SGX mandates mainboard IPO firms to allot 5% for small investors

It is aimed to facilitate greater retail participation.

Singapore exchange announced that it will be mandating all mainboard IPO companies to allocate at least 5% of $50m, whichever lower, to retail investors.

According to Chew Sutat, SGX's Executive Vice President and Head of Equities and Fixed Income, the introduction of the minimum IPO allocation is aimed at facilitating greater retail participation in Singapore’s equities market. The new rules on the minimum allocation are effective May 2, 2017.

"Retail investors are important participants in the Singapore markets and giving them access to at least 5% of each Mainboard IPO will encourage more to consider equity investing. If market conditions permit, we encourage companies to make available more shares than the floor to retail investors,” he said.

He added, “We recognise that market forces are dynamic and will continue to monitor the public subscription trends of IPOs to ensure that the minimum allocation amounts are appropriate for the Singapore market.”