IBIPO Auction System

Interactive Brokers makes access to IPOs offered by WR Hambrecht + Co through an electronic dutch auction system. This IBIPO Auction System is available to all Interactive Brokers customers through Account Management under Trading Access. At this time the following IPOs are available:

None

An IBIPO auction is typically open for bids for one to two weeks prior to the closing date of the offering. However, the auction will close in as little as an hour after the Securities and Exchange Commission declares the registration statement effective. We usually know about 48 hours before this is going to happen. Everyone who has bid on the offering will be notified at this time. Once the bidding concludes, the WR Hambrecht + Co's OpenIPO^TM auction system assembles the bids and, working from highest to lowest, finds the first bid price that will sell all the offering’s shares. This is the "clearing price" and will be the maximum price at which the issuing company will offer its shares.

The issuing company and the underwriters then decide the price at which the company will offer the shares, taking a number of economic and business factors into account in addition to the clearing price. The company may choose to sell shares at the clearing price, or it may offer the shares at a lower offering price. If the number of shares bid for at or above the public offering price exceeds the total number of shares in the offering, the OpenIPO^TM auction system allocates shares on a pro-rata basis. Under these circumstances, allocations will be rounded to multiples of 100 or 1,000 shares, depending on the size of the bid.

To place a bid through the IBIPO Auction System, you need to have a brokerage account with Interactive Brokers. Once you have an account, you may submit your bid online for the number of shares you wish to purchase and price per share. The minimum bid is 100 shares and there is no maximum bid. You may bid any price you want, whether it is above, within or below the range stated in the preliminary prospectus. Customers may not enter a bid amount that is greater than the Net Liquidation Value of their account, and accounts that do not meet this criterion during the auction period will have their bid quantity reduced. If your bid is successful, you must have sufficient funds in your account one business day after the auction closes to purchase the shares at settlement, which generally occurs three business days after the closing of the auction.

If you are an Interactive Brokers customer, you can launch the IBIPO Auction System through Account Management/Trading Access/IBIPO Auctions. If you are not an Interactive Brokers customer, you can open an account by clicking the "Open an Account" button on the upper right corner of this web page. Once inside the IBIPO Auction page, all currently available IPOs will be displayed.

In a Dutch auction, more than one bid can be successful. For example, if you place five bids at different share prices and three bids are successful, you will receive the combined number of shares from all three successful bids at the clearing price. Your maximum potential obligation is the sum total of all shares in the tiered bid multiplied by the clearing price.

Before making an investment decision, you should carefully read the preliminary prospectus, as it contains the only information the company can issue to the general public during the offering. For detailed information about the auction process for any particular IBIPO type of offering, please read the preliminary prospectus, including the section of the preliminary prospectus entitled Plan of Distribution. A prospectus for each IPO company can be found within the IBIPO Auction System.

You can enter, change or cancel your bid any time up until the close of the auction. Bid quantity may be modified, but to change a price a bid must be cancelled and re-entered. After the close of the auction, you will not be able to change or modify your bid online. You also may cancel your bid at any time until the Notice of Acceptance is sent; however, to cancel your bid after the auction closes, you will have to contact Customer Service by telephone.

In most cases, you will not need to reconfirm your bid. You will have the ability to withdraw your bid at any time until the closing of the auction. After the auction closes and the public offering price has been determined, bidders who submitted successful bids will receive a notice of acceptance and will be obligated to purchase the shares allocated to them. However, if any of the following events occur, we will require that bidders reconfirm the bids they have submitted in the offering:

• More than 15 business days have elapsed since the bidder submitted his or her bid in the offering.
• There is a material change in the prospectus that requires a recirculation of the prospectus by the underwriters.
• For an IBIPO auction with a $4 price range (e.g. $25–$29), if the public offering price in the offering is more than 20% above the high end of the price range or below the low end of the price range.
• For an IBIPO auction with a $2 price range (e.g. $25–$27), if the public offering price in the offering is more than 20% above the high end of the price range or more than 20% below the low end of the price range.
  

If one of these events occurs, you will need to reconfirm your bid. In the case of a reconfirmation, we will notify all bidders via email. Please follow the instructions in the email that you receive in order to ensure that your bid remains in the auction.

In accordance with securities industry rules, Interactive Brokers LLC is restricted from accepting bids if you, or an immediate family member, are an associated person, affiliated person or employee of an exchange member or a member of an exchange. Certain exemptions apply to this IPO bidding restriction and you can click here for a copy of NASD Rule 2790 which outlines these exemptions. It should also be noted that the IPO restrictions only apply to persons associated with US securities exchanges and not US commodities or non-US securities exchanges. If you believe one of these exemptions applies, please email us at ipocompliance@interactivebrokers.com.