Stabilization Bids (Regulation M & FINRA 5190)

There are a number of rules that apply to stabilization bids. Here are a few:

• Only one underwriter can stabilize. This is usually the syndicate manager.
• Only one stabilization bid is permitted, but it can remain outstanding indefinitely.
• The underwriter who enters a stabilization bid must notify the appropriate exchange prior to entry of the bid.
• Any underwriter executing syndicate covering transactions or penalty bids must also notify FINRA before and after it does so.