Sale in the open market

Placement procedure in which the issuer sells the securities without the help of a bank.

A sale in the open market is often synonymous with a direct offering, and is a procedure used primarily by tap issuers. However, a syndicate bank may attempt to sell securities in the open market if an issue is not fully subscribed. The price of the securities is continually updated to reflect the market situation.

Prior to the placement of the securities, the issuer must publish an offering prospectus that indicates the first day of sale, as well as a non-binding placement price. There is no subscription period.

A private placement, in which securities are sold to large-scale institutional investors, is a special type of sale in the open market.

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