Moscow Exchange will introduce a service for a more transparent distribution of shares at IPOs
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Director of the Stock Market Department of the Moscow Exchange (MOEX: MOEX) Boris Blokhin said RBCthat the site plans to introduce the “Smart Allocator” service for IPO organizers, which will allow creating different scenarios for allocation (distribution of securities during an IPO and SPO between different groups of investors). The exchange plans to introduce the service in the third quarter of this year. Previously, I wrote about Moscow Exchange’s plans to implement this technical solution “Kommersant”.
The problem of distribution of securities during placements arose against the background of the active participation of retail investors in them, the number of which sometimes exceeded 100 thousand people. As a result, in some IPOs, for example Diasoft, most investors received only 1-3 shares (see. “Kommersant” dated February 13).
According to Mr. Blokhin, Smart Allocator will have many allocation scenarios that IPO organizers will be able to implement with the click of a button. In particular, they will have the opportunity to approve all applications in the same proportion or establish a single allocation for a certain type of investor, as well as set a minimum allocation volume for each application.
The top manager said that the number of share distribution scenarios will gradually increase depending on market demands. He suggested that ultimately the organizers themselves will be able to create individual allocation scenarios for specific transactions. Mr. Blokhin said that the service will be implemented in the exchange infrastructure and market participants will not have to carry out significant internal technical improvements.
The director of the stock market department noted that in the current market situation, when the capital market is extremely active, several problems arise. In particular, the opacity of allocation rules and additional costs for IPO organizers due to the huge number of applications, he clarified. “A lack of understanding of the allocation rules led to investors submitting a large number of orders or placing huge orders, including with leverage, in the hope of getting as large a share of the shares as possible,” the top manager said.
About the innovations of the market for initial placements in conditions of high activity of non-professional investors – in the material of Kommersant “IPO retail and wholesale”.
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