STSM041310 - Exemptions and reliefs: exemptions: growth market shares - recognised growth markets - how to qualify as a recognised growth market - 20% compounded annual growth test condition

A market can apply to be a recognised growth market if it is a recognised stock exchange or (with effect from 1 January 2024) a Financial Conduct Authority (FCA) regulated multilateral trading facility (MTF) and meets one of two conditions - see STSM041290.

The 20% compounded annual growth test condition (section 99A(5)(b) FA 1986)

This condition is that HMRC is satisfied that the market’s rules require companies seeking admission to demonstrate at least 20% compounded annual growth in gross revenue or employment over the three periods of account preceding admission.

Details of the formula for calculating whether this condition has been met can be found at http://www.hmrc.gov.uk/gds/stsm/attachments/annualgrowthtestformula.doc (Chrome and Edge browser users may need to copy and paste the address into the address bar).

Information on the market capitalisation condition is in STSM041300.