prices reflect the collective assessment of all available information by all market participants.
When a company announces results, the market processes this information almost instantly. Algorithmic traders parse headlines within milliseconds. Analysts update their models. Retail investors read summaries and commentary. All of this activity feeds into the price.
The quality of this price discovery depends on the quality of information flow. When information is delayed, incomplete, or hard to access, prices become less efficient — creating opportunities for those with better access, and disadvantages for everyone else.
Who participates
Institutional investors
- Pension funds managing retirement savings
- Insurance companies investing premiums
- Hedge funds and asset managers
- Sovereign wealth funds
Retail investors
- Individual shareholders (~14 million active)[2]
- Self-directed ISA and SIPP investors
- Trading app users
- Employee shareholders
Retail investors now account for 20–35% of daily trading volume[6] in the UK — a significant increase over the past decade, driven by commission-free trading apps and broader access to market information.
Why this matters
Well-functioning public markets are essential infrastructure for a modern economy. They enable:
- Capital formation — companies can raise funds to invest and grow
- Liquidity — investors can buy and sell without long lock-ups
- Price transparency — everyone can see what assets are worth
- Democratised ownership — ordinary people can participate in economic growth
The quality of information flow underpins all of these functions. When the system works well, capital goes where it can be used most productively. When it doesn't, misallocation and inefficiency follow.