Placement

What is a 'Placement'

A placement is 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.

BREAKING DOWN '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.


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RELATED FAQS
  1. What factors might make a private placement a risky investment?

    Learn about purchasing securities through a private placement investment, and understand the risk factors associated with ... Read Answer >>
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  3. What is required to become an accredited investor in a private placement?

    Learn how the SEC defines accredited investors, and understand exceptions to the requirements for an accredited investor ... Read Answer >>
  4. What are the disclosure requirements for a private placement?

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