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JSDA Proposes Measures to Improve IPO Pricing

The Japan Securities Dealers Association (JSDA) proposed measures to improve pricing for new initial public offerings, following government criticism that levels are being set too low, according to an official statement.

The report, released by JSDA’s working group, recommended steps that would allow brokerages to be more flexible in the way they set their prices to better reflect the supply and demand.

JSDA’s working group proposed that brokerages widen the pre-set ranges of IPO prices and, if demand is strong, allow the final price to go higher than those bands. It also proposed that the country should also shorten the time it takes for companies to offer shares after gaining approval to list.

The working group wants companies to implement the measures before the end of 2022.

In early January, the JSDA will proposed that IPO subscriptions be allowed during book-building, rather than having investors wait until the offer price is determined.