A reason why many IPOs are underpriced is to meet the Regulation A requirements of the OSC.

Question

Quizplus · Accepted Answer

The primary reason many IPOs are underpriced is not to meet Regulation A requirements of the OSC, but rather to ensure the success of the IPO by attracting investors, creating demand, and leaving room for the stock price to increase post-IPO. Regulation A is a part of the U.S. securities law that allows smaller companies to raise money from the public with less regulatory paperwork compared to a full IPO, and the OSC (Ontario Securities Commission) is a regulatory body in Canada, not directly related to the underpricing of IPOs in general.

A Reason Why Many IPOs Are Underpriced Is to Meet