Subscription refers to the process of investors signing up and committing to invest in a financial instrument, before the actual closing of the purchase.
An early form of subscription was praenumeration, a common business practice in the 18th-century book trade in Germany.
The publisher offered to sell a book that was planned but had not yet been printed, usually at a discount, so as to cover their costs in advance.
At the end of this subscription period, the issuer announces the offering price and the method of allotment.
In such cases, the underwriting bank allots the securities with the approval of the issuer, either by lottery or on the basis of a formula.