Underwriting (Firm Commitment)

The process whereby a financial intermediary purchases all or a portion of a security issue from an issuer for eventual distribution to the public. The intermediary (underwriter) makes the total amount or the portion underwritten available to the issuer at the opening of the offer, thus bearing the risk of a possible poor investors' response to the issue. Underwriting is thus a form of insurance which protects an issuer from adverse response to its security issue. (see also best effort underwriting and standby underwriting).

Unit Holder

An investor in a unit trust scheme.

Unit Trust (Mutual Fund)

An open-end investment scheme which pools funds principally from small investors for subsequent investment in securities and other financial instruments. Investors are, in exchange for their funds, issued units which the unit trust manager stands ready to redeem whenever an investor wishes to dispose of his holdings. Similarly, new units are created on demand, hence they are referred to as open-end funds. (same as mutual funds).

Unit Trust Manager

An institution which manages a unit trust scheme for a fee.

Unlisted Securities

Securities that are not listed/quoted on a stock exchange.