Series 82: Private Resales To Qualified Institutional Buyers—Rule 144A

Private Resales to Qualified Institutional Buyers—Rule 144A

SEC Rule 144A allows issuers and non-issuers to sell restricted securities to qualified institutional buyers (QIBs) without restrictions. Once a qualified institutional buyer purchases a restricted security, it can sell it to other QIBs without restrictions. So what are QIBs? QIBs are institutional investors, such as insurance companies, investment companies, pension plans, or banks, that manage at least $100 million in assets. QIBs must always be entities; they can never be individuals. The $100 million threshold for assets under management does not include securities issued by the QIB or an affiliate of the QIB. For registered broker-dealers, the minimum amount under management is only $10 million. To qualify as a QIB, a bank must also have a net worth of at least $25 million.

Recent amendments to Rule 144A permit general solicitations and advertisements and other offers to persons ot