SGX mulls setting aside 10% of Mainboard IPO shares for retail investors

Up to a maximum of $100m.

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

This is the second consultation on the introduction of a mandated minimum IPO allocation to retail investors. In 2012, the regulator proposed a 5% retail allocation.

The increase in the proposed retail IPO allocation percentage follows positive feedback for a minimum allocation of shares in IPOs to retail investors from the 2012 consultation, the SGX said.

The SGX said that over 90% of IPOs which occurred in 2010 to 2015 had retail investor application rates which were greater than 10% of the total offer size, indicating retail demand for IPO shares.

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