What is an Initial Public Offering (IPO)?

initial public offering ipo

IPO or Initial Public Offering: is the process by which a private corporation offers its shares to the public (enlisted in a stock market) for the first time. Companies that are growing which needs additional capital will usually consider IPOs to raise money, instead of debt financing.

How can we invest in IPO?

An ordinary Pinoy can participate in an Initial Public Offering by:

  • Online Broker: Usually Stock Brokerage can offer some number of shares to its clients but there is a limited number of shares the broker can offer.
  • Local Small Investors Program (LSIP) Under the Small Investors Program of the Securities and Exchange Commission and the Philippine Stock Exchange, Inc., Local Small Investors (LSI) can subscribe to Initial Public Offerings. An LSI is defined as a “share subscriber” who is willing to subscribe to a minimum board lot or whose subscription does not exceed Php100,000.00.

PSE Electronic Allocation System (PSE EASy) Onboarding

The PSE Electronic Allocation System or PSE EASy is web-based and mobile applications developed by the Exchange that will enable initial public offering (IPO) stakeholders fulfill the local small investor (LSI) involvement online.

The PSE EASy enables investors to submit all LSI requirements online. This eliminates the need for investors to personally bring their subscription form and other requirements for receiving centers. This will also allow investors based in key cities and provinces all over the country, who may not have access to receiving centers, to participate in the LSI program of an IPO.

The PSE EASy platform will also make things easier for IPO underwriters and the trading participants (TPs). The underwriters will have access to a dashboard that gives real-time updates on the LSI subscription submitted through the system and daily updates on the LSI payments. This allows the underwriter to gauge the demand of retail investors for a particular IPO.

The TPs are also given a dashboard to monitor which of their clients have LSI application and which have already paid for their applications. Aside from the web-based application, the PSE will also be introducing a mobile application of PSE EAS y which will be available for iOS and Android users by 2019

Trading Participants are required to undergo the PSE EASy onboarding process by submitting the following onboarding documents:

  1. TP information to be encoded in the PSE EASy user agreement (a copy of the user agreement will be sent to the Trading Participant’s registered email address) (Annex ”B”);
  2. Accomplished PSE EASy onboarding form (Annex “C”); and
  3. Accomplished PSE EASy user registration form for all the TP’s authorized personnel (Annex “D”).

Kindly Coordinate with the Trading Participants Relations Section at telephone number 876-4844 or email tprs@pse.com.ph should you have questions or clarifications.

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