What is a green sheet?
This is a document put together by an underwriter when it is placing a new issue with investors. It is usually a summary of the prospectus with some brief comments on its advantages and disadvantages.
Where have you heard about green sheets?
They're used when marketing a new issue or initial public offering to prospective investors. The documents aren't handed out to investors and are only meant to be used by the employees of the underwriting firm.
What you need to know about green sheets.
A green sheet is much shorter than a prospectus, because it only describes the basic terms of the offering that are most important to a registered representative. These might include investment merits and risks, as well as initial pricing. This means it's only a few pages long. The registered representative can then use the material to decide whether they want to offer the issue to their clients, or they can choose to read the full prospectus if they feel it's necessary.
Find out more about green sheets.
Building a green sheet is an important part of investment banking. Check out our guide to find out more.