Muscat: The Executive President of the Capital Market Authority (CMA), Sheikh Abdullah Salim Al – Salmi, has issued a new decision that approves the sharing of the price of the shares in an Initial Public Offering (IPO) which aims to regulate the issuance in an IPO by specifying the price determination & in addition, lays out the procedures to be followed in order to ensure fair – market pricing.
Decision number 43/2021, was issued on the basis of the Regulation for Public Joint Stock Companies, which was issued earlier, this year.
According to the rules, the main change that has been incorporated is that there will be a third party appointed by the CMA (a licenced entity or an audit firm) to verify the pricing of the offering. The cost of this audit will be borne by the issuer. The issuers will be obliged to offer the shares at the recommended prices, provided by the auditors.
The rules emphasise that the issuer manager should provide all appropriate information for the public on the IPO and the pricing method through book building (a legally transparent process through which the fair price is arrived at by involving investors from the greater industrial sector) in various media to address any concerns of small subscribers, specifically when subscribing at the highest limit of the price band.
