Selling Group


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.

BREAKING DOWN '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.

  1. Equity

    Equity is the value of an asset less the value of all liabilities ...
  2. Bond

    A debt investment in which an investor loans money to an entity ...
  3. Investment Bank - IB

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

    The spread between the amount underwriters pay an issuing company ...
  5. Debt Security

    Any debt instrument that can be bought or sold between two parties ...
  6. Underwriting

    1. The process by which investment bankers raise investment capital ...
Related Articles
  1. Brokers

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  2. Investing Basics

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  3. Brokers

    Uncovering The Securities Firm

    Learn about the various departments of a securities firm and the professionals who make it work.
  4. Retirement

    IPO Basics Tutorial

    What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop.
  5. Investing Basics

    3 Key Signs Of A Market Top

    When stocks rise or fall, the financial fate of investors change, as well. There are certain signs that can reveal a stock’s course, and investors don’t need to be experts to spot them.
  6. Investing

    Asset Manager Ethics: Rules Governing Capital Markets

    The integrity of the capital markets needs to be kept at utmost importance for all investors. This article shows how to maintain the integrity while investing.
  7. Investing

    How is Programmatic Advertising Changing Media?

    Understand what programmatic advertising is as well as the technology that drives it. Learn about the top four ways programmatic advertising is changing media.
  8. Investing News

    Understand the SEC Rules on Equity Crowdfunding

    The SEC's adoption of equity crowdfunding rules, initiated under the JOBS Act, enables small investors to invest in companies that show early potential.
  9. Investing Basics

    Tax-Efficient Strategies For International Clients

    In a globalized world, international clients seek to diversify holdings by accessing U.S. markets. Creative strategies will help optimize tax positioning.
  10. Professionals

    How to Create a Professional Brand on Facebook

    Facebook isn't going away, which means you can't ignore it. Because of it's size, it can be a great venue to build a professional brand and get noticed.
  1. What does 'going public' mean?

    Going public refers to a private company's initial public offering (IPO), thus becoming a publicly traded and owned entity. ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. What is considered a reasonable 12b-1 fee?

    A reasonable 12b-1 fee is generally considered to be 0.25% of the assets of the mutual fund. The maximum amount allowed for ... Read Full Answer >>
  4. How might a company use demographics to assess the size of a potential market?

    Demographics can be used to help a company determine key characteristics of the potential population to which it company ... Read Full Answer >>
  5. What is the difference between shares outstanding and floating stock?

    Shares outstanding and floating stock are different measures of the shares of a particular stock. Shares outstanding is the ... Read Full Answer >>
  6. What is the difference between market risk premium and equity risk premium?

    The only meaningful difference between market-risk premium and equity-risk premium is scope. Both terms refer to the same ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  2. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  3. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  4. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  5. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!