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FAQ article

Is Investing in IPOs Risky, and What Are FINRA Rules 5130 and 5131?

Yes, IPO investments carry significant risk, including post-listing price volatility, limited company track record, and no guarantee of long-term performance. FINRA rules 5130 and 5131 are mandatory US regulations that require you to confirm you're not a "restricted person" and that you understand anti-flipping guidance before placing a US e-IPO order.


  • Key IPO risks:
  • Stock price after listing can be very volatile, moving significantly in the first days or weeks.
  • The company may have a limited public track record, making future performance harder to predict.
  • There's no guarantee the stock will perform well long-term.
  • Information about the company is more limited compared to established public companies.
  • Read the prospectus: Pluang recommends carefully reading the company's prospectus — the official document filed with the US Securities and Exchange Commission (SEC) — before placing an order. It's linked from each IPO's detail page and contains detailed information about the company's business, risks, and how the IPO is structured.
  • FINRA rule 5130: Requires confirming you're not a "restricted person" — meaning you and your immediate family aren't an employee of a broker-dealer or in a finance-industry role that would prohibit IPO participation.
  • FINRA rule 5131: Requires acknowledging anti-flipping guidance — confirming you understand that selling shares too quickly after an IPO is discouraged.
  • Mandatory and non-skippable: Both acknowledgements must be confirmed at order time and cannot be bypassed.
  • Support: For any issue with your order, allocation, or shares, contact Pluang Customer Support through the app.

Related questions:

Q: What is a prospectus and where do I find it?
It's the official SEC filing with full company, business, and risk details; find it linked on that IPO's detail page.

Q: What is a "restricted person" under FINRA rules?
Someone employed by, or an immediate family member of someone employed by, a broker-dealer or certain finance-industry roles, barred from IPO participation.

Q: Who do I contact if I have a problem with my IPO order?
Reach out to Pluang Customer Support through the app for help with your order, allocation, or shares.