Pre-Syndicate Bid


DEFINITION of 'Pre-Syndicate Bid'

A bid entered by a syndicate manager or underwriter in the Nasdaq system to stabilize the price of a Nasdaq security prior to the effective date of a registered secondary offering. The term "penalty bid" is also used.

BREAKING DOWN 'Pre-Syndicate Bid'

This is permissible under SEC Rule 10b-7; otherwise the practice is prohibited. Because the bid serves to stabilize the price of the stock, it helps facilitate distribution of the offering. This process is sometimes also referred to as "pegging".

  1. Nasdaq

    A global electronic marketplace for buying and selling securities, ...
  2. Syndicate

    A professional financial services group formed temporarily for ...
  3. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  4. Syndicate Bid

    A bid that can be entered in the Nasdaq system to stabilize the ...
  5. Underwriting

    1. The process by which investment bankers raise investment capital ...
  6. Pegging

    1. A method of stabilizing a country's currency by fixing its ...
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