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.


RELATED TERMS
  1. Institutional Investor

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

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

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

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  2. Brokers

    Brokerage Functions: Underwriting And Agency Roles

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

    Philips Q1 Results Make IPO Spinnoff More Likely (PHG)

    The direction PHG stock takes from here will likely depend on any update the management provides about the company's separation.
  5. Mutual Funds & ETFs

    VXX: An ETN Performance Case Study

    Examine the five-year performance of the volatility ETF VXX. Break down the performance by analyzing monthly and daily average returns.
  6. Term

    Advantages of Public Vs. Private Companies

    A privately held company is owned by its founder, management or a group of private investors.
  7. Investing News

    Bridgewater Associates: Investment Manager Highlight

    Discover the investment methodologies of Ray Dalio's Bridgewater Associates, the world's largest and most profitable hedge fund.
  8. Investing News

    AQR Capital Management: Investment Manager Highlight

    Discover the investment strategies and secrets of hedge fund powerhouse AQR Capital Management LLC in the alternative investment space.
  9. Investing Basics

    A Breakdown on How the Stock Market Works

    Learn what it means to own stocks and shares, why shares exist, and how you buy and sell them.
  10. Markets

    Comparing Primary And Secondary Capital Markets

    In the primary capital market, investors buy directly from the issuing company. In the secondary market, investors trade securities among themselves.
RELATED FAQS
  1. What Does the Political Economy Research Institute Do?

    Learn about the Political Economy Research Institute (PERI) and the studies its conducts. PERI's topics are of great interest ... Read Answer >>
  2. Should I offer alternative investments to my employees?

    Learn the pros and cons of employer-recommended alternative investments and why risky alternatives, such as hedge funds, ... Read Answer >>
  3. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Answer >>
  4. What is securitization?

    Securitization is the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming ... Read Answer >>
  5. Can hedge funds trade penny stocks?

    Discover the types of investments hedge funds can engage in, their primary goal, and the restrictions that preclude the average ... Read Answer >>
  6. When did Facebook go public? (FB)

    Learn how Facebook's initial public offering (IPO) did not go according to plan but how those who stuck with the company ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center