SMALL investors may now subscribe to initial public offerings (IPO) online, following the Philippine Stock Exchange, Inc.’s (PSE) launch of a web-based platform that looks to boost their participation in maiden offerings in the future.
The PSE said in a statement Monday that it introduced the PSE Electronic Allocation System (PSE EASy), which will allow local small investors (LSI) to subscribe to shares online every time there is an IPO.
LSIs are given a 10% allocation for every IPO, where they can subscribe to shares worth not more than P100,000.
“We noticed that the take-up of IPO shares by LSIs has never ever reached 2% in the past…We then designed an online LSI platform that will make subscribing to IPOs more accessible (even to investors in the provinces), efficient and convenient,” PSE President and Chief Executive Officer Ramon S. Monzon said in a statement.
Mr. Monzon explained that retail investors had to go through a “very cumbersome process” prior to the launch of PSE EASy. Investors had to go to designated IPO kiosks in select Metro Manila malls to secure a subscription form, which must be brought to their broker’s offices for acknowledgement.
The form must then be brought back to the mall kiosk for payment and processing.
With PSE EASy, retail investors can now sign up for an account online which must be confirmed by their respective stockbrokerage firms. Once approved, the investors can participate in the LSI option for IPOs.
In addition, the PSE will also be launching a PSE EASy mobile application by the third quarter of 2019. While investors will still have to use the website for account registration, the app may be used for all other functions such as submission of LSI subscription forms, updating of registration forms, and notifications for an upcoming or ongoing IPO, as well as other updates.
“We noted that most of our investors now trade online and they are very savvy when it comes to using mobile apps. We want to continue leveraging on technology to make investing in offerings particularly in an IPO readily available to them,” Mr. Monzon said.
In its 2018 Stock Market Investor Profile report, the PSE said that online trading accounts surged 60.9% to 625,763, from just 388,864 in the previous year. This allowed the bourse to record more than one million stock market accounts by the end of the year. The same report showed that 21.5% of account holders were aged 18 to 29 years old. — Arra B. Francia
