AIB flotation - expatriates

J

Joe Hill

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I am an Irish citizen, now living in the Middle East (due in no small part to the collapse of the banking sector!).

I payed taxes in Ireland for more than 30 years, including towards the bail-out of the banking sector. Now I find that having suffered the pain of the down-side I am excluded from investing in AIB via the IPO, which seems to be open only to residents of Ireland and the UK.

I am no expert on IPOs, is this restriction normal/right?
 
Are you confusing a restriction an individual stockbroker applies to a government restriction?

I have seen Goodbody say that to become a client you need to be a resident of UK or Ireland, I imagine that is something to do with their regulation, and not to do with this particular IPO. Also I guess if someone was currently non-resident buy had an old Goodbody account then they'd have access to the IPO - they'd hardly check - I've not changed my address with them for a few years because they make it unnecessarily awkward (has to be done via mail).

There are other stockbroking firms involved, maybe see what they say.
 
No offence, but the brokers don't want to take on ginnets.
Its a lot of paperwork, similar to opening a bank account.
 
Well I fired off a complaint to the investor relations department - we'll see how far that gets!
 
ashambles said:
Are you confusing a restriction an individual stockbroker applies to a government restriction?

I have seen Goodbody say that to become a client you need to be a resident of UK or Ireland, I imagine that is something to do with their regulation, and not to do with this particular IPO. Also I guess if someone was currently non-resident buy had an old Goodbody account then they'd have access to the IPO - they'd hardly check - I've not changed my address with them for a few years because they make it unnecessarily awkward (has to be done via mail).

There are other stockbroking firms involved, maybe see what they say.
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In order to access the retail investor section of the AIB floatation site you must agree to a number of conditions including "I AM RESIDENT AND PHYSICALLY PRESENT IN Ireland or the United Kingdom"

If you fib, and click through, all of the participating brokers are Irish. I have a share dealing account in Luxembourg, but it looks as if that's no good.
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Conditions for sale of AIB shares appear v.restrictive in general. One has to have an a/c with one of a small number of stockbrokers. Generally local ones with very high commission charges - no Degiro for instance. Also is it the case that existing shareholders are not going to be allowed the opportunity to increase shareholdings? I have two shares worth just over ten euro. They were worth more once.
 
I got a reply from AIB that said, I think, in a roundabout way, that this was not their decision and that I should blame the Minister for Finance.

So, I have written to Finance too.
 
This really is a bizarre thread.

Of course it's legal for a company to offer it shares to the public in whatever jurisdictions it sees fit.

Why go to all the trouble and expense of clearing an offering document for distribution in Abu Dhabai (or wherever)?

Investors in other jurisdictions can always buy the shares on the secondary market after the initial public offering if they want.
 
Joe Hill said:
. it should be open to all EU citizens, and certainly to all Irish citizens.
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Why?

This has nothing whatsoever to do with citizenship.

Why go to the trouble and expense of offering the shares to residents in other EU jurisdictions if you can get the offer away to Irish & UK residents alone?

Bear in mind that we are talking about taxpayer money.
 
The Department of Finance responded to my complaint saying:

"The Minister has decided to open the retail offer of the AIB shares to residents of the UK and Ireland only. If the Minister were to open the retail offer to retail investors in multiple other countries, this would be prohibitively expensive and administratively burdensome in that the Minister would have to comply with relevant local laws regarding selling to retail investors. Such compliance could require the publication of a prospectus in each other jurisdiction as well as the appointment of local intermediaries and local advisors by both the Minster and AIB, which we are sure you can appreciate would result in significant costs to the State. The Minister’s intention is to recoup as much of the State’s investment in AIB as possible and to open up the retail offer in the manner suggested would significantly decrease the amount of the sale proceeds."

This is irrelevant to my complaint. There is a difference between allowing non-residents to subscribe for shares and marketing shares to non-residents. The "prohibitively expensive and administratively burdensome" obligations referred to by the Department would, as far as I know, only apply if shares are marketed to non-residents.

I'm still not happy and have asked the Department to address my complaint, which is that as an Irish citizen and taxpayer I should have the possibility of applying for shares.
 
The Department's response mirrors the advice you have already received here.

Shares cannot be offered for sale to residents in other jurisdictions without incurring significant additional costs. The fact that you are an Irish citizen or taxpayer is simply irrelevant.

Pursuing your "complaint" any further would be a complete waste of time.
 
Joe Hill said:
I'm still not happy and have asked the Department to address my complaint, which is that as an Irish citizen and taxpayer I should have the possibility of applying for shares.
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Why exactly do you think the government should break the law in your jurisdiction and sell you financial instruments illegally? There is absolutely no difference between the sale of AIB shares and any other financial instrument so why should the government in your jurisdiction wave the rules and allow the Irish government to sell shares to their residents? A baseless claim!
 
Sarenco said:
Shares cannot be offered for sale to residents in other jurisdictions without incurring significant additional costs.
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This is correct, but these costs only apply if you "offer" i.e. take the initiative and market the shares. If you are passive, and an investor from another jurisdiction comes to you, these requirements do not apply.
 
Joe Hill said:
This is correct, but these costs only apply if you "offer" i.e. take the initiative and market the shares. If you are passive, and an investor from another jurisdiction comes to you, these requirements do not apply.
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Sorry Joe but that is simply not correct in the context of a public offering of this nature. This has nothing to do with marketing or reverse solicitation.

The Department has accurately described the legal position.
 
Sarenco said:
Sorry Joe but that is simply not correct in the context of a public offering of this nature. This has nothing to do with marketing or reverse solicitation.

The Department has accurately described the legal position.
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Well I'm not a lawyer, but I can say, having worked in financial services in a few countries, that in all of those countries home state requirements only apply to offerings.

Also bear in mind that while this exercise is styled as an IPO it is not in fact an IPO, and therefore not subject to IPO rules. Rather, it is a sale of shares by a shareholder (the State).
 
Joe Hill said:
Well I'm not a lawyer, but I can say, having worked in financial services in a few countries, that in all of those countries home state requirements only apply to offerings.
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So which states exactly are you talking about, 'cause I've worked an a few IPOs over the years and I can recall a single instance where that was the case.
 
Jim2007 said:
So which states exactly are you talking about, 'cause I've worked an a few IPOs over the years and I can recall a single instance where that was the case.
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Ireland United Kingdom, UAE.
In order to market in these jurisdiction you must comply with the requirements in those jurisdictions, but where a resident of any of those jurisdictions, solely at his/her own initiative, decides to seek to subscribe for a share offering in another jurisdiction then the regulatory regime of the home country of that person do not apply to the share offering. Laws do not generally have extra-territorial effect.
 
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