IPOs: Are there rules on 'first-come, first-served'?

I REFER to Mr Perry Tong Chee Wah's letter, 'IPO shares snapped up too quickly' (ST, March 22).

Why is it that some IPOs are on a first-come-first- served basis, while others are on a period of subscription with a closing date?

For first-come-first-served, there may be a greater tendency for investors to subscribe more than they can afford to risk. This may have contributed to most recent IPOs being sold out within minutes of the ATM opening.

The tendency to buy in the open market the next day at much higher prices also seems to be prevalent from anecdotal observation, perhaps due partly to the human emotion of having missed out the day before. This phenomenon may have driven first-come- first-served stocks higher than those not on a first-come-first- served basis.

What is the practice in the stock exchanges of other developed countries?

Thousands of people may be wasting their time queueing at ATMs before the subscription opening time.

Have any studies been done on the differential performance of first-come-first- served offerings and those not based on this?

Are there any regulations on whether and how institutions can decide on using this approach?