Retail investors to miss out on IPOs
The Australian Securities Exchange (ASX) should reserve at least 25 per cent of every initial public offering (IPO) to retail investors, OnMarket BookBuilds believes.
Responding to the ASX's proposal to reduce the minimum number of investors a company must have to list to (100 for large companies and 200 for small companies), the firm said the rules could result in retail investors and self-managed superannuation funds (SMSFs) being locked out from participating in IPOs.
The capital raising platform provider firm's chief executive, Ben Bucknell, said the ASX should reserve 25 to 40 per cent of every IPO, as more than 572,000 SMSFs account for $600 million in assets.
"Unless a percentage is reserved for ordinary Australians, they will continue to miss out on the opportunity to bid in most IPOs," Bucknell said.
"But listing rules that give SMSFs certainty that they will be treated fairly in allocations will make a new $600 billion pool of capital available to companies raising capital.
"This could lower the cost of raising capital and have national benefits for the Australian economy, jobs and growth."
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
