Series 82 key terms

A sale of securities to a limited group of chosen investors without a public offering registered with the SEC, usually relying on an exemption such as Regulation D and documented by a private placement memorandum.

SEC rules that exempt certain limited offers and sales of securities from full registration, letting issuers raise capital from investors who meet specified conditions and requiring a Form D notice filing.

A person or institution the SEC treats as financially sophisticated enough for unregistered offerings, including individuals meeting set income thresholds or a net worth test that excludes the primary residence.

A high-wealth investor standard under the Investment Company Act, generally requiring at least $5 million in investments for individuals, whose participation helps a private fund avoid regulation as a public-facing investment company.

An institution that owns and invests at least $100 million in securities of unaffiliated issuers, as defined in Rule 144A, and may therefore trade restricted securities with other such institutions without registration.

A Regulation D exemption allowing sales to an unlimited number of accredited investors plus up to 35 non-accredited but sophisticated investors, provided the offering is not promoted through general solicitation.

A Regulation D exemption that permits general solicitation and advertising but requires the issuer to take reasonable steps to verify that every purchaser actually qualifies as an accredited investor.

Any broad public advertising or outreach, such as mass emails, open website postings, or seminars for strangers, that markets an offering to people the firm has not previously qualified.

The disclosure document given to prospective investors in an unregistered offering; it describes the issuer, the securities, the use of proceeds, the principal risks, and the investment terms.

A short notice filing made with the SEC, and often with state regulators, within 15 days of the first sale in a Regulation D offering; it is a notice, not a registration statement.

A Rule 506 provision that blocks an issuer from using the exemption if the issuer or certain covered persons have specified past misconduct, such as fraud convictions or securities regulatory bars.

A relationship between the firm and an investor formed before any offering is promoted, which helps show the investor was not solicited by general advertising and was already known to the firm.

A written identity-theft prevention program required of broker-dealers that collects each customer's name, date of birth, address, and identification number, verifies them, and checks government watch lists.

The ongoing practice of learning who a customer is, including identity, business, source of funds, and risk profile, before and while servicing the account so unusual activity can be spotted.

What the customer wants the money to accomplish, such as capital preservation, current income, growth, or speculation; it drives which investments and strategies fit the account.

How much loss, volatility, and illiquidity a customer can withstand financially and emotionally; it sets the outer limit on the risk of any investment recommended for the account.

When and how much cash the customer will need to draw from the account; heavy or near-term needs argue against tying money up in long-dated, illiquid private placements.

An individual a customer names whom the firm may contact in limited situations, such as suspected exploitation or a health emergency, without giving that person any authority over the account.

The contract signed when an account is opened that sets out the rights and duties of the customer and the firm, including arbitration terms and the customer's duty to keep information current.

A rule requiring broker-dealers to give customers an initial and annual notice explaining what nonpublic personal information they collect, how it is used, and with whom it may be shared.

A standard requiring a broker-dealer recommending a securities transaction or strategy to a retail customer to act in that customer's best interest, weighing reasonably available alternatives, costs, and the customer's profile.

The investigation a firm performs on an offering, covering the issuer, management, financial statements, contracts, and legal structure, before permitting the product to be recommended to customers.

A demand by a private fund or issuer for investors to pay in part of the money they previously committed, often on short notice and sometimes with penalties for missing the deadline.

A set time after purchase during which the investor may not sell or transfer the security; in private placements it can run for months or years and adds meaningful liquidity risk.

Securities acquired in an unregistered private sale that cannot be resold to the public until they are registered or an exemption, such as Rule 144, becomes available.

An investment that cannot be converted to cash quickly or without a significant price concession; private placements, non-traded REITs, and private fund interests are common examples.

SEC rules specifying which records a broker-dealer must create, such as orders, confirmations, and customer data, and how long and in what format those records must be preserved.

A bank, broker-dealer, or similar regulated institution authorized to hold customer assets; using one helps a firm avoid being treated as having custody of client funds for surprise-exam purposes.

The automated system that moves customer positions and account data between broker-dealers; the receiving firm normally obtains written customer authorization and validates the details before submitting the request.

A confidential filing a broker-dealer makes to FinCEN when it detects transactions that may involve money laundering or other illegal conduct; the customer must not be told about the filing.

The document an investor signs to buy interests in an offering, stating the amount, confirming accredited status and suitability representations, and letting the issuer accept or reject the order.

The total that must be raised before the issuer may use investor money; funds sit with an independent escrow agent and are returned to subscribers if the minimum is not reached.

The day an order is executed and the price and terms are fixed; it starts the settlement clock and triggers recordkeeping and confirmation obligations.

The date by which the buyer must pay and the seller must deliver the security; for most regular-way trades this falls one business day after the trade date.

A written notice a broker-dealer must send at or before settlement that discloses the security, price, commission, the capacity in which the firm acted, and other required trade details.

A control where a firm confirms payment or wire instructions by phoning the customer at a number already on file rather than one supplied in the request, to block fraudulent transfers.