Set-Aside

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Set-aside

A percentage of a municipal or corporate bond underwriting that is allocated for handling by a minority-owned broker/dealer firm.

Set-Aside

The portion of a contract that is guaranteed to go to a minority owned company. For example, suppose a city wishes to contract out its trash collection services to a number of privately-owned companies. It may declare that 20% of the total value of the contract must go to one or more companies owned by a member of a minority group. While this is intended to reduce corruption in (especially local) governments, critics allege that this practice is, itself, subject to abuse. See also: Affirmative action.

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Set-Aside