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Saturday, July 2, 2022

UK trading executives urge IPOs for retail buyers

retail buyers

The platforms are encouraging boards and advisers of companies considering IPOs to make sure that some of their offerings are open to individual investors

Executives at AJ Bell, Hargreaves Lansdown and Interactive Investor in the U.K. are pushing companies to open up IPOs to neglected retail buyers, Bloomberg reported on Monday.

The three trading platforms urged the government to consult on retail buyers gaining access to IPOs, saying the Treasury should consider a regulatory obligation to include them.

The platforms are encouraging boards, executives and advisers of companies considering IPOs to make sure that some of their offerings are open to individual investors.

According to Bloomberg, for too long, U.K. listings have been the preserve of financial institutions and we urge you to consider the rights of retail shareholders in relation to IPOs, Andy Bell, Chris Hill and Richard Wilson, the chief executive officers at AJ Bell, Hargreaves Lansdown and Interactive Investor, respectively, wrote in a Feb. 18 letter to the U.K. Economic Secretary to the Treasury John Glen.

According to the executives, day traders were excluded from 93 percent of London floats between October 2017 and October 2020.

The move to include smaller investors was born out of a full U.K. market which included companies such as bootmaker Dr. Martens and greeting card platform Moonpig that have jumped over 17 percent in debut sessions after opening their share selling exclusively to institutional funds.

Large London IPOs have tended to leave individual investors out, Bloomberg writes, but smaller offerings have often relied on retail demand. London’s inaugural marijuana listings have tended to focus on that aspect. And, it could be changing now as companies such as PensionBee look to give customers options to be shareholders as the company plans to float on the London Stock Exchange.

Robinhood is also considering selling shares directly to users as it could potentially go public very soon. That would also be an unusual move as retail investors don’t usually participate in IPOs at the offering price.


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