The Bangladesh Securities and Exchange Commission has set Tk 10,000 as the maximum and minimum amount of initial public offering application for each general investor.
The new decision will be implemented from the IPO subscription of Sena Kalyan Insurance Company Limited, BSEC officials said.
BSEC commissioner Shaikh Shamsudin Ahmed told New Age, ‘We want to ease the IPO system for the sake of the development of the market,’ he said.
Previously, a general investor can apply for IPO shares worth any amount between Tk 10,000 and Tk 50,000.
From now on, each general investor can apply for IPO shares worth Tk 10,000 only.
BSEC officials said that the regulator made the decision as the number of beneficiary owner accounts have suddenly declined in recent times due to a change in the IPO distribution system.
The number of BO accounts was 26,62,172 on April 29 but it came down to 19,83,966 on Wednesday.
However, the minimum investment of Tk 20,000 in the stock market will remain mandatory for each investor to be eligible for participating in any IPO.
Earlier on December 31, 2020, the BSEC decided to allot IPO shares among the investors on pro rata basis instead of IPO lottery system that came into effect from April 1.
The BSEC decided to scrap the lottery system to ensure that every applicant would get shares in proportion to their application value.
In addition, the commission amended its Public Issue Rules, 2015, which was published as a gazette notification on August 24.
According to the new rules, general investors and non-resident Bangladeshis will enjoy 70 per cent and 5 per cent quota respectively from IPO under the fixed and book building methods of IPO.
Previously, they got 50 per cent shares of any IPO in the fixed price method and 40 per cent in the book building method.