Why is PI certification required for US IPO subscriptions?
US securities laws impose certain restrictions on private securities offerings to protect retail investors, and brokers conduct related business within this regulatory framework. As US IPOs are treated as an “international placing” in Hong Kong, the relevant SFC requirements require investors to qualify as Professional Investors (PI) in order to participate in the subscription.
The main reasons are:
Non-public offering: US IPOs do not have a “public subscription by retail investors” mechanism similar to Hong Kong IPOs.
Regulatory compliance: This is a regulatory compliance requirement of the Hong Kong Securities and Futures Commission (SFC), rather than a threshold independently imposed by the broker.
Investor eligibility: The allocation is made through an institutional investor channel, so subscribers must meet the applicable PI requirements.
