Offering materials furnished to underwriters: Overview, definition, and example
What is offering materials furnished to underwriters?
Offering materials furnished to underwriters refers to the documents and information a company provides to underwriters when preparing to sell securities (like stocks or bonds) to the public or private investors. These materials typically include the prospectus, financial statements, business overviews, legal disclosures, and risk factors.
In plain terms, it’s the information package given to the underwriters so they can properly assess, price, and market the offering.
Why is offering materials furnished to underwriters important?
Underwriters—usually investment banks or financial firms—are responsible for helping a company bring its securities to market. To do their job, they need full, accurate, and timely information about the company and the offering. That’s where offering materials come in.
If these materials are incomplete or misleading, it can create legal risk—not just for the company, but also for the underwriters and investors. This clause typically appears in underwriting agreements to clarify what’s been provided, who is responsible for it, and how it can be used.
It protects both sides: underwriters get the data they need, and the company sets limits on liability for how the information is used.
Understanding offering materials furnished to underwriters through an example
Let’s say your tech startup is going public, and you’re working with an investment bank as your underwriter. You give them a prospectus that includes your financials, risk factors, and a business summary. These documents are your offering materials.
The underwriter uses that information to market your IPO to investors. If a lawsuit is later filed claiming that the offering documents were misleading, the clause related to offering materials furnished to underwriters helps determine who is responsible for what, and whether the underwriter relied on the company’s representations.
An example of an offering materials furnished to underwriters clause
Here’s how this clause might appear in an underwriting agreement:
“The Company represents and warrants that all offering materials furnished to the Underwriters, including the Preliminary Prospectus, the Prospectus, and any supplemental materials, are true, complete, and do not contain any untrue statement of a material fact or omit to state any material fact required to make the statements not misleading.”
Conclusion
Offering materials furnished to underwriters play a key role in securities offerings. They ensure that the underwriters have what they need to evaluate the deal and market it responsibly to investors.
For any business raising capital through public or private offerings, it’s critical to prepare accurate, complete offering materials—and to understand how they’re used and shared. Getting this right helps protect your company from legal exposure and builds trust in the offering process.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.