SIE - Securities Industry Essentials Exam
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All of the following are true of the syndicate when bringing a new equity security to the market EXCEPT
They cannot back out of the underwriting agreement during the cooling off period.
A
They take some of the financial burden off of the lead underwriter.
B
They are responsible for selling some of the securities to the public.
C
The can sell their entire allotment of the new issue.
D
Explanations
A syndicate member can back out of the deal during the cooling off period. This usually happens if market conditions turn negative for the new issue. The other 3 answers are true.