Institutional Investor
Institutional Investor can be insurance companies, banks, mutual funds, hedge funds, retirement funds and similar firms catering to the financial security of the public that make large investments. These companies are financially quite sophisticated and maintain large investment and security portfolios.
Due to the financial sophistication of the Institutional Investor they participate in private security placements and hence, the general aspects of the security laws are inapplicable in their case. This is seen in the United States of America, where the private placement according to the Rule 506 under Regulation D is extended to an accredited investor without even completing the registrations of the offering of the securities with the Security and Exchange Commission.
The Security and Exchange Commission, or, the SEC is a government agency of the United States of America that exercise the main responsibility of implementing and enforcing the laws of federal securities thereby regulating the securities stock market. Thus dealing with the regulations of Investment and Security policies the SEC enjoys the enforcement authority given by the Congress. Working in unison with the agencies of criminal law enforcement, the Security and Exchange Commission is committed to the following reinforce the control points dealing with Institutional Investment. These regulations implemented over the Institutional Investor include:
Actions pertaining to civil enforcement against individuals, or, companies that have committed fraudulence.
Actions are taken against those individual authorized investors and Institutional Investor that have provided false information and engaged in insider trading affecting the Institutional Investment Policy jeopardizing the Investment and Security options of the clients.
Civil enforcement actions are also taken against such individuals who are seen to violate the certain security laws.
Overall violation of all these above can lead to prosecution by the civil enforcement group of the SEC.
The Institutional Investor can be defined to be going along the following sectors dealing with institutionalized investment and security guidelines.
1.A bank, insurance company, often a registered one such as the mutual funds can be such organizations.
2.The organizations dealing in institutional investment can be business development company, or, a small scale business based investment company.
3.These institutions catering to the investment and security benefits can also be a corporation, a charitable organization with a partnership of the asset value exceeding five million dollars.
4.Individualized investments can be exercised by persons who are directors, executive officers, or, general company partners trafficking the company securities with prior official consent.
5.Institutional Investor can participate in a coordinating business dealing with the accredited investors who are all owners of equity funds.
6.Investment and security decisions can be made by an insurance company, a bank, or, even by registered investment advising personnel dealing with an employee benefit plan exceeding a total asset of five million dollars specified by the Employee Retirement Income Security Act.
7.An individual whose income exceeds $200,000 in the preceding two years, or, with a spouse income exceeding one million dollars at the time of the purchase can exercise their dealings in investments and security.
In other countries there can be different types of Institutional Investor like Banks, Trusts and Credit Unions that deal in the Institutional Investment policy. Certain countries in the Middle East that are into oil export, the sovereign wealth funds are important assets for institutionalized investments. In some other countries the developed economies persons funds are very significant for such Institutional Investor.