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.
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.