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SOLICITOR

A solicitor is any person who for compensation actively seeks new business for an investment adviser. A solicitor can also include professionals who refer clients to the investment adviser for a fee. All solicitors must be registered as investment adviser representatives.

INSTITUTIONAL INVESTOR

An institutional investor is a person or firm that trades securities for his or her own account or for the accounts of others. Institutional investors are generally limited to large financial companies. Because of their size and sophistication, fewer protective laws cover institutional investors. It is important to note that there is no minimum size for an institutional account. Institutional investors include:

• Broker dealers

• Investment advisers

• Investment companies

• Insurance companies

• Banks

• Trusts

• Savings and loans

• Government agencies

• Employment benefit plans with more than $1,000,000 in assets

ACCREDITED INVESTOR

An accredited investor is an individual who meets one or more of the following criteria:

• Has a net worth of $1,000,000, excluding the primary residence, or

• Earns $200,000 per year or more for the last two years and has the expectation of earning the same in the current year,

or

• Is part of a couple earning $300,000 per year or more.

QUALIFIED PURCHASER

A qualified purchaser must meet strict minimum financial requirements. Securities sold to qualified purchasers are not required to register in the state where the qualified purchaser resides. A qualified purchaser is:

• An individual with at least $5,000,000 in investments.

• A family-owned business with at least $5,000,000 in investments.

• A trust sponsored by qualified purchasers.

PRIVATE INVESTMENT COMPANY

A private investment company is an unregistered investment company or hedge fund that raises funds through the sale of securities to qualified purchasers for any business purpose.

 
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