About This Chapter
The New Issues Market - Chapter Summary
Properly educate yourself on how to bring new issues to market by spending time in this detailed chapter. Don't miss important information such as the how financial syndicates are formed, and how they operate. Be sure you understand what a Preliminary Official Statement is and how it works in a new issue. Study the key components of understanding the underwriters' spread, compensation, and selling practices. When you've covered all of the lessons in this chapter, you will be able to:
- Explain the components of a financial prospectus, and give examples
- Define the Notice of Sale for municipal securities
- Understand the components of and primary financing for municipal securities
- Recognize the main parts of registration statements and offering materials for new issues
- Compare and contrast Qualified Institutional Buyers (QIB) and Accredited Investors
Our professional instructors have taken the complex topic of the new issues market and broken it down into easy-to-follow lessons. Each lesson highlights key topics, and is followed by a self-assessment to help you gauge your learning. Once you complete all of the lessons, try the chapter-end quiz to see if you're on track.
1. The Process for Bringing New Issues to Market
Corporations at some point want to raise money from public markets. This lesson discusses the process and steps that a company must follow to register and sell a new issuance of stocks or bonds to public investors.
2. Regulatory Requirements for Initial Public Offerings (IPOs)
Companies wanting to do an initial public offering must follow certain regulations to do so. This lesson discusses those regulations as well as illegal communications security brokers need to avoid in soliciting sales.
3. Financial Syndicates: Formation & Operational Procedures
For most stock and bond offerings, the lead underwriter forms an underwriting syndicate with other brokers in order to market the offering. This lesson discusses the formation of a syndicate and explains how a syndicate operates.
4. What Is a Preliminary Official Statement (POS)?
How can someone decide whether to invest in a government-issued bond? In this lesson, we'll look at official and preliminary official statements, including what they are and how they can attract and inform investors.
5. Financial Prospectus: Definition, Components & Examples
A financial prospectus is a legal document that provides a lot of financial, company, and transaction information for prospective investors to decide whether or not they want to invest.
6. Delivery of Prospectus: Rules & Requirements
A prospectus must be given to investors prior to investing in many different situations in the investment industry. This lesson discusses the rules pertaining to delivering prospectuses to investors.
7. Notice of Sale for Municipal Securities: Definition & Components
Municipal bond offerings are done by state, city and county governments. A notice of sale must be prepared and submitted containing the details of the issuance. This lesson discusses municipal bonds and the information in the notice of sale.
8. Primary Financing for Municipal Securities
Municipal securities raise primary funds for public projects. Methods include competitive sales, negotiated sales, and private offerings. Advanced funding is used to pay off bonds with another bond. Learn about these methods in this lesson.
9. Registration Statements & Offering Materials for New Issues
A new public offering is always an interesting experience to those who are participating. There are so many details that have to be planned and requirements to be met for an offering to be a success.
10. Underwriters' Spread, Compensation & Selling Practices
Investment brokers are involved in public offerings of corporate stocks and bonds for fees and compensation for selling the securities being offered. This lesson discusses the forms of compensation received.
11. Qualified Institutional Buyers (QIB) vs. Accredited Investors
Opportunities abound in investment markets to buy private securities or invest in risky ventures. Individuals and companies who are knowledgeable about risk are permitted under government regulations to invest in risky types of securities.
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Other chapters within the Series 7 Exam: Study Guide & Practice course
- Advertising & Public Communication in the Securities Industry
- New Issue Regulations in the Securities Industry
- Brokerage Account Types & Restrictions
- Retirement Plans & Tax-Advantaged Accounts
- Handling Customer Investment Information & Discretionary Accounts
- Obtaining Supervisory Approvals for Investment Accounts
- Analyzing Customer Investment Profiles
- Analyzing Customer Financial Statements
- Understanding Equity Securities
- Tax Treatment of Equity Securities Transactions
- Packaged Investment Products
- Variable Life Insurance & Annuities
- Real Estate Investment Trusts
- Direct Participation Programs
- Understanding Options in Investing
- Debt Securities
- Investing in Corporate Bonds
- Municipal Securities
- Municipal Securities Analysis & Regulations
- Registered Hedge Funds
- Asset-Backed Securities
- U.S. Government Agency Securities
- Investment Product Disclosures
- Customer Updates & Record Retention
- Customer Transactions & Confirmations
- Transactional Delivery Obligations & Settlement Procedures
- Investment Disputes & Customer Complaints
- Addressing Margin Issues