Formal admission

Formal admission is the moment a company’s shares are admitted to trading on a stock exchange. It’s graduation day for an IPO. The paperwork is signed off, the shares are on the market, and everyone can join in.

In the UK, admission is usually announced first thing in the morning, often at 8am, on the day the shares start trading unconditionally. The prospectus will normally give the expected date well in advance.

What changes at admission

• Conditional trades become final. Any trades made during conditional dealing are confirmed and settle as normal
• Unconditional dealing begins. The shares trade on the exchange like any other listed stock
• Wider access. This is typically when investing platforms and brokers can offer the shares to everyday investors

What if it doesn’t happen?

It’s rare, but admission can be delayed or cancelled, for example if market conditions change sharply or a regulatory condition isn’t met. If that happens, any conditional trades are cancelled.

Formal admission is also the starting gun for other things, such as the clock on a lock-up period.

Related terms: Conditional dealing, IPO, Float