best-efforts basis

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Best-Efforts Basis

An agreement between an underwriter and an issuer in which the underwriter agrees to place as much of an offering with investors as possible, but is not responsible for any portion of the offering it fails to sell. For example, suppose an issuer makes a new issue of 100,000 shares. The issuer may make a best effort basis agreement with an underwriting firm for the underwriter to sell those shares to investors. If the underwriting firm only sells 90,000, however, it is not required to buy the remaining 10,000 from the issuer. This reduces the risk to the underwriter; to reduce the risk to the issuer, most best efforts are all-or-none offerings.

best-efforts basis

1. An agreement by an investment banker to do its best to oversee but not guarantee the sale of a security issue in the primary market. See also underwriter.
2. An investor's market order to buy or sell a security in which the brokerage firm agrees to obtain the best possible price.
References in periodicals archive ?
The financing and the merger will be coordinated by IBK Capital, on a best effort basis.
to appoint them as an exclusive placement agent, on a best effort basis, to complete an equity financing.
In addition, the Agent will arrange, on a best effort basis, for the private secondary sale by two existing shareholders of the Corporation of up to 1.
Sales are made on a best effort basis by non-exclusive distributors.
Oliver to act as financial advisor and exclusive agent to raise on a best effort basis between $0.
Canaccord in its role as agent has agreed to sell, on a best effort basis, 6,000,000 Special Warrants of MCML to raise gross proceeds of $2,000,000, each Special Warrant will entitle the holder to receive one common share of MCML and one-half of one common share purchase warrant.
McDermid will market, on a best effort basis, a minimum of 1,300,000 special warrants and a maximum of 1,529,412 special warrants at a price of $0.