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Why can’t I participate in the HK and US’s stock IPO?

An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. Public share issuance allows a company to raise capital from public investors.

In New Zealand, the Initial public offering (IPO) is considered as a “regulated offer”, and information about IPO must be disclosed in a product disclosure statement (PDS) and on the Disclose Register. Together, this information must include all material information about the offer of a financial product and be up-to-date, accurate and understandable. The purpose of the information is to assist investors with their investment decisions.

Tiger Brokers is able to offer our clients to participate in HK&US stock IPOs. However, none of the companies that did IPO in the HK&US stock market has a product disclosure statement that meets the Financial Markets Conduct Act 2013 and New Zealand Financial Market Authority’s requirement. As a result, retail clients are not able to participate in the HK&US stock IPO.

You can participate in HK&US stock IPOs if you are a wholesale/Eligible investor as defined by Financial Markets Conduct Act 2013.

Please download the wholesale certificate at here and submitted to clientservices@tigerbrokers.nz

 

The Financial Markets Authority (FMA) published several frequent asked questions on their website regarding the Schedule 1 offers and requirements under the Financial Markets Conduct Act 2013 (FMCA). The following excerpted FAQs are the most related and you can read more with the links attached at the end.

What is the level of experience needed to qualify as an eligible investor? Is training enough?

To qualify as an eligible investor, a person must have ‘previous experience in acquiring or disposing of financial products’ which allows them to assess the factors listed in clause 41(2)(a) to (c) of the FMC Act.

Simply attending training (irrespective of the nature and quality of that training) is not, in itself, enough because the person cannot be said to be experienced in acquiring or disposing financial products, and cannot certify themselves as an ‘eligible investor’.

After a person has experience in acquiring or selling financial products, it is up to that person to determine whether those acquisitions or disposals have given them sufficient experience to sign an eligible investor certificate. If the person believes they have sufficient experience to assess the factors listed in clause 41(2)(a) to (c), then they may sign an eligible investor certificate.

 

Who can sign off the confirmation of an eligible investor certificate? 

An authorised financial adviser (AFA), a chartered accountant, or a lawyer can certify the certificate. However, this person cannot be an associated person of the offeror, provider or another relevant person. The definition of an associated person is in section 12 of the FMC Act.  If the person signing off the certificate is a chartered accountant or an AFA, they cannot be someone who has in the last 2 years, provided professional services to the offeror, provider or another relevant person.

The purpose of the independent certification is to ensure the investor has been sufficiently advised of the consequences of giving an eligible investor certificate.  The person certifying the certificate must have no reason to believe the information is incorrect.

 

Read more at:

Offers under the FMC Act

Guide to Product Disclosure Statements

FMA FAQs

 

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