An underwriter is a person or entity that oversees the issuance of a security from a corporation. They would buy securities from the issuing body and then sell them to investors via their distribution network.
For example…
Ian wanted to go public with his technology company. So, he hired an underwriter to help him figure out what type of securities his company should offer and whether an IPO would suit his company better. Then, he works out which investment banks would form part of what’s called a syndicate and these banks commit to sell a certain percentage of the offering. Following this, the underwriter issues a prospectus to describe the securities and then proceeds to market the securities on Ian’s behalf.
