A qualified institutional buyer (or QIB), in law and finance, is a purchaser of securities that is deemed financially sophisticated and is legally recognized by security market regulators to need less protection from issuers than most public investors. Typically, the qualifications for this designation are based on an investor's total assets under management

Assets under management

Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...

 as well as specific legal conditions in the country where the fund is located. Currently, Rule 144A requires an institution to manage at least $100 million in securities from issuers not affiliated with the institution to be considered a QIB. Additionally, if the institution is a bank or savings and loans thrift they must have a net worth of at least $25 million.

Certain private placements of stock

Stock

The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...

 and bonds

Bond (finance)

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...

 are made available only to qualified institutional buyers to limit regulatory restrictions and public filing requirements.

See also

• Accredited investor
  Accredited investor
  Accredited investor is a term defined by various securities laws that delineates investors permitted to invest in certain types of higher risk investments including seed money, limited partnerships, hedge funds, and angel investor networks...
  
  
• Private placement
  Private placement
  Private placement is a funding round of securities which are sold without an initial public offering, usually to a small number of chosen private investors...
  
  
• Rule 144A
  Rule 144A
  Rule 144A. Securities Act of 1933, as amended provides a safe harbor from the registration requirements of the Securities Act of 1933 for certain private resales of minimum $500,000 units of restricted securities to QIBs , which generally are large institutional investors that own at least $100...
  
  
• Securities Act of 1933
  Securities Act of 1933
  Congress enacted the Securities Act of 1933 , in the aftermath of the stock market crash of 1929 and during the ensuing Great Depression...
  
  
• Securities and Exchange Commission