Qualified Institutional Placement (QIP)

A qualified institutional placement (QIP) is a private placement of securities to qualified institutional buyers (QIBs). QIBs are institutional investors that have at least $100 million in assets under management. QIPs are exempt from the registration requirements of the Securities Act of 1933, but they must still be filed with the Securities and Exchange Commission (SEC).

QIPs are often used by companies to raise capital quickly and without the expense of a public offering. They can also be used to avoid the scrutiny of the SEC. However, QIPs can be risky for investors because they are not subject to the same disclosure requirements as public offerings.

There are a number of requirements that companies must meet in order to qualify for a QIP. These requirements include:

• The company must have at least $100 million in assets.
• The company must have been in business for at least three years.
• The company must have a net income of at least $1 million in each of the past two years.
• The company must have a market capitalization of at least $75 million.

The securities that are offered in a QIP must be sold to QIBs. QIBs are institutional investors that have at least $100 million in assets under management. QIBs include:

• Banks
• Insurance companies
• Pension funds
• Mutual funds
• Hedge funds

QIPs are often used by companies to raise capital quickly and without the expense of a public offering. They can also be used to avoid the scrutiny of the SEC. However, QIPs can be risky for investors because they are not subject to the same disclosure requirements as public offerings.