A rule that exempts private security offerings from going through the Security and Exchange Commission’s (SEC) registration process that is required under the 1933 Securities Act. The objective of Rule 144A is to increase the liquidity and efficiency of the U.S. equity and debt markets for securities issued in private placements. Thus, large institutional investors are able to trade restricted securities more freely with other institutional investors without subjecting the companies issuing the securities to the SEC registration and disclosure process. However, the buyer of any securities must be a qualified institutional buyer (QIB), an institution that owns and manages $100 million or more in qualifying securities. The amount may be dropped down to $10 million for registered broker/dealers.