Series 79 practice questionmediumIPO Process
If an IPO is oversubscribed, which of the following is primarily responsible for determining final share allocations to investors?
- AThe SEC
- BThe issuer’s board of directors
- CThe lead underwriter’s allocation committee✓ Correct answer
- DThe exchange’s allocation panel
Explanation
Why C — The lead underwriter’s allocation committee
The lead underwriter’s allocation committee determines how shares are distributed in an oversubscribed IPO. The SEC and exchanges do not decide allocations, and while the issuer may provide input, the underwriter leads the process.
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