Discretionary Management
Discretionary investment management is an agreement under which you entrust investment decisions to BNB. From participation in IPO bookbuilding to selling after listing, we manage each client's investments as one continuous process in a separate account. In keeping with the weight of the decisions entrusted to us, we keep our procedures and reporting clear.
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Discretionary Investment Management
Discretionary investment management refers to being entrusted, in whole or in part, with investment decisions regarding financial investment products and other instruments from an investor, and acquiring, disposing of, or otherwise managing such financial investment products on an investor-by-investor basis in consideration of each investor's financial circumstances, investment objectives, and other factors (Article 6 of the FSCMA).
The IPO discretionary investment management service is one in which the client entrusts investment decisions and management to the Company, and the Company directly carries out subscription, allocation, and trading for IPO and pre-/post-listing investment opportunities. We provide integrated management across the entire process, from institutional bookbuilding participation strategies to post-listing selling strategies.
Domestic newly listed IPO shares, Pre-IPO and mezzanine (CB, BW, etc.) linked investments, and trading in the secondary market after listing, among others.
Professional institutional investors as defined in Article 271(1) of the Enforcement Decree of the FSCMA.
Who It's For
The discretionary investment management service is intended for professional institutional investors as defined in Article 271(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act. Among them, it is particularly well suited to the following institutions.
IPO investing runs on a tight calendar and involves a great deal of operational work, from bookbuilding and subscription to allocation and sale. The service suits institutions that need an asset manager to take on this process.
Suited to institutions that wish to manage IPO shares and investments around listing in an account separate from their existing assets, and to track that performance on its own.
Suited to institutions that wish to set out the investment scope, restrictions, and management policy in the agreement and expect consistent management within those terms.
What You Gain
A discretionary mandate is a contract in which you entrust us with investment decisions. Here, in concrete terms, is the structure within which those decisions are handled and what BNB's IPO-specialized discretionary management offers institutional clients.
From analysis of the offering company and bookbuilding to subscription, allocation and selling after listing, one investment organization makes decisions through the same process. The basis for decisions is not lost as the stages change.
When orders for discretionary accounts are placed together and allocated, BNB's Pre-Allocation Regulation applies mutatis mutandis, and results are divided by account according to criteria set before the order. Allocation when the filled quantity falls short of the order is confirmed by the Compliance Officer.
IPO allocation rules keep changing, with priority allocation for lock-up commitments and tighter eligibility for bookbuilding among recent examples. We reflect the revised standards when deciding whether to participate, what price to bid and whether to commit to a lock-up.
We manage within the investment scope and restrictions set in the contract. Pre-Compliance screens out breaches of regulations and limits before trading, and a loss-cut principle limits how far losses on individual positions can grow.
The Compliance Officer, independent of the investment organization, also serves as Chief Risk Officer, and the Compliance Team cross-checks each stage before, at the time of, and after investment.
Discretionary assets remain in accounts in the client's name, and transactions and results are reported in the manner and at the intervals set in the contract. Transaction details can also be checked through the financial institution where the account is held.
Integrated Management
A discretionary IPO mandate handles a single issue across several stages. Each stage builds on the decisions made in the one before.
We assess corporate value and the appropriateness of the offering price on the basis of the registration statement, IR materials, and analysis of comparable companies.
We decide on the bid price and quantity and participate in institutional bookbuilding. Whether to offer a lock-up commitment is also decided at this stage.
Once the offering price is set, we subscribe, receive the allocated shares, and make payment.
We decide when to sell according to scenarios set in advance, taking into account post-listing prices, supply and demand, and lock-up periods.
Within the investment scope set out in the agreement, Pre-IPO and mezzanine-linked investments (CB, BW, etc.) and post-listing secondary-market trading may also be managed.
How IPO Shares Are Allocated
IPO shares are allocated to several groups of investors in set proportions. Within the institutional portion, standards on lock-up commitments and policy funds also apply, so discretionary management of IPO shares begins with understanding this structure. Below are the current allocation standards as set out in Financial Services Commission material.
KOSPI 25% · KOSDAQ 25%
The portion allocated to individual and other general subscribers. This portion does not change when the cornerstone investor system takes effect.
KOSPI 20% · KOSDAQ 0–20%
The portion allocated to the employee stock ownership association made up of the issuer's officers and employees.
KOSPI 5% · KOSDAQ 10%
Policy funds that invest at least a set share of their assets in lower-rated bonds and similar instruments. Since July 2025, their separate allocation has applied only to shares placed under a lock-up commitment of at least 15 days.
KOSDAQ 30%
Funds that invest at least 50% of their assets in venture companies and related firms, given priority allocation in KOSDAQ IPOs only. As with high-yield funds, this applies only to shares placed under a lock-up commitment of at least 15 days.
KOSPI 50% · KOSDAQ 15–35%
The portion for asset managers, discretionary managers, pension funds and other institutions that take part in bookbuilding. At least a set share of the institutional allocation (40% from 2026) goes first to institutions that commit to a lock-up.
Process
We listen to the institution's investment objectives and size, the permissible investment scope, and any constraints.
We confirm that you qualify as a professional institutional investor and explain the service, the investment risks, and the fee structure.
Together we set the management terms, including the investment scope, management policy, investment restrictions, and reporting method.
We enter into a discretionary investment management agreement and provide you with a copy. The discretionary assets are held in an account in your name.
Within the scope set out in the agreement, we participate in bookbuilding, subscribe and receive allocations, and trade after listing, following BNB's investment process.
We report on management activity and results in the manner and at the intervals set out in the agreement. Where necessary, we review the management terms together with you.
Before You Sign
The discretionary investment management service is intended for professional institutional investors. We confirm eligibility before signing.
Please check in the agreement which assets may be invested in, and within what limits.
Please check how the discretionary management fee is calculated and when it is payable, as well as costs arising in the course of management, such as brokerage commissions.
Results depend on market conditions and changes in asset prices, and investment principal is not guaranteed. IPO shares may be subject to sale restrictions for a period under lock-up commitments, and unlisted shares and mezzanine securities may be difficult to dispose of at the desired time.
A copy of the agreement is provided at signing. The method and frequency of management reports are also set out in the agreement.
Please confirm in advance the termination procedure and how assets held at the time of termination will be handled.
FAQ
Under discretionary investment management, you entrust all or part of your investment decisions to BNB, and BNB carries out subscriptions and trades directly. Under investment advisory, BNB provides opinions and strategies, and you carry out the investments yourself.
The discretionary assets remain in an account in your name. BNB is responsible for investment decisions and trading under the agreement and does not hold your assets directly.
BNB's discretionary investment management service is intended for professional institutional investors as defined in Article 271(1) of the Enforcement Decree of the FSCMA. Retail investors may use our investment advisory service.
We report on management activity and results in the manner and at the intervals set out in the agreement. You can also check account transactions through the financial institution where the account is held.
Gains and losses in a discretionary account belong to the client. Results may vary with market conditions and changes in asset prices, and investment principal is not guaranteed.
Inquiry
Tel +82-2-476-4840 · info@bnbasset.com
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