The Philippine Stock Exchange plans to jack up the maximum initial public offering (IPO) allotment for local small investors (LSI) by at least quadruple to P100,000 or any such amount warranted on a case to case basis to make equities investing more worthwhile for retail investors.
This marks a significant increase in the maximum LSI subscription from a meager cap of P25,000 at present.
In a memorandum posted on its website on Tuesday, the PSE issued the proposed amendment to seek public feedback on or before Dec. 29.
“The Exchange believes that the maximum allowable investment under the LSI program needs to be updated as well as to be indexed against the increasing offer size and the investing capacity of investors,” the memo said.
The LSI was introduced as a mechanism to allow small investors to participate in an initial public offering (IPO).
“The Exchange proposes to allow a maximum investment size per LSI that is applicable to the offer size. By indexing the maximum to the offer size, we hope to increase the total take-up of the LSI allocation.”
At present, LSIs are defined as those willing to subscribe to as much as P25,000 of shares. Based on the proposed amendment, LSI will be defined as a share subscriber who is willing to subscribe to a minimum board lot “and whose subscription does not exceed P100,000 or such amount that may be allowed by the exchange, on a case to case basis, to help facilitate greater participation and subscription to the local small investor allocation.”