Qualified Institutional Buyer (QIB) Status
Chapters in this video
- 0:00 QIB as the buyer-side gate for private resales
- 1:17 The $100 million standard and discretionary ownership
- 2:50 The $10 million dealer discount and riskless principal
- 3:40 The bank double hurdle: securities plus net worth
- 4:43 Natural persons are permanently locked out
- 5:20 The opposite catch-all entity rule versus accredited investors
- 6:00 Look-through provision and capacity requirements
- 6:13 Rapid-fire exam recap
What this video covers
- Why the standard QIB threshold is $100 million in securities of unaffiliated issuers, and why mere custody of client assets does not count toward that figure
- How registered dealers clear a separate $10 million bar, and why unsold allotments from public offerings are excluded from that dealer calculation
- When a registered dealer acting as riskless principal faces no independent dollar threshold because it stands in for a QIB counterparty
- Why banks and savings and loan associations must pass a double hurdle: both the $100 million securities test and a separate $25 million audited net worth test
- How financial statement dating rules differ for U.S. institutions (16 months) versus foreign institutions (18 months)
- Why natural persons are permanently excluded from QIB status regardless of personal wealth, and how the exam uses the word "institutional" to trick you
- Why the catch-all QIB entity rule is the opposite of the accredited investor rule: a catch-all QIB entity may be formed for the specific purpose of the offering
- How the capacity requirement (own account or account of another QIB) works, and how the all-QIB-owners look-through provision bypasses any dollar test
Read the full lesson, free
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