Western Account

AAA

DEFINITION of 'Western Account'

An offering agreement in which each underwriter in a consortium of underwriters is responsible only for selling its alloted amount of the new issue. Once participants have met their previously agreed upon target allotment sale, their liability in the offering is completed.

INVESTOPEDIA EXPLAINS 'Western Account'

A Western account is also known as a "divided account", as the share of liability is divided among the underwriters by the size of their allotment of the investment vehicle. It is the opposite of an "Eastern account", also known as an "undivided account".

RELATED TERMS
  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Eating Stock

    The forced purchase of a security when there are insufficient ...
  3. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  4. Underwriting

    1. The process by which investment bankers raise investment capital ...
  5. New Issue

    A reference to a security that has been registered, issued and ...
  6. Undivided Account

    An underwriting system in which each underwriter in the group ...
Related Articles
  1. Brokerage Functions: Underwriting And ...
    Brokers

    Brokerage Functions: Underwriting And ...

  2. Interpreting A Company's IPO Prospectus ...
    Fundamental Analysis

    Interpreting A Company's IPO Prospectus ...

  3. 5 Tips For Investing In IPOs
    Investing

    5 Tips For Investing In IPOs

  4. IPO Basics Tutorial
    Retirement

    IPO Basics Tutorial

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center