Placement

AAA

DEFINITION of 'Placement'

The sale of securities to a small number of private investors instead of to the general investing public. A placement is exempt from registration with the Securities and Exchange Commission under Regulation D, as are U.S. government and federal agency issues, municipal and state issues, insurance policies, fixed annuities, and small public offerings. Because of this exemption, a placement can be a simpler and less expensive way for a company to raise capital than a public offering.

INVESTOPEDIA EXPLAINS'Placement'

Unlike with a public offering, a formal prospectus does not have to be provided for a private placement, though the information that would be contained in a prospectus must still be available. The buyers in a private placement will usually be large, sophisticated investors such as investment banks, investment funds and insurance companies. The public may not be aware of a placement until it has been completed.


RELATED TERMS
  1. Private Placement

    The sale of securities to a relatively small number of select ...
  2. Prospectus

    A formal legal document, which is required by and filed with ...
  3. Institutional Investor

    A non-bank person or organization that trades securities in large ...
  4. Regulation D - Reg D

    A Securities and Exchange Commission (SEC) regulation governing ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  6. Pot

    The portion of a stock or bond issue that investment bankers ...
Related Articles
  1. Brokers

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  2. Investing Basics

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  3. Retirement

    IPO Basics Tutorial

    What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop.
  4. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Commodities

    Explore diversifying an investment portfolio through investing in commodities ETFs, and get information on some of the best commodity funds.
  5. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Copper

    Learn about some of the best available ETFs, both commodity-based and stock-based, that investors can use to gain exposure to the copper market.
  6. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Sugar

    Discover information about the exchange-traded funds, or ETFs, that offer investors exposure to the basic agricultural commodity, sugar.
  7. Mutual Funds & ETFs

    Top ETFs for Investing in Coffee

    Learn about the market for coffee, one of the largest agricultural markets, and two ETFs that investors can use to obtain exposure to the coffee market.
  8. Credit & Loans

    The Lurking Dangers of Student Loans

    Student loans are popular, but they present many dangers.
  9. Mutual Funds & ETFs

    ETF Analysis: Powershares DB US Dollar Bullish Fund

    Explore information and detailed analysis of two popular currency exchange-traded funds, the PowerShares DB U.S. Dollar Bullish and Bearish Index Funds.
  10. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Hong Kong

    Discover information and analysis of three exchange traded funds that investors can use to access potential profits from investing in Hong Kong.
RELATED FAQS
  1. How are American Depository Receipts (ADRs) priced?

    The price of an American depositary receipt (ADR) is determined by the bank or other financial institution that issues it. ... Read Full Answer >>
  2. What kind of assets can be traded on a secondary market?

    Virtually all types of financial assets and investing instruments are traded on secondary markets, including stocks, bonds, ... Read Full Answer >>
  3. How are American Depository Receipts (ADRs) exchanged?

    American depositary receipts (ADRs) are bought and sold on regular U.S. stock exchanges, either in the over-the-counter market ... Read Full Answer >>
  4. Why would a company decide to utilize H-shares over A-shares in its IPO?

    A company would decide to utilize H shares over A shares in its initial public offering (IPO) if that company believes it ... Read Full Answer >>
  5. How do I place a buy limit order if I want to buy a stock during an initial public ...

    During an initial public offering, or IPO, a trader may place a buy limit order by choosing "Buy" and "Limit" in the order ... Read Full Answer >>
  6. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  2. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  3. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  4. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  5. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  6. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!