- new corporate issue MUST register with SEC
- sold 1)underwriting 2)private placement
- with underwriting corporate officers can sell some of their shares-underwriting is both primary and secondary underwriting
- primary part, new shares from company
- secondary underwriting, stock from selling stock holders
- bonds, preferred stock, common stock
- lead underwriter, sells securities
- selling syndicate, help sell securities
- corporations negotiate with underwriter to reduce cost of selling issues
issuer
- provide information for prospectus
- supply issue certificates
- a)register issue
- b)sell issue
- c)inform public about issue
- d) form selling syndicate, at time of negotiation with issuer underwriters
- e)write prospectus-satisfy SEC disclosure requirement, provide info for selling broker/dealers to give to clients
- blueskying, register issue with states where it will be sold
Important underwriter decisions:
- a)register issue with SEC
b)make sure issue satisfies state requirements - b)determine broker dealers to include in syndicate
The syndicate manager is responsible for
- blueskying the issue
- sending the registration statement to the SEC
- putting the prospectus together
- determining allocations for syndicate members
- stabilizing issue
- allocating securities for syndicate
- issuer gives firm necessary info and syndicate manager finishes registration
- managers direct underwriting process
- stabilizing issue happens at initial offering, maintaining public offering price
effective date
- date the issue is released to be sold
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