SoftBank’s brokerage unit plans to do something that has never be done in Japan’s capital markets – allowing individuals to participate in initial public offerings by setting the amount they wish to pay, rather than by the number of shares.
The investment giant plans to offer the shares of One Tap BUY, a smartphone-based brokerage controlled by its wireless unit, through this method as early as March 2020. Once it obtains the necessary regulatory approvals, this will mark the first time that investors can subscribe to an initial public offering (IPO) by a specified investment amount rather than a specified number of shares as done traditionally, said One Tap BUY chief executive Masaaki Uchiyama.
Investors can participate in IPOs for as little as 1,000 yen ($9.39). When you buy food or fuel your car, it’s easier to specify the amount of money you want to spend rather than the volume. The only thing investors want to know is how much they can gain from $10, said Uchiyama, who was quoted in Bloomberg.
SoftBank, along with Line and Rakuten are racing to onboard more customers via financial services. Line started an online brokerage with Japan’s biggest bank, Nomura Holdings whereas Rakuten last month announced it will start lending and issuing credit cards in the U.S. All three are expanding into new markets, targeting younger and less well-off investors.
SoftBank owns 46 percent of One Tap BUY, while Mizuho Securities holds 13 percent. Uchiyama, who joined the smartphone-based brokerage in 2016 after stints at the predecessors of SMBC Nikko Securities and Accenture, became the CEO in July.