Underwriting Group Law and Legal Definition

A group of investment banks which jointly underwrite and distribute a new security offering. The group operates under an agreement among underwriters. Generally, an underwriting group is formed under the direction of an originating investment bank or banker.

All bankers who choose to participate in the group agrees to purchase securities from the issuing corporation at the agreed upon price and to resell them at the stated public offering price. The purpose of the underwriting group is to limit risk and assure successful distribution of the issue. Most underwriting groups operate under a divided syndicate contract, in which a member's liability is limited to their participation.

Underwriting group is also called purchase group or banking syndicate or investment banking syndicate or distributing syndicate or syndicate.