While Initial Public Offerings can provide very high returns, please keep in mind that they involve potential risks that may not be appropriate for all investors. Preferred Securities makes certain investments available to it’s customers but does not recommend or endorse any particular investment. 

As with any investment you make through Preferred Securities, you must first determine whether a new or secondary issue equity security is consistent with your investment objectives and risk tolerance.

Companies need to raise capital to support current operations, to expand or to explore new business opportunities. An initial public offering (IPO) of stock is often the method used to raise a these substantial amounts of cash to implement the company's growth planning.  After an IPO has been filed, a company may still find the need to raise additional cash and may choose to have a public offering. A Secondary (also know as follow-on) offering is simply a public offering of new issue equity securities by a publicly traded company.

Underwriters, such as investment banks, are hired by companies to assist them in issuing new stock to the public. Underwriters play a crucial role in this process.

First, underwriters provide the company with procedural and financial advice. Next, they buy the issue. Finally, they resell it to the public. An underwriter's "value-added" is its ability to gauge the public's receptivity to the new IPO and to price and place those shares in a prudent manner.

Traditionally, Public Offering shares have been distributed to institutional clients, Preferred Securities is a one of the leaders in allowing individual investors access to Public Offerings.

The Securities and Exchange Commission (the SEC) requires that companies file a registration statement with the SEC before they issue public offering shares. This is done to protect investors. This registration statement contains detailed information about the issuing company and it’s business. The SEC will review the registration statement and an accompanying prospectus to ensure that they conform to certain legal requirements. Once the SEC has reviewed these documents, the issue can be cleared for sale (The SEC will neither approve nor disapprove an issue, nor will it guarantee the accuracy of disclosures, it will only clear it for sale). Only when the issue has been cleared for sale (when registration has become "effective") can the shares be priced and firm orders for them be accepted.

During the pre-effective period, when the registration has been filed with the SEC but the issue has not yet been cleared for sale, interested parties can be provided with the preliminary prospectus. The preliminary prospectus contains detailed information about the offering company, the estimated date of issue and the estimated price range of the issue. During this time interested parties can place indications of interest for the offering. An indication of interest isn’t a firm commitment to buy at this stage. Only when registration becomes effective and the issue is priced can firm orders be accepted.

The time between when the issue is cleared for sale, priced and when it begins trading in the secondary market is typically quite short. To ensure that all customers who wish to participate are able to enter orders, Preferred Securities will gather all current indications on our records at the time of pricing and convert them into firm orders for participation on a "when and if" basis; when the issue is cleared for sale and if the offering’s price is at or less than the limit price indicated.

Accepting indications on a when and if basis has been implemented to accommodate customers that cannot be reached during the brief window between pricing and secondary trading. Therefore, when placing your indication of interest please remember that all open indications that are at or below the offering price will become firm orders for participation. All indications can be changed or canceled at any time prior to the time of pricing.

To determine if you meet the specific guidelines, please complete the online Customer Profile for each account. Eligibility will be based on responses to your Customer Profile regarding your investment objectives, financial background, and possible affiliations with the issuing company or with a brokerage or banking institution. If your Customer Profile has been judged ineligible it is because of your responses in one of these areas. To protect the integrity of the approval process we are unable to be more specific about individual profiles.

Because the 'Customer Profile' step for participation must be completed on a per issue basis, it is available only when there are specific offerings available.

It depends. If you have more than one account at Preferred Securities, you can select another account to participate in the public offering and submit an eligibility profile for that account. The reason for this is that you may be a registered owner of several Preferred Securities accounts with different financial objectives. As a result, if a profile is judged unsuitable for participation, we only restrict that particular account from participating, rather than all of your accounts. However, this only applies if you have multiple accounts with different registrations with Preferred Securities. If you have a single account with Preferred Securities, then you cannot submit another profile for the same offering or make changes to the profile once you are restricted from participating.

Public offerings are considered speculative investments and can be extremely volatile. For that reason they are highly regulated. Only U.S. -resident Preferred Securities customers with access to the Web are eligible to participate in public offerings.

To invest in public offerings, interested participants must submit a Customer Profile. This profile helps Preferred Securities determine suitability for a new offering in accordance with SEC guidelines. You will be notified online immediately of your eligibility to participate in each particular offering as soon as you submit the completed profile. After passing eligibility you can review the preliminary prospectus online. Once you acknowledge having read the preliminary prospectus you can place an indication of interest in the issue. This indication provides Preferred Securities with information about the maximum number of shares you are interested in purchasing and the maximum price you are willing to pay for these. You can change or cancel this indication at any time up to the time the issue is priced. At the time of pricing Preferred Securities will convert all current indications in our records into firm orders to participate, subject to the issue being priced within your specified price parameters. Allocation of shares to individual accounts depends upon the number of firm orders received.

No. Once the issue is priced and your order becomes a Firm Order, it is regarded as a final buy order and cannot be changed or canceled.

No. Shares in a public offering must be purchased with cash available in your account. You will need to have sufficient cash available to cover your Firm Order. Otherwise, your order may not be filled entirely, if at all.

Preferred Securities’s goal is to allocate shares evenly amongst all interested participants. For this reason the process takes place in rounds; in the first round, we allocate 100 shares to each order submitted in the sequence indications of interest were entered. In the second round, we allocate another 100 shares to each order greater than 100 shares. This process is repeated until all orders are filled or until we run out of shares to allocate, whichever occurs first.

Preferred Securities will always post the expected offering dates on our site based on the most current information available. However, please be aware that these dates are estimates and can in no way be guaranteed. Preferred Securities will make our best efforts to keep all customers up to date in all pricing developments.

The estimated pricing range posted is based on the information provided in the preliminary prospectus. This is subject to change and the issue may be offered above or below this range.

Public Offering shares are usually allocated on the night before the issue begins to trade publicly. When this is the case you will receive a message reporting your allocation, and your Portfolio Summary and Transactions will reflect the allotment.

Once you receive notification of your allocation and the offering begins to trade in the secondary market, i.e. on an exchange, you can sell your allocated shares. However, one of the most important goals of the underwriting syndicate is to try to ensure a degree of price stability for new issues. For that reason Preferred Securities would prefer that customers hold their allocated shares for at least 30 days. Preferred Securities will not in any way impede the sale of shares within this time, but customers with a record of short holding periods may be excluded from future offerings.