1. Securities consignment: refers to the underwriting method in which the underwriter sells the securities on behalf of the issuer and returns all the unsold securities to the issuer after the sales period ends.
2. Securities sales assistance: refers to the underwriter's contribution to purchase the remaining securities after the agreed underwriting period according to the underwriting contract, or lending them to the issuer according to the remaining amount, so as to ensure the smooth implementation of the issuer's fund raising and fund utilization plan.
3. Securities underwriting: refers to an underwriting method in which the underwriter buys all the securities to be issued with his own funds and then sells them to the public. When the underwriting expires, the unsold part is still held by the underwriter himself.
4. Underwriting by an underwriting syndicate: refers to the underwriting method in which two or more securities underwriters accept the entrustment of the issuer and sell a certain securities to the public. An underwriting institution temporarily composed of two or more underwriters is called an underwriting syndicate.
Securities underwriting refers to the behavior that an issuer entrusts a securities operation institution to sell securities to the public. When an issuer publicly issues securities to an unspecified object, it shall be underwritten by a securities company according to law. Securities underwriting business adopts the mode of consignment or underwriting. Securities underwriting is the behavior of securities institutions issuing securities on behalf of securities issuers. It is one of the most basic business activities of securities institutions.
Securities company bond underwriting process:
1. Obtain bond underwriting business.
There are generally two ways for investment banks to obtain bond underwriting business. First contact the issuer directly to understand and study its requirements and ideas, and then submit a proposal on the bond issuance plan to the issuer. If the bond issuer thinks that the investment bank's proposal is acceptable, it will sign a bond issuance contract with the investment bank, and the investment bank, as the lead underwriter, will immediately form an underwriting syndicate.
Another way is to participate in bidding. In order to reduce the cost of bond issuance and obtain the optimal issuance plan, many bond issuers often choose the lead underwriter through bidding. Investment banks can participate in bidding alone, but generally they will form a bidding group before other investment banks to strengthen their own strength. After the winning group signed the bond issuance contract with the issuer, it immediately began to form an underwriting syndicate.
2. Form an underwriting syndicate
There is a big difference between bond underwriting syndicate and stock underwriting syndicate. The members of a syndicate are not necessarily composed of investment banks or investment banking departments in universal banks. This is because many countries that restrict commercial banks from participating in investment banking have relaxed their restrictions on commercial banks' participation in underwriting and distribution of bonds, especially national debt.
3. Implement distribution
After the underwriter's syndicate is formed and the responsibilities of each member in the syndicate are determined, it enters the bond issuance stage. Strictly speaking, there is not much difference between issuing bonds and issuing stocks.
legal ground
securities laws
Article 28 When underwriting securities, a securities company shall sign an agreement with the issuer on consignment or exclusive sale, which shall specify the following items:
(1) The name, domicile and legal representative of the party concerned;
(2) The type, quantity, amount and issue price of the securities to be sold on a commission or exclusive basis.
(3) The time limit, starting and ending dates of consignment and exclusive sales;
(four) the method and date of payment for consignment and exclusive sale;
(five) the expenses and settlement methods of consignment and underwriting;
(6) Liability for breach of contract;
(seven) other matters stipulated by the the State Council securities regulatory authority.
Article 29 When underwriting securities, a securities company shall verify the authenticity, accuracy and completeness of the public offering documents. If false records, misleading statements or major omissions are found, sales activities shall not be carried out; If it has been sold, it must immediately stop the sales activities and take corrective measures.
When underwriting securities, a securities company shall not commit the following acts:
(a) false or misleading investors advertising or other promotional activities;
(2) soliciting underwriting business by means of unfair competition;
(three) other acts in violation of the provisions of securities underwriting business.
If a securities company commits the acts listed in the preceding paragraph and causes losses to other securities underwriting institutions or investors, it shall be liable for compensation according to law.