Business Glossary

part of an appropriation that may be encumbered or expended during an allotment period, which is usually less than one fiscal year. Bimonthly and quarterly allotment periods are most common.

amount of securities assigned to each of the participants in an investment banking syndicate formed to underwrite and distribute a new issue, called subscribers or allottees. The financial responsibilities of the subscribers are set forth in an allotment notice, which is prepared by the syndicate manager .

allocation, or share, usually of securities in an underwriting of new issues. Also, a method of filling bids in U.S. Treasury security auctions. In corporate securities, the most common usage occurs in syndicated underwriting where members of the syndicate subscribe to underwrite and distribute a certain number of shares. If the issue is over-subscribed, a portion of the entire issue is assigned to each participant. Formal notice is given in an allotment notice. In a ratable allotment, for example, if 20 million subscriptions are received for a new issue of only 10 million shares, a participant in the underwriting syndicate who subscribed to 5 million shares would receive an allotment of 2.5 million shares to offer for sale.