Glossary

Private Placement Memorandum

A PPM or private placement memorandum is also referred to as offering document or offering memorandum. This is a legal document that acts as a security document in a business and is also given to the potential investors when they are planning to sell shares or stocks. Private Placement Memorandum is used basically during those transactions when the securities have not been registered under either state law or federal law, rather these are sold with the help of any of the exemptions from registration. Private Placement Memorandum basically explains various features in detail like the company that is planning to sell the securities, various investment risks, the terms and conditions of the offering, and many more aspects of the transaction. Private Placement Memorandum also explains disclosures that are involved and their variation depending on the factors like the target customers, which registration exemption being used, the complexity of the offering terms and more.

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Offering Memorandum

An offering circular (OC), also known as Offering Memorandum (OM), is a legal document that contains the potential, risks, terms and objectives of an investment which is involved with the private placement. This financial prospectus includes items such as, detailed and comprehensive description of business, management biographies, financial statements etc. Basically, it aims to provide complete information to the buyers on the offering. It further protects the sellers from the cumbersome liability linked with the selling of unregistered securities. They are also called “private placement memorandum” or PPM. They are essentially required to be used in a “private offering”; a sale of securities or stock between the various private parties.

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Information Memorandum

An information memorandum is a legal document prepared by an investment banker or a mergers and acquisitions advisory firm and provided by the company to the prospective investors after they have signed a confidential agreement. This is presented to the potential buyers as a marketing document which will highlight the attractive investment summary or features of the respective company. IM is the best document offering a vast amount of investment and company information to the potential buyers. It is completely a marketing document that motivates the prospective investors to invest in a company and should disclose all the materially essential facts to the buyers. According to the section 31 of the companies act, 2013, an information memorandum should be filed by a company which is also filing the required shelf prospectus. Also according to the Rule 10 of Companies (Prospectus and allotment of securities) rules, 2014, it should be filed in Form PAS-2 to the registrar along with the prescribed fees.

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Explanatory Memorandum

The laws that are proposed are called “Bills”. Every Parliament passes a Bill, which is introduced in the Parliament with the main objective of being converted into a law. All the commissioned proposals, executive documents, bills and the delegated acts must contain an “explanatory memorandum” along with them. Whenever Parliament introduces a bill as regards the 1st reading, an explanatory note or an explanatory memorandum must be available at the very same time. The basic purpose of such a memorandum is to clarify and explain the intended operation as well as the purpose of the presented Bill. It completely explains and describes each and every clause of the presented Bill. This clause by clause explanation or notes could assist in interpreting the legislation. Even the courts take them into consideration when they are concentrating on an Act. To be precise, it contains the purpose and contents of the proposed Bill in simple and plain English text. They came into normal regular use in around 1978- 1982 and were kept with the Bills. They have been issued since 1993 for the Common wealth regulations, Australia.

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Hedge Fund Memorandum

Before making an investment decision in a hedge fund, it is very important to embark on an information gathering journey as it will help in making a right decision. This information is readily available from the third party sources or a hedge fund manager. The information collected will also depend on the type of information sought and depth in which information is required. When seeking information from a hedge fund manager, it is imperative that a prospective investor identifies himself as a registered investment advisor or an accredited investor. This has now become a mandatory requirement when obtaining information.

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PPM

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Subscription Agreement

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Term Sheets

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Private Placement Market

The day to day market available for discounted bank instruments like bonds, BG, SBLC, MTN, etc., is huge and involves “exit-buyers” and issuing banks. The exit buyers entail Pension Funds, financial institutions, etc., in the private placement market. When the similar activities are carried out in a bank, they are referred to as the “off-balance sheet activities”. These activities are responsible for bringing a lot of benefit of the banks. Basically, the off balance sheet activities carried out in a bank is contingent assets and liabilities, where the value is dependent on the outcome on which the claim, like an option, is dependent. These activities reflect within the balance sheet as memoranda items. The bank is not required to make considerations regarding binding capital constraints as there is lack of deposit liability.

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Stock and Bond Securities

Money is one of the vital elements that are used to buy necessary comforts in life. It may be used for a variety of purposes like school fees for children’s education, buying household goods, and so on. Every individual strives hard to increase his or her earning. Many people also focus on saving the money that has been earned after a lot of hard work in the share market. The most commonly used financial instruments where money can be saved are the bonds and the stocks. Both these financial instruments are quite popular among the public as they gain an opportunity to maximize their profits in the near future. Before investing in either of the financial instruments, it is imperative to find out more about them so as a judicious decision can be taken.

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Memorandum database

The advent of computers has completely revolutionised the business world as they help in providing and analyzing information that they have previously gathered. The complexity of the business processes requires a large amount of data or information available. A large amount of data needs to be accessed, stored, organised and retrieved by the various users. This has lead to the emergence of the database management system. A database stores a large amount of information in such a way that it can be easily, quickly and accurately be accessed by a particular user.

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Memorandum Library

When looking forward to join forces with another company for better utilization of available resources and enhanced profits, a Memorandum of Understanding is signed. It is basically a semi formal document, short in length which is used for message transmission within an organization. When there was a need to ensure understanding or document agreements between work units, internal departments and individuals, memoranda were used. These understandings were documented in a memorandum which eventually came to be known as MoU or Memorandum of Understanding. Later, the use of MoU increased to a considerable extent and it started to encompass individuals and organizations outside the originating organization. Today, memos, letters or myriad documents are used for formatting MoU’s.

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144A/Reg S

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Equity and Debt

There are many methods and strategies that companies use to raise capital today. Some of the most popular ways are by selling equity in the company, i.e. selling an ownership stake, or issuing debt securities, i.e. taking a loan.

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