问答题
(a) explain the term underwriting with best efforts for an initial public offer of securities; (2 marks)
【正确答案】In accordance with Article 28 of the Securities Law, underwriting with best efforts for an initial public offer of securities refers to the way whereby the securities company (underwriter) sells securities as the agent of the issuer and, as the underwriting period expires, returns to the issuer all the securities that remain unsold.
【答案解析】
问答题
(b) explain the term underwriting with fi rm commitment for an initial public offer of securities; (2 marks)
【正确答案】In accordance with Article 28 of the Securities Law, underwriting with fi rm commitment for an initial public offer of securities refers to the way whereby the securities company (underwriter) purchases, pursuant to an agreement, all the securities to be issued by the issuer or whereby it purchases, as the underwriting period expires, all the securities that remain unsold.
【答案解析】
问答题
(c) state the time limit and a specifi c obligation regarding securities for a securities company to underwrite securities by way of underwriting with best efforts; (2 marks)
【正确答案】In accordance with Article 33 of the Securities Law, the period for underwriting with best efforts shall be no more than 90 days. During the period for securities underwriting with best effort, a securities company shall ensure that such securities are fi rst sold to subscribers. It shall not reserve, in advance, any securities for itself as an agent.
【答案解析】
问答题
(d) explain the situation in which the underwriting with best efforts shall be deemed as a failure, and explain the statutory obligations of the issuer. (4 marks)
【正确答案】In accordance with Article 35 of the Securities Law, where the securities are underwritten in a form of underwriting with best efforts and at the expiry of the period for underwriting, it shall be a failure in issuance if the number of securities sold to the investors is under 70% of the quantity of the securities intended to be issued publicly. Under such circumstances the issuer shall refund to the subscribers the money at the issuing price plus a bank deposit interest for the same period.