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SGX proposes minimum 10% allocation of IPOs to retail investors

This is aimed at giving individuals more investing opportunities and is part of its long-term plan for the Singapore stock market, the bourse said. 

SINGAPORE: A larger proportion of shares sold during initial public offerings (IPOs) will go to retail investors in the future, according to a consultation paper released by the Singapore Exchange on Friday (Feb 26).

The bourse wants to introduce rules that will require firms listing on the mainboard to allocate at least 10 per cent of their IPO shares to retail investors, up from 5 per cent the minimum allocation it proposed in an earlier consultation paper in 2012.

However, companies can allocate a smaller percentage if the value of IPO shares amount to S$100 million, it said.

SGX said its proposal is aimed at giving individuals more investing opportunities and is part of its long-term plan for the Singapore stock market. There is currently no minimum allocation for retail investors.

More than 90 per cent of IPOs between 2010 and 2015 had retail investor application rates that exceeded 10 percent of the total offer size, indicating that there is strong retail demand for IPO shares, SGX said.