Purchase and sale


Also found in: Acronyms.

Purchase and sale

A method of securities distribution in which a firm purchases securities from the issuer for its own account at a stated price and then resells them, as contrasted with a best-efforts sale.

Purchase and Sale

A method of underwriting in which an underwriter buys an issue for his/her own account and then attempts to sell the issue to other investors. If the underwriter is unsuccessful in placing the issue, he/she keeps what remains. It contrasts with various other forms of underwriting, notably best-efforts sale, in which the underwriter returns the remaining issue to the issuer. The Bank of Canada uses a form of the purchase and sale method, known as a Purchase and Resale Agreement, when selling its treasury securities. It is also called an underwritten offering.
References in classic literature ?
Theodore Roosevelt, President of the United States a few years prior to this time, made the following public declaration: "A more liberal and extensive reciprocity in the purchase and sale of commodities is necessary, so that the overproduction of the United States can be satisfactorily disposed of to foreign countries.