Selling Group (Underwriting) Law and Legal Definition

Selling group is a collection of investment bankers who participate in the distribution of new issues to potential investors. They help an underwriting syndicate distribute securities of a public offering but are not responsible for any unsold securities. These dealers do not assume financial responsibility for the underwriting of the issue. They are involved in selling or marketing a new issue of debt or equity but not necessarily participating in the underwriting consortium. The selling group is governed by the selling group agreement. It sets forth the terms of the relationship, establishes the commission or selling concession and provides for the termination of the group, usually in 30 days.