An oversubscription privilege is a feature of some rights offerings that allows a shareholder who has exercised all of their basic subscription rights to request more shares than their entitlement. The extra shares come from the pool left over when other holders do not take up their rights. The price is the same as for the basic subscription.
If requests exceed the shares available, the issuer allocates them pro rata, usually in proportion to the number of rights each applicant exercised, and refunds the excess payment. Custodians therefore record the basic exercise and the oversubscription as separate parts of the client's election instruction. The privilege helps an issuer raise the full amount without relying wholly on underwriters, and it lets committed holders increase their stake. UK open offers call it an excess application facility. See rights exercise and rights allocation.