What is a Distributing Syndicate?
A distributing syndicate is a collection of investment banks that band together for the purpose of underwriting and acting as the distributor for a new offering of a given security. Sometime referred to as an underwriting group or investment banking syndicate, the member banks who are part of a distributing syndicate are able to pool resources in order to accomplish the distribution to maximum effect. At the same time, the banks involved in the syndicate share the potential risk associated with underwriting and distributing a new security offering. The creation of a distribution syndicate has several advantages, even for smaller banking institutions. By joining with other banks that are primarily located in other parts of the country or the world, the smaller banks establish a network for distribution that they would never be able to create on their own. Since each of the member banks brings contacts into the network that are unique, the ability to distribute the new security to a wide
