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by H. Bernstein - editor, Stockpatrol.comIn an effort to bring some semblance of fairness to the IPO process, the NASD has proposed a series of new rules and regulations. But is it enough?

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To account for the remaining difference, known second rule requires the calendar to skip a leap year every 100 years.

Financial Software Trading December 9, 2003 (StockPatrol) New York - In an effort to bring some semblance of fairness to the IPO process, the NASD has proposed a series of new rules and regulations. The first set of proposals, filed with the Securities and Exchange Commission in September of this year, addressed illegal quid pro quo arrangements, allocations to officers and directors of issuers and their families, and other IPO abuses.

largest ethanol producer in the U.S. The company priced an IPO of 18.3 million shares at $23 per share Wednesday. VeraSun expected to sell fewer shares at $18 to $20 per share, but demand for the stock was so high it sold out every share available at a premium. Trading in VeraSun Energy's shares on the New York Stock Exchange pushed the ethanol producer's stock up as high as $30.75 before trading down at $28.35 in afternoon trading in New York, but still at a 23 percent premium to the IPO price. Volume had reached 18, 739, 200 shares.

Online Stock Trading Company Now, the NASD is proposing a second set of rules that would, at the very least, change the IPO allocation process in the future.

He also successfully advised a real estate company on refinancing, which led to a $275 million IPO offering.

Forex Day Trading The new reforms, released by the NASD on November 24th, provide as follows:

(The very next day the new Minister of Agriculture said she'd be looking at changing a few rules.

Financial In Market The lead underwriter will be required to disclose indications of interest and final share allocations to the issuer. That way, the company that is turning public will have a complete picture of the allocation process.

Stock Trading System Brokers will be prohibited from accepting market orders to purchase IPO shares for one trading day after an IPO is completed. Hopefully, this would inhibit their ability to require customers to make after market trades as a condition for receiving IPO allocations.

Day Trading Stock Tip New procedures would ensure that reneged trades are not used to benefit favored clients of the underwriter. This would prevent those favored clients from canceling transactions if the IPO did not perform as expected.

Financial Forex Forex Software Lock-ups that apply to shares owned by the issuer's officers and directors would also apply to shares they receive in "friends and family" programs. Traditionally, officers and directors of the issuer agree to lock-up their shares for an extended period after the IPO - generally at least six months. Issuers often direct IPO allocations toward "friends and family" including those same officers and directors. This new rule would provide that all shares owned by the officers and directors, including those received as part of the IPO, are subject to the same lock-up. New notification requirements would be imposed when underwriters waive lock-ups. Underwriters occasionally waive lock-ups for a variety of reasons, including an unexpected public demand for shares. That early release will cause the company's publicly traded shares to be diluted sooner than anticipated. This rule would establish a new mechanism for notifying investors and the marketplace of pending early releases.

Stock Market Trading The NASD also is requesting public comment on a set of additional reforms designed to enhance the pricing of IPO shares, including:

Day Lesson Stock Tip Trading Requiring an independent broker to issue an opinion that the initial IPO price range and final offering price are reasonable and that the prospectus discloses this information.

Financial System Trading Encouraging the use of an auction system, such as a Dutch auction system or similar system, to collect indications of interest from customers and help establish the final IPO price.

Day Trading Future Enhancing prospectus disclosure of the valuation information used to establish the IPO price range and final price.

Financial Forex Market Trading The NASD maintains that these new measures have been calculated to "promote investor protection and a fair and open process for companies to raise capital in the public markets."

Online Trading Stock And Whether they actually will help to restore investor confidence in an industry under siege is quite a different matter.

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