Every IPO applicant to receive stocks from April
The stock market regulator issued a directive in this regard on Thursday
With effect from 1 April 2021, every general investor who will apply for initial public offerings (IPO) will receive stocks, rather than only a few investors receiving stocks as per the current IPO lottery system.
The Bangladesh Securities and Exchange Commission (BSEC) issued a directive in this regard on Thursday.
On 31 December 2020, the commission decided to bring more transparency to the IPO application process.
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BSEC said that the allocation of proportional (pro rata) rates will be implemented (in favour of the existing lottery system) provided general investors comply with the following two conditions.
A general investor must invest at least Tk20,000 in a listed company at market price in the secondary market of the stock exchanges, and he/she must apply for an IPO at Tk10,000 or multiples thereof.
The securities regulator has also decided that in the event of the approval of an IPO in the book-building method, bidding and publication of prospectus will be done simultaneously instead of via the existing dual consent letter. This decision will take effect from 1 April 2021.
