9.4. Settlement of Syndicate Accounts

The date on which all securities are delivered to the underwriter is called the syndicate settlement date. The syndicate members then fill their orders, receive payment from the purchasers, and deliver their receipts to the lead underwriter. Syndicate accounts must be closed, and all syndicate members paid in full, within 90 days after the syndicate settlement date. This closing date is called the final settlement date. For debt offerings, there is an additional requirement that syndicate members receive 70% of what they are due within 30 days after the syndicate settlement date.

On or before the final settlement date, the syndicate manager must distribute an itemized statement of syndicate expenses to each member of the selling syndicate. The statement must include (where applicable) the following categories of expenses:

• Legal fees

• Advertising

• Travel and entertainment

• Closing expenses