acceptance of risk in return for payment. In a new securities issue, the underwriter, known as the INVESTMENT BANKER and his or her syndicate, may perform an underwriting function by purchasing the securities at a fixed price from the issuer, hoping to sell them at a higher offering price and making a profit on the spread. Underwriting is the function of investment bankers, who usually form an underwriting group, also called a SYNDICATE, to pool the risk and assure successful distribution of the issue.