An SEC rule that limits the use of pre-syndicate bids. A pre-syndicate bid is an order by a managing underwriter to buy or sell a security immediately before a secondary offering of the same security in order to stabilize the price of the security. Theoretically, this will make the secondary offering easier to place with investors. However, the rule only allows this under certain circumstances.
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An SEC rule that limits the use of stabilizing bids by underwriters of a new security issue.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.