DEFINITION of 'Subscribed'

Subscribed refers to newly issued securities that an investor has agreed or stated his or her intent to buy, prior to the issue date. When investors subscribe, they expect to own the designated number of shares once the offering is complete.

BREAKING DOWN 'Subscribed'

The goal of an investment bank in a public offering of securities is to have the right number of subscribed investors for the issue. Many accredited or high net worth (HNI) investors can view a subscription to a public offering and make orders to purchase soon-to-be issued shares from their brokerage firms. These options are generally not available to retail investors.

The investment bank handling a public offering tries to determine which offering price will result in an optimal number of share subscriptions; too many subscriptions will not impress the issuing company, as it is likely to prefer a higher offering price. Conversely, too few subscriptions might result in the investment bank being unable to sell its entire inventory of the security issue, exposing it to significant losses.

Subscribed Deals and Prospectus Reports

The prospectus for a new offering is a detailed document that potential investors will pore over prior to subscribing to a new issue. The prospectus is a formal legal document that the Securities and Exchange Commission requires. It provides an enormous amount of information about an investment offering for sale to the public, including basic details, such as the name of the company or mutual fund issuing stock, the amount and type of securities being sold, and the number of available shares (for a stock offering).

The prospectus also describes whether an offering is public or a private placement, what the underwriting fees are, and names of the company’s principals. An overview of the company’s financial statements, background of its management, a section where the management describes the company’s current state and future goals for growth (management discussion and analysis), and risks section are also important.

A preliminary prospectus is the first document a security issuer will circulate, which includes many details of the business and transaction in question; the final prospectus, containing finalized background information (i.e. exact number of shares/certificates issued and the precise offering price) will traditionally follow. The final prospectus is printed after the deal has been made effective.

When reading a prospectus it’s important to pay attention to information that is unique to that company (not simply legalese that all public companies incorporate into their filings).


  1. Prospectus

    A prospectus is a document delivered to potential investors that ...
  2. Final Prospectus

    A final prospectus is the final version of a prospectus for a ...
  3. Going Public

    Going public is the process of selling shares that were formerly ...
  4. Unsubscribed

    Newly issued securities that have not seen much interest, or ...
  5. SEC Form S-20

    A filing with the Securities and Exchange Commission (SEC), more ...
  6. Red Herring

    A preliminary prospectus filed by a company with the Securities ...
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