A market that deals with would-be-issued (when-issued) securities, for which transactions would be settled if and when the security is actually issued. This market facilitates the distribution of government securities by extending the actual distribution period of an issue, and as such allows the market additional time to absorb large issues smoothly. It also helps reduce uncertainties and the lack of information associated with auctions. In other words, this market allows the release of information that may influence investors’ bidding strategies and thus the prices at which the securities are traded.

Some countries, like the United States, prohibit trading securities through this market if that takes place before the IPO process, on the grounds that covering of short sales is restricted (short sales could result in a lower offering price and reduce an issuer’s proceeds).