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IPO Glossary of Terms: Part 2




Description

This article is from the Investing Articles: Public Offerings: IPO and DPO series.

IPO Glossary of Terms: Part 2

Sophisticated Investor

Investors that meet the standards for participation in a non-public offering under Section 4(2) of the Securities Act of 1933, as amended ("Act"), under Section 25102(f) of the California Corporate Securities Law of 1968, as amended ("California Act"), and under the laws of other states.

These investors do not have to have the net worth or income of a Accredited Investor, but may invest in the same type offerings by qualifying under the sophisticated status. Members may apply for Sophisticated Investor status by completing an extensive questionaire. This questionaire asks details about a clients employment, investment history, education and other data that may be factored in to make a reasonable assumption that the investor may be classified sophisticated under the exemption.

Suitability Rules

Guidlines that those selling sophisticated and potentially risky financial products, must follow to ensure that investors have the financial means to assume the risks involved. Typical rules require the investor to have a certain net worth and liquid assets, so that he or she may not be irreparably harmed if the investment sours

Qualified Investor Definition

A Qualified Investor has a minimum two years experience in equity investing, and at least (US) $10,000 in liquid investment capital. ( Cash, Stocks, Bonds, CD's Etc... )

MINIMUM INDICATION ACCEPTED ON PUBLIC OFFERINGS IS $2,500

SUBJECT TO PERMISABILITY

ALL U.S. RESIDENTS MUST COMPLY WITH ANY STATE INCOME, NET WORTH, OR RESIDENCY RESTRICTIONS

Selling Group

A group of dealers appointed by the syndicate manager of an UNDERWRITING GROUP, as AGENT for the other
underwriters, to market a new or secondary issue to the public; aslo called selling syndication.

 

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