Principal Underwriter

Definition

Principal Underwriter. Principal underwriter of or for any investment company other than a closed-end company, or of any security issued by such a company, means any underwriter who as principal purchases from such company, or pursuant to contract has the right (whether absolute or conditional) from time to time to purchase from such company, any such security for distribution, or who as agent for such company sells or has the right to sell any such security to a dealer or to the public or both, but does not include a dealer who purchases from such company through a principal underwriter acting as agent for such company.

Principal underwriter of or for a closed-end company or any issuer which is not an investment company, or of any security issued by such a company or issuer, means any underwriter who, in connection with a primary distribution of securities,

1. is in privity of contract with the issuer or an affiliated person of the issuer;
2. acting alone or in concert with one or more other persons, initiates or directs the formation of an underwriting syndicate; or
3. is allowed a rate of gross commission, spread, or other profit greater than the rate allowed another underwriter participating in the distribution.

See Also

• Section 3a of the Investment Company Act of 1940 as amended in January, 2012, https://www.sec.gov/about/laws/ica40.pdf

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.