IPOs or Initial Public Offerings

AFXC Eliminates all Conflict of Interest in IPO Issuance

A problem that had surfaced in recent years is that shares offered in pre-IPOs, having been priced substantially lower than the subscription price in the subsequent IPO, meant that many analysts who participated were able to acquire shares at very low prices. The Conflict of Interest is clear. Analysts are likely to have a personal interest in promoting stocks they own, thus tainting the independence of their recommendations. Corporations were also anxious to have analysts come on board as shareholders, in part because of the creditability analyst ownership conveys to the investing public. Analyst ownership may also result in positive investment recommendations that become a marketing campaign for the firm's stock.

Alliance FX Capital, Ltd. (AFXC) do not allow our analyst to take a position in any IPO prior to or during the stock offering.

In connection with a securities offering or other investment banking transaction and during the course of such an offering or transaction, our policies permit Analysts to meet and speak with potential investors, at meetings and in conversations not involving the issuer or investment banking colleagues, for purposes of investor education and information only.

However, Analysts may not actively market an investment banking transaction, and investment banking personnel are prohibited from directing Analysts to engage in such marketing efforts.

We prohibit Research Analysts from soliciting or receiving any inducement in respect of their publication of research and we restrict certain communications between Research Analysts and Investment Banking personnel. Our Research Analysts are strictly protected from inappropriate influence over their independent views.

AFXC is very much inclined to reject a company’s inquiry, for our investment banking services involving IPO issuance, if we get strong rejection signals from the Research Department. Our Analysts are encouraged to screen for situations that could become detrimental to our investor clients interest with regard to IPO issuance.

Exchange Listed IPOs

For the benefit of our customers, Alliance FFX Capital, Ltd. (AFXC) will initiate, as underwriter, or participate in an underwriting group’s Initial Public Offering (IPO).

An Initial Public Offer (IPO) is a process through which an unlisted Company can be listed on the stock exchange by offering its securities to the public in the primary market. The object of an IPO may be relating to expansion of existing activities of the Company or setting up of new projects or any other object as may be specified by the Company in its offer document or just to get its existing equity shares listed by diluting the stake of existing equity shareholders through offer for sale.

A New Listing

A New Listing is an IPO process through which a company approaches the Stock Exchange for listing of its equity shares. Companies, fulfilling the eligibility criteria prescribed by the Exchange, are from time to time approved for listing on the Exchange. Seamless new listing routs for new or start-up companies might start with the Bermuda Stock Exchange, the Frankfort Stock Exchange or the Toronto Stock Exchange and then move on to listing on the NASDAQ or the London Stock Exchange. This process will proceed with solid business and financial growth fulfilling ever more stringent exchange criteria


A Pre-IPO is an offering of shares in a company before its initial public offering (IPO). Pre-IPO offerings are available only to a limited number of individuals, and are done in advance of an expected IPO. Pre-IPO prices are generally much lower than they would be at the IPO, but are risky for the investor, as their value is contingent upon the company eventually making an IPO. The planned IPO may never take place. In addition, shares from a pre-IPO are unregistered and are likely to be very difficult to sell until the public offering is completed.

Many companies and investment brokers present an opportunity for high returns by investing in a start-up enterprise at the ground floor level. But investing at the pre-IPO stage can involve significant risk for investors.

Any company that wants to offer or sell securities to the public must either register the transaction with the SEC or FSA or meet an exemption. The most common exemptions include those found in U.S Regulation D of the U.S. Securities Act. But to meet these exemptions, the company and its investment banker generally cannot advertise the offering or make solicitations to the general public. Only offerings to existing company investors, Institutional clients or current Private Equity customers are allowed. Prior Customer Inquires or Opt-in Rosters are considered non-general public solicitations. If you ultimately decide to invest, find out whether your stock will be restricted in any way. And be sure to ask how, if at all, you can liquidate your investment if the company does not go public.

In order to Ease Private Placement Constraints for Pre-IPOs and act upon the Small Company Capital Formation Act, the SEC in the U. S. will soon finalize new regulations promoting capital formation.

In the U.S., congressional Rep. Darrell Issa has sent a letter to the SEC regarding small business capital formation, particularly in the pre-IPO context. SEC Chair Ms. Schapiro has ordered a review of all the rules affecting capital formation for small companies and is reconsidering current restrictions on communications in IPOs.

U.S. representative David Schweikert introduced the Small Company Capital Formation Act in the U.S. House of Representatives. The bill seeks to increase the offering threshold from $5 million to $50 million for public offerings of smaller companies and exempt their requirement for registration under the Securities Act pursuant to Regulation A.

Alliance FX Capital, Ltd. conducts all required and reasonable due diligence on any Pre-IPO companies we might offer our customers. But, this should not be used as the entirety of your research and review before you invest.

Alliance FX Capital, Ltd. strives to provide you with data of the highest possible accuracy. Our data is obtained electronically from multiple suppliers including The Bermuda Stock Exchange , The London Stock Exchange, The Frankfurt Exchange and NASDAQ amongst other reliable sources.

On the bright side, Pre-IPO investing is the closest thing to “Angle” investing or private “Venture Capital” start – up funding which has made so many investors very wealthy when the right situation presents itself.

It is important that if you want to receive information on any Pre-IPO offering being made available through AFXC that you go to our Contact Us page and request a Disclaimer form and a Terms and Conditions form to both be signed and returned such that you may be included on any Opt-in Roster or List of Interest. At Alliance FX Capital, Ltd., we strive to bring to our customers pre-offerings of equity situations that stand a high probability of substantial price appreciation during the initial offering (IPO) and in the commencement of trading as a listed stock on an exchange.

You might want to Contact Us about upcoming sponsored offerings and alerts.

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