First of all, why is there a callback mechanism?
Originally, the application for listing on the Hong Kong Stock Exchange was restricted by the Hong Kong-China Companies Ordinance and the Securities and Futures Ordinance, which stipulated that the public should be invited to participate in the public offering. In the past, there was no private placement part in China Mainland and Hongkong IPO, only the public subscription part, that is, Tianwang Capital, was filled out in a white form. If the amount exceeded, IPO shares were distributed by lottery or in proportion. However, since the emergence of H shares, the arrangement of 100% public subscription has aroused the dissatisfaction of international investors, because 100% public subscription is not an international practice. In view of this, the CSRC began to relax the requirement of 65,438+000% public subscription, allowing investment banks to sell some shares to institutional investors by way of allotment. After a round of research, the CSRC thinks that it is fair and reasonable to reserve at least 65,438+00% IPO for public subscription, so today, a typical main board IPO is 90% rights issue and 65,438+00% public subscription. However, the CSRC also considers that retail investors will not get a large number of shares in the case of high public subscription enthusiasm, so it requires investment banks to set up a callback mechanism, and once the public subscription is too enthusiastic, some shares originally belonging to the rights issue will be allocated to the public subscription part to meet the requirements of retail investors.
Therefore, the word callback has a special meaning. The callback is because all the shares were originally subscribed by the public, and the investment bank approved by the CSRC allocated some shares to institutional investors for subscription. Now, due to excessive public subscription, some shares are transferred back to the public for subscription.
Typical callback mechanism
The typical callback mechanism is as follows:
Public subscription is 30 times or less: no callback is required.
The public offering is oversubscribed by 30-50 times: the public offering is increased from 10% to 30%.
Public subscription is 50 times higher than 100: public subscription is increased from 10% to 40%.
Public subscription 100 times or more: public subscription increased from 10% to 50%.
But this is only a typical callback mechanism, and there will be fewer callbacks for very large IPOs. What is the callback mechanism?
"Call-back mechanism" refers to the online issuance to ordinary investors by inquiring the legal person investors and determining the price; According to the subscription of ordinary investors, the stock distribution for legal person investors and ordinary investors is finally determined.
finance . Sina/stock/stock learn class/2006 06 26/ 1645268 1958 . s
The callback mechanism has been set at the time of issuance, which can be seen in the prospectus.