S7 - Chapter 6 - New Issue Marketplace for Equities Flashcards
Spin-off
shares of a subsidiary company are allocated to parent company’s shareholders. No immediate tax consequences
Type of Underwriting: Firm-Commitment
Liability for unsold shares?
Definition
Liability: Syndicate
Syndicate must absorb losses on unsold shares
Type of Underwriting: Best-Efforts
Liability for unsold shares?
Definition
Liability: Issuer
Unsold shares are returned to the issuer
Type of Underwriting: Best-Efforts All or None
Liability for unsold shares?
Definition
Liability: Issuer
Offering is cancelled if all shares are not sold
Type of Underwriting: Best-Efforts Mini-Maxi
Liability for unsold shares?
Definition
Liability: Issuer
Offering is cancelled if set minimum is not sold
Type of Underwriting: Standby
Liability for unsold shares?
Definition
Liability: Syndicate
Syndicate agrees to buy any shares not purchased by existing stockholders in a rights offering
The Registration process for securities (3 steps)
- Preregistration period
- Cooling-off period
- post-effective period
Registration Statement must contain…
information about the issuer, its business, its owners and its financial conditions
Prospectus delivery requirements:
Non-Listed IPO
90 days
Prospectus delivery requirements:
Non-Listed follow on offering
40 days
Prospectus delivery requirements:
IPO to be listed on NYSE or Nasdaq
25 days
Prospectus delivery requirements:
Follow on offering listed on NYSE or Nasdaq
no requirement
