Secondary Distribution

Secondary Distribution Offer to the public by financial institutions, of shares bought by them on a favoured basis. When the public sector undertakings partly disinvested their holdings in April 1992, these were offered to financial institutions and banks on a BID and ASKED basis. When these shares are offered in the secondary market, secondary distribution takes place. Also called secondary offering. Also, it is a method adopted by specialist institutional brokers to sell a large block of shares unloaded by a financial institution, for example, a mutual fund. The brokerage firm puts together a selling syndicate comprising other brokerage or firms to sell a particular block of shares, usually to smaller institutions or individuals. The shares are priced after the close of the market and cannot exceed the closing price of the day. See CROSSING.

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