The Financial Supervisory Commission (FSC) is planning to revamp its current underwriting system by allowing more retail investors to subscribe for shares through the drawing of lots when companies hold initial public offerings (IPOs) in the future, commission officials said at the weekend.
The percentage of shares to be purchased through drawing lots could be raised to a maximum of 30 percent of the total amount of each IPO, up from 10 percent currently, if the number of subscription applications reaches 100 times that of the IPO, said Wu Tang-chieh (吳當傑), director general of the commission's Securities and Futures Bureau.
If the number of applications reaches 75 times that of the IPO, the percentage of shares to be sold through drawing lots will be 25 percent of the IPO, while an amount 50 times larger will correspond to 20 percent.
If the amount of applications are 25 times higher, the ratio of lot drawing will be 15 percent.
The new rule may take effect as early as next month, Wu said.
The planned revision to the system came after criticism of the negligible opportunities available for retail investors when up to 650,000 people scrambled for shares of solar cell maker E-ton Solar Tech Co (益通光能) in March.
The subscription amount was 1,000 times that of E-ton's IPO, which offered odds of a mere 0.04 percent of being successful in the lot draw.
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