SIE (Securities Industry Essentials) Practice Exam

What is the primary purpose of a syndicate desk in the context of an equity offering?

1. Build an order book and allocate the stock

2. Advise companies on mergers and acquisitions

3. Ensuring compliance with financial regulations

4. Analyzing market trends for stock valuation

The correct answer is: Build an order book and allocate the stock

A syndicate desk in the context of an equity offering is responsible for organizing and managing the distribution of shares to potential buyers. This involves building an order book, which is a record of all the interest expressed in purchasing the stock. The purpose of this is to ensure a fair and efficient allocation of shares, so that all interested parties have the opportunity to participate. Option B is incorrect because advising on mergers and acquisitions is a separate function from an equity offering. Option C is incorrect because compliance with financial regulations is typically handled by a separate team, such as a legal or compliance department. Option D is incorrect because while analyzing market trends can be helpful in setting the offering price for a stock, it is not the primary purpose of a syndicate desk.