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.


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.

  1. Pot

    The portion of a stock or bond issue that investment bankers ...
  2. Regulation D - Reg D

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

    The first sale of stock by a private company to the public. IPOs ...
  4. Institutional Investor

    A non-bank person or organization that trades securities in large ...
  5. Private Placement

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

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