SGX proposes 10% minimum retail tranche for mainboard IPOs

The Singapore Exchange is proposing that mainboard companies allocate to retail investors a minimum 10 per cent of shares in their initial public offers (IPOs), up to a maximum of $100 million.

Between 2010 and last year, market debutantes on average set aside only 8 per cent of their IPO shares for retail investors, the SGX said.

But over the same period, 90 per cent of IPOs received applications for their public subscription tranches amounting to greater than 10 per cent of the total offer size.

“SGX’s proposal for a minimum 10 per cent retail allocation for shares of mainboard IPOs is aimed at giving individuals more investing opportunities in the Singapore equities market,” said chief executive Loh Boon Chye.

“While market conditions may have been uncertain of late, this initiative is for the long term and is part of overall enhancements to the Singapore stock market.”

This is the second time that the bourse operator has suggested introducing a minimum IPO allocation for retail investors. The first time it did so was in in 2012, when it proposed a 5 per cent retail allocation.

Yesterday’s proposal is a recalibrated one that takes into account the feedback the SGX received from the 2012 consultation and data from IPOs launched between 2010 and 2015, it said.