Private Placement Program
Private Placement Programs | Definition
Issues those are exempt from public-registration provisions in section 4-2 of the Securities Act of 1933. Hedge fund shares are generally offered as private placements, which are typically offered to only a few investors, rather than the general public. They must meet the following criteria:
- The issuer must believe that the buyer is capable of evaluating the risks of the transaction.
- Buyers have access to the same information that would appear in the prospectus of a publicly offered issue.
- The issuer does not sell the securities to more than 35 parties in any 12-month period.
- The buyer does not intend to sell the securities immediately for a trading profit.