Syndicate members prior to cooling off period

This question directed me to the chapter about “preparing for the sale of IPO”.

It doesn’t mention anywhere about what can take place prior to the cooling-off period.

Only that a tombstone can be published during the cooling-off period where names of syndicate members are included.

I got really confused because I didn’t know how to answer this question because this information wasn’t in the chapter.

Was I supposed to know how to deduce the question? just wondering. thanks!

1 Like

Hey Fox, here is some of the relevant info from the Preparing for the sale chapter.

The issuer and underwriter sign a contract

After the contract is signed, the underwriter guides the issuer through the ‘due diligence’ phase.

They fill out and file the SEC’s registration form

The filing of the registration form kicks off the 20 day “cooling off” period

During the 20 day cooling off period, the SEC registration form is transformed into a “preliminary” prospectus, which can be given to potential investors on a solicited or unsolicited basis.

To estimate demand for the IPO, the underwriter may solicit or receive indications of interest from potential investors during the 20 day cooling off period.

So the timeline is:

  1. Create the syndicate and start the due diligence process
  2. Prepare and submit the registration, triggering the cooling-off period
  3. Create the red herring / preliminary prospectus from the registration
  4. Distribute materials containing facts about the new issue and take indications of interest
  5. Wait until the period is over to advertise or make sales

The only choice that happens before the cooling-off period is creating the underwriting syndicate.

1 Like

Ah ok!

I didn’t know that. It wasn’t laid out clearly in the chapter. Hope you guys can add that list to the chapter. That would probably be made more clear.

Thanks again, Justin! :slight_smile:

1 Like