Over-subscription (excess application)

When securities are issued, the total amount subscribed exceeds the total amount offered by the issuer (a situation where there is more demand from investors than securities offered by the issuer); this usually results in a limited allotment (an allotment: any method of distributing securities to investors when an issue has been oversubscribed). – In Germany, the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) requires that transparent methods be used for the allocation of oversubscribed new issues, such as lot procedures, allocation according to order size, allocation based on a certain quota or allocation after receipt of the purchase offer; the authority monitors these procedures. – See order delay, issuance, oversubscribed, majorization, securities allocation information, subscription.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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