Selling Concession

Discount at which securities in a New Issue offering (or a Secondary Distribution) are allocated to the members of a Selling Group by the underwriters. Since the selling group cannot sell to the public at a price higher than the Public Offering Price, its compensation comes out of the difference between the price paid to the issuer by the underwriters and the public offering price, called the Spread. The selling group's portion, called the Concession, is normally one half or more of the gross spread, expressed as a discount off the public offering price. See also Flotation Cost; Underwrite; Underwriting Spread.