TAKING THE SECURITIES INDUSTRY ESSENTIALS EXAM? STUDY AND LEARN THE ROLE OF PARTICIPANTS IN UNDERWRITING NEW ISSUES

The Securities Industry Essentials exam asks questions on many different topics pertaining to the securities business. One such topic is the offering of new issues of stocks and bonds to the general public. These new offerings raise capital for the issuing companies which allows them to pursue new ventures or increase the size of their present businesses.

FINRA's Content Outline for the SIE exam covers new offerings in paragraph 1.4. If you plan to sit for the SIE exam, do not neglect studying this section on underwriting before you go and take the test.

Paragraph 1.4 of the Content Outline discusses the roles of participants in new offerings, such as investment bankers, underwriting syndicates, and municipal advisers. You should know and understand what each of these participants do.

Bob Eder's book, Study for the Securities Industry Essentials (SIE) Exam, covers this subject in detail. For example, here is a paragraph from Bob Eder's SIE book:

"Underwriting Syndicates (1.4)

When an investment bank assist a company to offer its shares, it usually purchases all the shares from the company, then turns around and tries to sell those shares to the public, earning for itself an underwriting fee on each share. Sometimes, the company's offering is too large for just one investment bank. In such a case, the investment bank will group together a number of investment banks to split up and divide the offering among them, so that the risk is divided up among the participating investment banks."

Please note that the above paragraph heading indicates the section of FINRA's Content Outline that refers to "underwriting syndicates," i.e., 1.4. This reference tells the reader that the material discussed is important to know for the SIE exam, and that it is not haphazardly thrown in to be filler.

Here is the link to FINRA's Content Outline for the SIE exam. See the references to underwriting participants under section 1.4 of FINRA's Content Outline.

Study for the Securities Industry Essentials (SIE) Exam is available from Amazon in both paperback and Kindle e-book versions. 

Here is the link to Bob Eder's book on Amazon.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law in 2001. See Bob Eder's Author Page on Amazon.com.

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