The public offering process of a company includes several important and delicate steps that protect the company and potential investors.
During the IPO process, many aspects of the company will be reviewed, prepared and presented to the US Securities and Exchange Commission (SEC) as part of the draft prospectus. This document will be modified and expanded during the review process.
The initial investment bank selected by the company will bring together a syndicate of other banks before presenting a road show to potential investors.
The final SEC-approved prospectus is sent to an experienced financial printer familiar with SEC rules for printing.
The offer price depends on several factors and is determined by the investment banker the day before the entry into force of the registration.
A red herring is a preliminary prospectus filed with the SEC, usually in connection with an IPO, that omits key details of the issue, such as the price and number of shares offered.
In an undivided or eastern account, each underwriter takes responsibility for the sale of any shares that remain unsold by the other members of the syndicate.
A Western account is a type of AAU in which the parties to a consortium of underwriters agree to be responsible only for their own allocation of a new issue of securities.
The Depository Trust and Clearing Corporation (DTCC) is a financial services company that provides clearing and settlement services for financial markets.
An Export Trading Company (ETC) deals with exports for clients, focusing on all legal requirements and regulations that a company must follow before a country will allow its goods to be exported.