What does it mean to underwrite securities?
Answer #11: Confusion about what it means to be a dealer sometimes is caused by the belief that dealers only underwrite securities, although in general the determination of broker or dealer status under the Exchange Act primarily depends on the broader definitions of ‘purchase’ and ‘sale.’ See Exchange Act Section 3(a)(13) and 3(a)(14) [15 USC 78c(a)(13) and 78c(a)(14)]. As the Commission stated in footnote 21 of Exchange Act Release No 47364 (February 14, 2003): “The term ‘underwriter’ is defined in Section 2(a)(11) of the Securities Act of 1933 [15 USC 77b(a)(11)]. In determining whether a bank is acting as an underwriter when it undertakes particular securities activities, the Commission is not expressing any views on whether those activities would constitute ‘underwriting’ for purposes of Section 16 of the Glass-Steagall Act. The Commission wishes to emphasize that the determination of dealer status with respect to securities transactions, including those that do not involve a publ
