An arrangements that allows the MANAGING UNDERWRITER to reclaim a selling concession from a syndicate member in connection with an offering. The securities originally sold by the syndicate member are purchased in a SYNDICATE COVERING TRANSACTION. Rule 100, Regulation M.
In efforts to discourage investors from selling their IPO shares immediately after the offering, some brokers will impose a penalty for "flipping" the stock. It is important for an investor to know if there a penalty for selling and what the time restrictions are before making the decision to buy an IPO. WRH+Co does not impose penalty bids.
an arrangement that permits the managing underwriter to reclaim a selling concession from a syndicate member in connection with an offering when the securities originally sold by the syndicate member are purchased in syndicate covering transactions
fee charged to brokers by the lead underwriter for having to take back shares already sold.
To discourage individual investors from quickly selling IPOs, some brokerage firms levy a penalty fee on a broker if his or her client sells an IPO within a certain period of time. This is meant to discourage flipping.
To discourage individual investors from quickly selling IPOs, some brokerage firms impose a penalty bid on the individual broker if his or her client sells an IPO within a certain period of time. Thus, a broker who would incur a financial penalty if a client wants to quickly sell an IPO has a built-in conflict of interest. Long a little publicized practice, penalty bids are now receiving greater scrutiny by the SEC and some state regulatory agencies. In any case, individual investors should find out ahead of buying an IPO whether the brokerage firm imposes penalty bids. However, if your broker fails to return telephone calls or fails to sell securities as you direct, you should seriously - and immediately consider - changing brokers.
A syndicate manager's or underwriter's offer to buy a security at specific price during a new issue distribution. The bid acts to stabilize the price of the stock, to facilitate distribution. The bid, also called "pegging," is permitted under Securities and Exchange Commission Rule 10b-7; otherwise the practice is prohibited. (See bid , new issue , syndicate manager , underwriter .)
A term used to refer to a syndicates bid to stabilize the price of a new issue in the after market. See Stabilization.
A Syndicate Penalty Bid can be displayed on the Nasdaq System during the period of a registered public offering of a security. Such a bid may be entered by the managing underwriter or a member of the underwriting group acting on its behalf, and is intended to facilitate the offering by stabilizing the price of the security during the distribution period. This activity is permissible under SEC Rule 10b-7.
A term used to refer to a syndicate's bid to stabilize the price of a new issue in the aftermarket. See also: Stabilization.
