Selling Group

AAA

DEFINITION of 'Selling Group'

All financial institutions involved in selling or marketing a new issue of debt or equity but not necessarily participating in the underwriting consortium.

INVESTOPEDIA EXPLAINS 'Selling Group'

In many cases, the selling group is simply the underwriting group and does not include anyone who is not responsible for underwriting a portion of the new issue. The reason why the selling group may include only the underwriters is that these underwriters are unwilling to let competitors who are not bearing any of the risk to participate in the selling process.

Alternatively, the selling group may include a number of parties whose sole focus is to sell an allotment of the newly issued securities on behalf of the underwriting group. In this case, the non-underwriting sellers are sold the securities at a markup, but still at a discount from the expected market price for the security. These non-underwriting sellers make money at the transaction by the spread between their price and the market price, if it's higher than what they paid for the security.

RELATED TERMS
  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Underwriting Spread

    The spread between the amount underwriters pay an issuing company ...
  3. New Issue

    A reference to a security that has been registered, issued and ...
  4. Broker-Dealer

    A person or firm in the business of buying and selling securities, ...
  5. Equity

    1. A stock or any other security representing an ownership interest. ...
  6. Debt Security

    Any debt instrument that can be bought or sold between two parties ...
Related Articles
  1. Brokerage Functions: Underwriting And ...
    Brokers

    Brokerage Functions: Underwriting And ...

  2. A Look At Primary And Secondary Markets
    Investing Basics

    A Look At Primary And Secondary Markets

  3. Uncovering The Securities Firm
    Brokers

    Uncovering The Securities Firm

  4. What does 'going public' mean?
    Entrepreneurship

    What does 'going public' mean?

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center