is it a violation to participate in an IPO offering that is not OVERSUBSCRIBED?
I would imagine the required priority of transactions should still be enforced.
I thought the recommendation was NOT to participate for employee and family
Here’s a question that might help… An analyst routinely has the opportunity to offer his clients the opportunity to purchase hot new issues. He tells his clients that he will distribute each issue equally among those interested, with himself included in the distribution. The clients do not object to this. With respect to Standard VI(B), Priority of Transactions, this: A) may be a violation despite the clients’ approval. B) cannot be a violation because the clients know of the practice and agree. C) may be a violation because it is impossible to distribute hot new issues equally. D) may be a violation because clients should not be offered “hot” securities. Your answer: A was correct! Just because the clients know of a practice does not make it right. The analyst must put the clients first. It is a violation for the analyst to participate in a hot new issue which can lower the allocation to any given client below what that client would prefer. This is tantamount to putting the analysts interests ahead of the clients interests.
slight difference from the initial question though - this would result in some clients receiving lower allocations than they would if the analyst did not participate I thought the original question was on the lines that there was some “extra” shares still available - is it okay for the analyst to get those (is it possible to have “extra” unsubscribed shares in an IPO?) I think it is okay to benefit from something if you are not disadvantaging clients. The standards say “Members and candidates should preclear their participation in IPO’s, even in situations where there are no conflicts of interest” Note the word “candidates” - I hope those of us sitting for the exam are following these 
serf_dude Wrote: ------------------------------------------------------- > slight difference from the initial question though > - this would result in some clients receiving > lower allocations than they would if the analyst > did not participate > > I thought the original question was on the lines > that there was some “extra” shares still available > - is it okay for the analyst to get those (is it > possible to have “extra” unsubscribed shares in an > IPO?) > > I think it is okay to benefit from something if > you are not disadvantaging clients. The standards > say “Members and candidates should preclear their > participation in IPO’s, even in situations where > there are no conflicts of interest” > > Note the word “candidates” - I hope those of us > sitting for the exam are following these pre-clear their participation in IPO’s EVEN IN SITUATIONS WHERE THERE ARE NO CONFLICTS OF INTEREST… so in this case you can’t!!! because even if you allocate all the share to all the clients, and there’s still 50% not allocated… i guess you still can’t allocate some of the IPO for yourself…
the research and objectivity standard says that an analyst cannot participate in IPOs of firms that are in the industry that he/she covers. under subscribed or not… under any circumstance
…maybe not for the analyst, but maybe for a client broker providing employer allows it after all clients have all they want first?