Retail investors are largely missing out on the best ASX floats as institutions get first dibs of the best deals says online IPO broker OnMarket.

OnMarket believes punters are locked out of two-thirds of IPOs – meaning they end up mainly with opportunities in  riskier offerings by virtue of what’s left from the big funds and institutions.

Since 2016 OnMarket chief Ben Bucknell has been lobbying for a rule change to give retail investors a minimum 25 per cent of shares offered in all initial public offers. He is now targeting his campaign to the Financial Services Royal Commission.

“There is a reasonable expectation that initial public offerings will be offered to the public but ironically I think we have a situation where large, profitable and cash flow positive companies are being pre-sold to institutions,” he told Stockhead.

“The very premise of the stock market is that all investors will be treated in the same way, secondary trading should not be dependent on what brokerage you pay.”

Mr Bucknell believes Australia should follow Singapore and Hong Kong where a percentage of an IPO is already allocated to the public.

Hong Kong was the first to acknowledge a lock-out, changing its listing rules to stipulate a minimum 25 per cent allocation to the general public.

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Singapore followed last May, mandating that all mainboard IPO companies had to allocate at least 5 per cent or $50 million — whichever is lower — of their offer to retail investors.

Over the past 10 years, the average IPO has traded 14.8 per cent higher than its issue price on debut, Mr Bucknell said.

“There needs to be genuine fair participation in the market.

“When a company goes public and its shares are to trade the very next day, why should retail investors be locked out?”

The premise of equal access was the initial catalyst to start OnMarket back in 2015. Since the emergence of online brokers in the late 1990s, technology has helped rectify the disparity.

While bank fees and careless lending have been front and centre in the Financial Services Royal Commission, Mr Bucknell encourages investors to submit their concerns on the issue by emailing FSRCenquiries@royalcommission.gov.au.