Singapore Exchange (SGX) today proposed new share allocations for retail investors participating in Initial Public Offers (IPOs). This initiative is another step in SGX’s plan to transform the securities market, assuring its relevance and competitiveness globally.
SGX is proposing revisions to its rules to raise the proportion of IPO shares available for retail investment for Mainboard IPOs with high retail demand. Not only will retail investors have more opportunities to participate in IPO subscription, their increased activity in the secondary market will also add to liquidity.
Following are the proposed new rules:
- Introduction of a prescribed minimum allotment of 5% of the total invitation shares to the public subscription tranche. For example, when 100 million new shares are issued in the IPO, at least 5 million shares must be offered for public subscription.
- Introduction of a claw-back mechanism that increases the number of shares allocated to the public subscription tranche when the total demand for shares in the tranche exceeds prescribed thresholds.
- When the demand through public subscription is below the prescribed thresholds, a reverse claw-back mechanism can be introduced to transfer shares from the public subscription tranche to the placement tranche.
SGX is seeking comment on the proposed IPO allocation arrangements and the prescribed claw-back thresholds. The consultation paper explaining the rationale and proposed rules in detail is available at www.sgx.com. Market participants and members of the public can send their feedback on the proposed rules from today till 29 October 2012 via:
Electronic mail : lm@sgx.com
Facsimile : (65) 6535 7919
Post/Courier : Singapore Exchange
2 Shenton Way
SGX Centre 1, #19-00
Singapore 068804
Attn: Mohamed Nasser Ismail / Chia Caihan, Issuer Regulation
SGX Consultation Paper Initiatives In Relation To Offer Structures Of IPOs Final
