There are different types of subcontracting agreements: the firm commitment agreement, the agreement on the best efforts, the mini-maxi-agreement, the whole or no agreement and the standby agreement. In an agreement to assess the best efforts, insurers do their best to sell all the securities offered by the issuer, but the insurer is not required to purchase the securities on their own behalf. The lower the demand for a problem, the more likely it is to occur the better. All shares or bonds that, to the best of their knowledge and share, have not been sold are returned to the issuer. An insurance agreement is a contract between a group of investment bankers forming an insurance group or consortium and the company issuing a new securities issue. A best-effort subcontracting agreement is mainly used for the sale of high-risk securities. A standby stop agreement is used in combination with an offer of pre-emption rights. All standby stops are made on a fixed commitment basis. The standby underwriter agrees to buy shares that current shareholders do not buy. The standby underwriter will then sell the titles to the public. In a firm letter of commitment, the insurer guarantees the acquisition of all securities put up for sale by the issuer, whether or not they can sell them to investors. This is the most desirable agreement because it guarantees all the money from the issuer immediately.
The stronger the supply, the more likely it is to be on a firm commitment basis. In a firm commitment, the underwriter puts his own money at stake if he cannot sell the securities to investors. The purpose of the implementation agreement is to ensure that all stakeholders understand their responsibilities in the process, which minimizes potential conflicts. The underwriting contract is also called a subcontract. The name, address and telephone number of the Bond Underwriter and the obligation number are listed in all obligations submitted to the Commission. In the event of an acquisition or repurchase, the issuer must receive the proceeds from the sale of all securities. Investor funds are held in trust until all securities are sold. If all securities are sold, the product is unlocked to the issuer. If all securities are not sold, the issue will be cancelled and the investors` funds returned to them. The insurance agreement may be considered a contract between a limited company issuing a new issue of securities and the insurance group that agrees to buy and resell the issue profitably.