7.4 The Underwriting Syndicate
What 5 things is the manager responsible for?
-establishing offer price -establish timing of offering -control ads -make required filings
What 4 things are contained in a selling group agreement:
-manager acts for all underwriters -amount securities allotted to each group -how payment for shares is made to underwriter -provisions limiting selling group members liability
What is a selling group?
act as agent with no commitment to buy securities
Who signs the underwriting agreement?
all underwriter members
What type of underwriting is used in most municipal securities?
competitive bid
What does the agreement amonng underwriters do?
details each underwriters commitment and liability for unsold shares
What type of underwriting is used in most corporate securities?
negotiated
Syndicate members act in a ____ capacity, selling group members act as ____.
principal agents
In a firm commitment offering what do syndicate members do?
purchase from issuer and distribute on agreed upon amount
Do syndicate members or selling group members take on financial liability?
syndicate
What describes the participants responsibilities and allocation of syndicate profits if any?
syndicate agreement or syndicate letter
Who acts on behalf of the syndicate?
syndicate manager
What is the name of the contract that establishes the relationship between an issuer and an underwriter?
underwriting agreement
What is the investment banker who negotiates with an issuer called?
underwriting manager or syndicate manager