Initial Purchaser
Definition:
Entities (typically investment banks) that purchase unregistered securities directly from the issuer and/or Selling Shareholders under a valid Private Placement exemption under the Securities Act and then resell them only to suitable investors under another applicable registration exemption. Initial Purchasers typically act as Placement Agents that immediately resell such securities under a registration exemption such as Rule 144A and/or Regulation S. For example, in a Rule 144A Offering, an Initial Purchaser will initially purchase the shares from the issuer pursuant to Section 4(a)(2) of the Securities Act and then quickly resell them to Qualified Institutional Buyers (QIBs) under Rule 144A (i.e., the initial purchaser is the equivalent of an underwriter in an offering of unregistered securities).