Greensheet

DEFINITION of 'Greensheet'

A document prepared by an underwriter to summarize the main components of a new issue or initial public offering (IPO). A greensheet is an internal marketing document that is compiled by a new issue's underwriter and intended for distribution to brokers and institutional sales desks of the underwriting firm.

The purpose of a greensheet is to prepare salespeople to effectively market a new issue to the public and to determine which clients may be interested in becoming large volume buyers of the new issue. Greensheets provide only an introduction to a new security issue and are not intended to be comprehensive in nature.

BREAKING DOWN 'Greensheet'

A greensheet, by law, contains only information that would appear in the issue's prospectus. Greensheets are for intended for public distribution, and are meant for the sole use of the underwriting firm's employees. A greensheet's disclosure explains the purpose of the document, the restrictions on its distribution, the limitations on the information it contains, and a statement that specifies that the information is not a solicitation of securities.

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