The best brokers for IPO investments in 2022

IPO investing requires capital holders to have a certain level of knowledge and experience in stock trading. The initial placement segment itself has great opportunities for profit, but also carries risks. That is why many IPO brokers require the status of a qualified investor.

In turn, the broker itself must have a license and meet a high level of reliability. Therefore, investors are advised to choose companies that are in the top of the best brokers to participate in the IPO.

What is an IPO broker and how to choose it

This is an intermediary between a company and an investor specializing in IPOs, that is, offering shares placed on the stock market for the first time.

In Russia, the IPO has not yet become as widespread as abroad. Therefore, Russian investors have to look for brokers who can provide access to the American market, where hundreds of new companies enter the stock exchange every year.

There are a number of criteria by which investors should choose an IPO broker, these are:

1. Security, which primarily implies that the broker has a license issued by the regulator. Accreditation of foreign brokers is carried out by the countries in which they are registered. Russian companies are licensed by the Central Bank of the Russian Federation.
2. Having the status of a qualified investor as an official requirement. To date, such a condition is set for the most part by Russian brokers.
3. Entry threshold. It is important to pay attention to the minimum threshold, because its range is quite wide. The limits of fluctuation are from 50 to 300 thousand dollars, which is not available to every investor.
4. The volume of IPOs offered. So, some brokers offer investors no more than 1 transaction per year, others access exclusively to the Asian stock market.
5. The duration of the lock-up period (the period of silence), that is, the period of time during which it is prohibited to sell shares. It can last 90 days or more before the option is executed. However, some brokers allow the sale of securities and charge up to 15% for this.
6. The presence and amount of a commission fee that can be charged for depositing funds to the account, as well as as a percentage of the profit received.
7. Presence (absence) connections with the broker. This criterion is very important, because the investor should be able to get answers to his questions.

Top reliable IPO Brokers

Based on open information, official company resources and investor reviews, we have compiled a list of the most popular Russian and foreign brokers suitable for participation in the IPO.

Freedom Finance

A Russian investment company that conducts banking, brokerage, depository and dealer activities. It has access to the American stock market. To open a brokerage account, an investor will need at least 2 thousand dollars. This broker’s “period of silence” lasts 93 days.

Tinkoff Investments

To participate in an IPO through this broker, you need the status of a qualified investor and a minimum of $ 5,000. At the same time, if the investor’s asset is less than 3 million rubles, the available securities can be sold at any time. There is no lock-up period for such clients.

VTB

A financial company with a good reputation and rich experience, ready to offer investors a sufficient number of IPO transactions. Restrictions: the entry amount is not less than 50 thousand dollars or 300 thousand rubles, the status of a qualified investor to work with foreign securities.

Finam

Broker No. 1 in Russia with access to the markets of the Russian Federation and the USA. It offers a relatively low entry threshold and does not set a “period of silence” for investors.

Aton

An investment group with headquarters in Moscow, operating since the 90s. Provides access to American IPOs, as well as IPOs on the Hong Kong Stock Exchange.

Foreign IPO Brokers

Of the top foreign brokers with which you can participate in the IPO, we note:

1.United Traders, offering participation in an IPO with the lowest entry threshold of only $ 50 and setting a lock-up period of 3 months.

2. Just2Trade, like the previous broker registered offshore, requires the status of a qualified investor and sets a minimum threshold of $ 1,000. The period of silence for this broker is only 30 days.

3. Interactive brokers, which is under the jurisdiction of the United States, does not set a minimum entry threshold, does not require a special status, but charges a subscription fee for account maintenance.

In conclusion, we note several important points for investors regarding the IPO.

Firstly, despite the loyalty of some brokers, it is advisable to start investing with an amount of at least $ 1,000.

Secondly, to participate in an IPO through licensed brokers, you need the status of a qualified investor.

And finally, thirdly, the broker’s presence of a “period of silence” indicates a wide range of IPO transactions.

Published: 18 January, 2022