DEFINITION of Greensheet
A greensheet is a document prepared by an underwriter to summarize the main components of a new issue or initial public offering (IPO). A greensheet is an internal marketing document that is compiled by a new issue’s underwriter and intended for distribution to brokers and institutional sales desks of the underwriting firm.
The purpose of a greensheet is to prepare salespeople to effectively market a new issue to the public and to determine which clients may be interested in becoming large volume buyers of the new issue. Greensheets provide only an introduction to a new security issue and are not intended to be comprehensive in nature.
BREAKING DOWN Greensheet
A greensheet, by law, contains only information that would appear in the issue’s prospectus. Greensheets are intended for public distribution. A greensheet’s disclosure explains the purpose of the document, the restrictions on its distribution, the limitations on the information it contains, and a statement that specifies that the information is not a solicitation of securities.