posted on 06-06-2019

Qualified Institutional Buyer (QIB)

Updated October 1, 2019

What is a Qualified Institutional Buyer (QIB)?

A qualified institutional buyer (QIB or QUIB) is a company that manages at least $100 million of securities on a discretionary basis or is a registered broker-dealer investing at least $10 million in non-affiliate securities.

How Does a Qualified Institutional Buyer (QIB) Work?

A QIB can be an insurance company, a bank, a 401(k) plan, an employee benefit plan, a trust fund, a business development company (BDC), a charity, or even an entity owned by qualified investors. QIBs are regarded as highly sophisticated entities that do not need as much protection as less sophisticated investors or entities.

Why Does a Qualified Institutional Buyer (QIB) Matter?

QIBs are allowed to buy private placements under SEC Rule 144A. These offerings are generally not registered with the SEC, and therefore they are only available to those whom the courts have found able to "fend for themselves." Foreign issuers can also make limited offerings to American QIBs, as legally permissible.