What Is a Fixed Price System?

The fixed price method means that the underwriter determines the issue price in advance, and the investor purchases at this price. If there is an over-subscription, the underwriter may have a larger distribution right or adopt a proportional allocation method.

Fixed price method

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The fixed price method means that the underwriter determines the issue price in advance,

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There are two types of fixed price methods: fixed price public subscription methods and fixed price allowable placing methods. The difference between the two is that the latter underwriter has the flexibility to place shares. The fixed price method is a relatively simple one in the pricing of stock issuance and is more commonly used in emerging markets.