A municipal dealer places an order for $100,000 of new issue G. O. bonds, M '45 with the syndicate manager. The bonds will be placed in an "accumulation account" for a unit investment trust being established by the syndicate member. The priority accorded to the order by the manager will be:

Question

Willow Norris

Business

27 July, 09:27

A municipal dealer places an order for $100,000 of new issue G. O. bonds, M '45 with the syndicate manager. The bonds will be placed in an "accumulation account" for a unit investment trust being established by the syndicate member. The priority accorded to the order by the manager will be:

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Answers (1)

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Sidney Hickman · Answer 1

The options for the question is:

A. pre-sale net

B. syndicate group net

C. designated net

D. member takedown

Explanation:

The answer is D. member takedown

The priority accorded to the order by the manager will be treated as member takedown orders, and if there is sufficient interest in the issue, the order would not be filled because of the other orders with higher priority being filled first.

When an order is placed with the syndicate by a member for an "accumulation account" that is being managed by that member, it is strange in that the bonds are not being sold to the general public.

The syndicate member must disclose to the manager when the order is placed; the manager will then disclose any of these orders that have been filled to the other syndicate members when the account is closed; and the manager will fill these orders last - meaning they get priority after pre-sales, group, and designated orders.