Regal Syndicate

A New Investment Service for Qualified Regal Clients

Equity Syndicate is a new addition to Regal’s diversified mix of products and services. Purchasing Syndicate issues is an investment that can be appealing to both conservative and entrepreneurial clients.

Through established long-term industry relationships and by utilizing expertise in key industry sectors, we are able to deliver Syndicate issues that may be appropriate to your individual needs. Regal’s Syndicate staff has more than thirty years of experience, a deep knowledge of the industry, and extensive institutional relationships. We specialize in initial public and follow-on offerings of primary and secondary shares.

Regal receives invitations to participate in a number of various underwritings however, Regal does not participate in penny stock offerings. All Syndicate products are evaluated via a due diligence process.

What is Syndicate?

Syndicate is the syndication of both initial public offerings and offerings of companies whose securities are already publicly traded (follow on and secondary offerings).

Some of the benefits of Syndicate issues are:

  • No Commissions - Offerings are priced to the client on a net basis without agency commission.
  • Syndicate products may assist in the diversification of a balanced portfolio.
  • Enhanced company exposure in the financial community increases liquidity.
  • Location, newspaper coverage, and quality distribution can help ensure success of an offering and support the stock in the aftermarket.

Qualification Criteria

In order to participate in a new offering, client accounts must meet the following requirements:

  • Liquid equity of at least $15,000.
  • Made at least one trade, other than syndicate, in the account prior to entering an IOI.
  • The account must have been opened at least for 60 days.
  • The account must not be listed as restricted within the meaning of Rule 5130.

The client must complete the FINRA Rule 5130 Representations of Account Holder Form which defines “restricted persons” who are prohibited from participating in syndicate or other new issue offerings. By signing this form the client is representing and warranting that the client is not a restricted person and is eligible to purchase new issues in compliance with Rule 5130.

Type of Deals

While Regal may, from time to time, participate in high profile new-issue equity offerings (IPOs), most of our Syndicate offerings will be in Closed End Funds. Below you will find a description of each type of new offering.

Initial Public Offerings (IPOs)

An Initial Public Offering is a company’s first offering of stock to the public which may be all primary (new), all secondary (already issued and outstanding), or a combination of primary and secondary.

Secondary or Follow-on Offerings

A closed-end fund is an investment company that compiles and manages a portfolio of securities in order to achieve a specific set of investment objectives.

Closed-End Funds

Offerings of companies whose securities are already publicly traded.
Additionally, Closed End Funds:
  • Often trade at a premium or discount to net asset value;
  • Involve no front end load on the offering since the client pays a net price;
  • Have a fixed number of shares so that financial volatility would not necessitate liquidation of the underlying portfolio due to massive redemptions.
  • Many Closed-End Funds pay a monthly dividend that can be higher than current CD and Money Market rates.
The most distinguished risk for Closed-End Funds is “No Prior History” risk. These types of funds are newly organized, non-diversified, closed-end management investment companies with no history of operations and are subject to all of the business risks and uncertainties associated with any new business. Participation in any Closed-End Fund may involve many of the common risks associated with any investment. Therefore each prospectus should be studied in detail with special attention given to the following that are representative of those risk factors – Management, liquidity, valuation, leverage, credit ratings, interest rate, Net Asset Value discount/premium, underlying investments such as Structured Products and derivatives, and inflation/deflation risk among others.


Participation in new issue offerings comes with inherent risks. These risks include, but are not limited to:

  • New issue equities may trade at levels below the offering price. Once the new issue begins trading in the open market, it will be subject to the same forces of supply and demand as other publicly traded entities.
  • Due to your stated Investment Objective you may not be able to participate in all offerings. Each offering will come with a predetermined level of risk. For example, some issues may only be eligible to customers with a stated Investment Objective of Speculation. If your Investment Objective is Growth and Income, you will not be eligible to participate. The designation of each offering will be disclosed prior to the distribution of the Preliminary Prospectus.
  • The possibility exists that you may not receive an allocation of shares if you submit an Indication of Interest (IOI). While Regal will make every effort to obtain shares on your behalf, the allocation process is controlled by the firm managing the offering. If there is high demand for an offering, Regal may not receive any shares requested.

Due Diligence

Regal Securities, Inc. Syndicate account holders must conduct their own thorough due diligence prior to being allowed to submit an Indication of Interest (IOI). Regal Securities also recommends that Syndicate participants consult with their legal and tax advisors before making an investment decision. As an important part of the due diligence process, Syndicate participants must acknowledge they have received, read, and understood the Preliminary Prospectus. While Syndicate transactions are considered solicited, Regal will not recommend that you participate in a specific offering.

Preferred Stock

A security that usually pays a fixed dividend and gives the holder a claim on corporate earnings and assets that is superior to that of holders of common stock. Preferred stock combines certain characteristics of common stock with those of bonds. As such, the investor who wishes to reduce the risks inherent in common stock ownership can achieve a stated rate of return while maintaining equity ownership by investing in preferreds. Key points regarding preferred stocks are:

  • Preferred stock has dividend preference over common stock.
  • Dividends of preferred stock are fixed or provide a stated rate of return. While preferred stock has a stated rate of return like a bond, it does not have a maturity date.

"Restricted Persons"

FINRA rules prohibit "restricted persons" (certain persons associated with the financial services industry) from participating in the purchase of many new issue offerings unless the offering is exempt. Therefore, clients must update this information annually. For more information and to determine whether you qualify to participate in syndicate issues, call 1-800-92-REGAL or click here for more information.

Process & Overview

It is Regal’s objective to deliver quality products and information concerning not only the offerings we manage, but the process itself. There are
various stages in the purchase of Syndicate issues. Our Syndicate FAQs and Glossary of Terms should assist you in understanding the
process from the beginning of the new issue cycle through to the end.

Each offering in which Regal participates will have its own degree of investment risk. Such degree of risk will be communicated to you by the Representative assisting your account.

A preliminary prospectus discloses information on the company’s management, markets, competitors, financial data, etc. The preliminary prospectus (also known as “red herring”) also discloses risk factors, the expected price range and number of shares to be issued. Clients should review the preliminary prospectus prior to entering an indication of interest (IOI).

This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. Any issue or recommendation contained in this report may not be suitable for all investors. The information provided is a subject to change. Participation is at your own risk. If you have questions, please contact a Syndicate specialist at 847-375-6084.  Regal Securities Inc. is a member of FINRA/SIPC and clears through Hilltop Securities, Inc.

Information provided is not a solicitation or an offer to buy any of the provided offerings and might not be appropriate for all investors. The information provided is a subject to change. Participation is at your own risk. If you have questions, please contact or consult with a registered customer service representative at 1-800-92-REGAL.