What is a private location?

also known as a non -public offer, private placement is access to the sale of securities to a certain type of institutional investor without offering these securities to sell investors in general. The use of this type of strategy is common in the United States where regulations established by the Securities and Exchange Commission help define the process of selling securities in this way. While the term private placement is used more often in the United States, the general concept is found in investment circles around the world.

One of the distinguishing characteristics of private placement is that these privacy investors must be institutions rather than individuals. This means that banks, insurance companies, pension funds and other entities incorporated for this type of sale can participate. The extent of securities that can be offered in a non -public offer differs from shares of common or preferred shares, bills, and bond problems.

It is important to realize that thisThe type of non -public offer is a common approach to investing in almost every country around the world. This process allows you to generate revenues that help maintain an institution's solvent and capable of providing permanent support to their clients or members. For example, banks are involved in private placement as a means of creating a return on depositor resources, which in turn increases the security of these deposits.

In the United States and many other countries, securities are not necessarily registered with a government regulatory agency. This is usually true if there is no intention of selling securities to private investors. If the intention is to obtain securities and offer them for sale in a relatively short period of time, they will be able to get the acquisitions to be registered using the same general procedures followed by all securities that are included inInitial public offers.

The need to regulate private placement has long been understood in the financial world. Laws in the United States, such as the 1933 securities Act, provide a framework for continuing the creation of rules and regulations supported and enforced by the Securities and Exchange Commission in this country. The creation of standards and specific processes where private placement can occur is minimized by the opportunity for unethical and perhaps illegal securities trading. From this point of view, the regulation of the private placement process helps to maintain investment markets somewhat stable while protecting the rights of all investors, individuals and institutional.