Regulator tweaks IPO allotment process

The securities regulator BSEC has brought significant changes to the initial public offering (IPO) allotment process making sure that shares will be allotted to every general investor who will apply for.

The new norms will be effective from April 1, 2021, said the Bangladesh Securities and Exchange Commission in a statement on Thursday.

“The IPO shares will be allotted to the general investor pro-rata basis instead of the existing lottery system,” it said.

An investor having at least Tk 20,000 investment in the listed securities will be considered eligible for the IPO share subscription and the minimum subscription amount in the IPO will be Tk 10,000, said the BSEC.

At present, investors need to deposit Tk 5,000 for subscribing to an IPO and the shares are allotted among the general investors through the lottery draw. Those who do not win in the lottery get back their subscription money to their Beneficiary Owners or BO accounts.