stock certificate. An instrument evidencing ownership of shares of stock. — Also termed certificate of stock; share certificate. [Cases: Corporations 94. C.J.S. Corporations § 172.] face-amount certificate. 1. A certificate, investment contract, or other security representing an obligation by its issuer to pay a stated or determinable sum, at a fixed or determinable date or […]
A letter of credit in which the issuer’s engagement runs to drawers and indorsers under a standard negotiation clause.
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sweetener. 1. An inducement offered to a brokerage firm to enter into an underwriting arrangement with an issuer. 2. A special stock feature (such as convertibility) that enhances the stock’s marketability.
A share or other interest in property or an enterprise, or an obligation of the issuer that is not represented by an instrument but is registered on the issuer’s books. UCC § 8-102(a)(18). • This term was called uncertified security in earlier versions of the UCC. — Also termed (in BrE) dematerialized security.
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The buying and selling of securities in the market between members of the public, involving neither the issuer nor the underwriter of the securities.
shingle theory. Securities. The notion that a broker-dealer must be held to a high standard of conduct because by engaging in the securities business (“hanging out a shingle”), the broker-dealer implicitly represents to the world that the conduct of all its employees will be fair and meet professional norms. [Cases: Securities Regulation 27.21, 60.32(1). C.J.S.
A letter of credit that is duly honored by the issuer accepting drafts drawn under it. — Also termed acceptance credit; usance credit.
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A bond to reimburse the holder for any actual or claimed loss caused by the issuer’s or some other person’s conduct. [Cases: Indemnity 28.]
Underwriting in which an investment banker agrees to direct, but not guarantee, the public sale of the issuer’s securities. • The underwriter, or selling group, sells the securities as agent for the issuer, and any unsold securities are never issued.
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