PSE president Ernest Leung said the new facility can be a convenient alternative to the current practice of securing the necessary forms directly from the broker firms or cut-out of forms printed in the newspapers.
Leung said the facility shall make available online the application to subscribe for local small investors to fill out electronically. After accomplishing the forms, the investor will select the stockbrokerage house to process his or her subscriptions. Upon selection, the broker firm will be bound to service the retail account.
Leung said broker firms interested in this online scheme can open a separate IPO depository account with Equitable PCI Bank, Rizal Commercial Banking Corp. or other banks acceptable to the issuer or underwriter.
He said the IPO account number of the broker firms shall be posted on the PSE website to guide the investors when depositing their subscription payments.
Leung said the new facility is part of the local bourse’s efforts to perk up the market and offer better services to the investing public.
With this facility, Leung said he expects processing of subscriptions from local small investors to be faster.
A local small investor is defined, under the PSE rules, as someone who is willing to subscribe to a minimum board lot or whose subscription does not exceed P25,000. The rules give small investors a 10-percent discount on the offer price of IPO shares.
Patterned after the Hong Kong and Malaysian Stock Exchanges, the PSE proposal on IPO discount was adopted to expand investor base and make the public more aware of the benefits of the equities market.
Local small investors are expected to see a guaranteed rate of return on their investment since they would be buying the IPO shares at 10 percent less than what would be offered to other investors.
Apart from broker firms, other distribution outlets for the 10 percent offer to local small investors are branches of participating universal banks and investment houses.
The PSE could raise this level to 15 percent, depending on the issuer’s discretion and when the issue is five times oversubscribed.