Syndicate Agreement Architecture
Chapters in this video
- 0:00 Three syndicate roles and the kitchen analogy
- 1:22 Agreement Among Underwriters and lead manager authority
- 2:36 Several liability and the default trap
- 3:28 Selling group and the Selected Dealers' Agreement
- 4:17 Concession formula and selling group compensation limits
- 5:12 Deal wires and the SEC effective date trigger
- 5:51 Deal ID authority and regulatory wire types
- 7:13 Rapid-fire exam recap
What this video covers
- How the Agreement Among Underwriters (AAU) differs from the Selected Dealers' Agreement, and which role signs which contract
- Why syndicate members have inventory risk and selling group dealers do not, and how that risk gap maps to the fee structure
- The six substantive powers the AAU grants the lead manager, from pricing authority to stabilization to default handling
- Why AAU liability is several and not joint, and what actually happens when a syndicate member defaults on its allocation
- How the selling concession is calculated as public offering price (POP) minus dealer discount, and why selling group members never touch underwriting or management fees
- The mandatory versus internal deal wires the lead manager sends, and which require FINRA filing versus simple syndicate communication
- Who establishes the deal ID and why the test baits you toward FINRA or the Securities and Exchange Commission (SEC) as the answer
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