SEC considers tiered public float for IPOs

The Securities and Exchange Commission (SEC) is looking at a tiered approach for the minimum public float requirement of companies seeking to list on the stock exchange, its chairperson said.

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SEC Chairperson Francisco Ed. Lim said the current 20% minimum public float requirement for companies planning to conduct an initial public offering (IPO) is a “one-size-fits-all” situation that could be addressed by a tiered system depending on the company’s market capitalization.

“A 20% float at IPO, regardless of the size of the issue, was done to improve the liquidity of the market, which is one of the basic problems. But I think the 20% (float) is ‘one size fits all.’ Personally, I don’t think that’s the way,” Mr. Lim said in an interview to be aired on One News’ Thought Leaders with Cathy Yang on July 25.