Marked and Unmarked Applications

When the issue of shares or debentures of a company is underwritten by two or more persons, it is usual that the applications for shares or debentures sent through the underwriters should bear a stamp of the respective underwriters. Otherwise, it would be very difficult for the company to determine how many applications have been received through a particular underwriter and, unless this is determined properly, the company would face a problem in determining the liability of the individual underwriters. Thus, the applications bearing the stamp of the respective underwriters are called “Marked Applications” while the applications received directly by the company which do not bear any stamp of the underwriters are called “Unmarked Applications”.

If the entire issue of shares or debentures is underwritten by only one underwriter, the marking of applications is immaterial since he is to get credit of all the applications whether sent through him or received directly in determining his liability. But, the issue of shares or debentures is, generally, underwritten by more than one underwriter as the risk is distributed among the underwriters in an agreed ratio. In such a case, it is essential that the applications sent through the underwriters should be marked properly so as to determine their respective liability correctly.