Qualified Independent Underwriter (QIU)

Definition:

As set out in FINRA Rule 5121, a Qualified Independent Underwriter is required when the Managing Underwriter or Lead Manager has a conflict of interest in the offering (e.g., where 5% or more of the offering’s proceeds are to be used to repay a loan owed to an Affiliate of the underwriter).

A QIU must be a FINRA member and must have been actively engaged in the investment banking and securities business for five years immediately prior to the filing of a Registration Statement, and must not have Beneficial Ownership of more than 5% of the outstanding securities of the issuer. A QIU will be mandated to conduct the requisite Due Diligence and undertake the legal responsibilities and liabilities of an underwriter.

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