Home>Basic Policy for Allocating Share Certificates and so forth to Customers Related to Offerings and so forth

Basic Policy for Allocating Share Certificates and so forth to Customers Related to Offerings and so forth

Basic Policy for Allocating Share Certificates and so forth to Customers Related to Offerings and so forth

Date of Establishment:January 16, 2004
(Date of Last Revision:October 14, 2011)

Shinsei Securities Co., Ltd.
  1. 1.When Shinsei Securities Co., Ltd. (the "Company") allocates share certificates and so forth related to the dealing in public offerings or secondary distribution(that are prescribed in Article 1 of the Regulations Concerning Distribution to Customers Related to Underwriting, etc. of Public Offering, etc. of Share Certificates, etc. of JSDA Self-regulatory Regulations, the same shall apply hereinafter ) or engagement of secondary distribution (hereinafter referred to as the "Offerings and so forth"), the Company is performing its business operations by making it a policy to accurately understand customers' various investment needs and to offer appropriate and various products corresponding to market mechanisms.
  2. 2.When allocating share certificates and so forth, the Company has the fundamental policy of endeavoring to grasp in advance the development of customer demand, handling Offerings and so forth properly and endeavoring to make fair and proper allocations.
  3. 3.The Company will allocate share certificates and so forth in relation to Offerings and so forth to customers in accordance with the following policies.
  4. (1)As the Company is specialized in wholesale type operations, the Company will generally allocate a larger portion to its corporate customers; and as the Company will mainly handle deals for securing stable shareholders willing to hold share certificates and so forth for a long time, the Company will not generally allocate share certificates and so forth to, in principle, individual customers and corporate customers exclusively established for the purpose of investing and managing individual assets (hereinafter referred to as "Individual Customers and so forth"; non-residents are excluded). The Company will allocate share certificates and so forth to corporate customers, properly taking into consideration the status of their participation in the building up of demand. Even when exceptionally allocating share certificates and so forth to Individual Customers and so forth, the Company will not, in principle, hold a lottery. Provided, however, that only when demand from Individual Customers and so forth exceeds the amount expected to be allocated to Individual Customers and so forth, the Company will hold a lottery with respect to a certain portion of the share certificates and so forth for the purpose of fairly offering an allocation opportunity.
  5. (2)The exceptional allocation of shares related to an IPO (Initial Public Offering) to Individual Customers and so forth without holding a lottery
    When the Company exceptionally allocates share certificates to Individual Customers and so forth, the Company has a policy of allocating the share certificates and so forth to customers satisfying the following standards after precisely taking into consideration customer needs.
  1. Standards with respect to the suitability rule
    The Company has a policy of allocating share certificates and so forth mainly to individual customers who have experience in securities investments for a period longer than three years and fully understand the knowledge and risks of investment in shares, including shares related to IPOs.
  2. Standards with respect to the exclusion of short swing trading
    The Company attaches importance to the development of share prices after the closing of an IPO. From this viewpoint, we attach importance to customers who are willing to hold share certificates and so forth for a long time. Therefore, the Company will allocate share certificates and so forth mainly to customers who are willing to hold share certificates and so forth for certain period. For this reason, the Company will confirm a customer's intention of holding share certificates and so forth at the stage of receiving an application.
  3. Standards with respect to appropriate participation in book-building
    When allocating shares related to an IPO, the Company will confirm the status of customer's appropriate involvement in book-building, and the Company will allocate share certificates and so forth preferentially to customers who have submitted appropriate notice of demand. For this purpose, in research about demand for shares related to IPOs conducted in the past, the Company will confirm whether or not an application of a customer and his/her notice of demand have been appropriate. Appropriate notice of demand means the demand to be notified for each issue by taking into consideration the conditions and so forth of the said issue.
  1. (3)Exceptional allocation of shares related to IPOs to Individual Customers and so forth by lottery When the Company exceptionally allocates share certificates and so forth to Individual Customers and so forth, and when the number of share certificates and so forth requested to be allocated by Individual Customers and so forth exceeds the expected number of share certificates to be allocated to Individual Customers and so forth, for the purpose of fairly offering an opportunity for allocation, the Company will, in principle, determine customers to whom a certain portion of share certificates and so forth will be allocated by holding a lottery. The lottery will be carried out in accordance with the following process.
  1. The Company will hold a lottery on the designated lottery date (at and after 4:00 p.m. of the date of determination of the issuing price) with respect to the notice of demand or application for allocation submitted to the Company's lottery account by Individual Customers and so forth during the book- building period and other periods designated by the Company by adopting the book-building method or any other method. In this case, out of the number of share certificates and so forth to be allocated by the Company, 10 % of the expected number of share certificates and so forth expected to be allocated to Individual Shareholders and so forth will be determined by the said lottery.
  2. When holding a lottery, numbers (random numbers) will be attached to the notice of demand or application for allocation subject to lottery, and the Company will hold a lottery based on the numbers.
  3. As a result of the lottery, even when an individual customer fails to draw a winning number, the individual customer will be treated as a candidate for allocation by a method without holding a lottery as provided in (2) above.
  4. An individual customer who has drawn a winning number will be informed to such effect and given guidance for applying over the telephone on the date of the lottery or on the following day. When the said communication over the telephone is impossible, winning in the lottery may be canceled at the discretion of the Company. Please understand in advance that individual customers who have failed to draw a winning number will not be informed to such effect.
  1. (4)In cases other than shares related to IPOs
    Securities, other than shares related to IPOs and already listed shares and so forth, will be allocated to applications submitted by customers satisfying standards (1) and (2) above, after taking into appropriate consideration the needs of customers (hereinafter referred to as "Other Allocations").
  2. 4.For the purpose of avoiding excessively concentrated allocation and improper allocations, the Company will not allocate shares related to IPOs to the same customer more than four times a year (except for allocations by lottery).
  3. 5.Notices of demands and applications for allocation can be made over the telephone.
  4. 6.With respect to the specific manner of book-building in each IPO, such as the notice of demand reception period and method of receipt, provisional conditions will be described in the "registration statements" (yuukashouken todokeidesho) and prospectus to be prepared by the issuer of each deal. Information on the reception period, method of reception to which the allocation method of the Company is added will be notified over the telephone or by mail and so forth simultaneously with the commencement of book-building for the deal.
  5. 7.In each individual deal, when the Company carries out book-building or allocations under a policy different from that which the Company has indicated in 1 through 5 above, such changes will be notified to customers together with the reasons for the change, simultaneously with the notification in 6 above.
  6. 8.The Company will not only comply with the the Financial Instruments and Exchange Law or the Rules of Self Control Associations, such as refraining from allocating share certificates for the purpose of compensating losses incurred by customers or giving additional profit to a customer, but will also endeavor to clearly stipulate an appropriate method of allocation in the internal rules and strictly comply with these rules, for example by refraining from allocating share certificates and so forth to a.persons designated by the issuer, b.officers and employees of the Company, c.persons who cause unfair treatment in socially by, for example, providing the Company with undue profits, and d. persons whose actions violate social interests, such as members of gangster organizations and persons related to gangster organizations or "racketeers" (sokaiya), and e.by refraining from excessively concentrating allocations to the same customer and refraining from improperly allocating share certificates and so forth, such as allocating shares related to IPOs on the condition of purchasing any other products. When it becomes clear that any notice of demand or an application for allocation is submitted by a customer falling under any of the aforementioned categories, the said notice or application will not be accepted by the Company.
  7. 9.The Company believes that it is the Company's mission to contribute to the development of the financial instruments trading market through fair allocations based on the fundamental policy for allocations, as stated above.

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