Japan FTC to Warn against Too-Low IPO Prices


Tokyo, Jan. 26 (Jiji Press)--Japan’s Fair Trade Commission has drawn up a report that setting inappropriately low prices for shares of newly listed companies in initial public offerings could violate the antimonopoly law, it was learned Wednesday.

The move follows a survey by the commission last year in which newly listed companies expressed their frustration with their low IPO prices. Such prices are set through consultations with securities firms acting as lead managers in the listing process.

In the report, the antitrust watchdog will indicate that the unilateral setting of low prices by lead managers amounts to abuse of a superior bargaining position under the law.

The report is expected to be released later this week and presented to a meeting of the Japan Securities Dealers Association later in January.

The association will then draw up measures for improvement, such as increasing flexibility in setting IPO prices and shortening the listing process, and publish them in February.

[Copyright The Jiji Press, Ltd.]

Jiji Press