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Placement Agreement
I need a placement agreement for an intern who will be working with our company for a 6-month period, focusing on gaining practical experience in marketing and sales. The agreement should include a stipend, a flexible work schedule, and a clause for potential full-time employment consideration upon successful completion of the internship.
What is a Placement Agreement?
A Placement Agreement sets out the terms when a Swiss financial institution helps a company sell securities or financial instruments to investors. It's the key contract between the issuing company and the bank or broker who will market and distribute these offerings in Switzerland's capital markets.
Under Swiss financial regulations, these agreements must specify placement fees, selling restrictions, and the broker's exact responsibilities. They're especially common in private placements and IPOs, where banks act as placement agents to find qualified investors while following FINMA guidelines on investor protection and disclosure requirements.
When should you use a Placement Agreement?
Swiss companies need a Placement Agreement when raising capital through securities offerings, particularly for private placements or IPOs. This agreement becomes essential once you've decided to work with investment banks or financial intermediaries to distribute your securities to qualified investors.
The timing typically aligns with your capital raising strategy - use it before starting any marketing or distribution activities. Getting this agreement in place early helps avoid regulatory issues with FINMA, clarifies everyone's responsibilities, and sets clear terms for fees and commission structures. It's particularly important when targeting institutional investors or planning cross-border placements.
What are the different types of Placement Agreement?
- Agency Placement Agreements: Used when financial intermediaries act as agents to place securities with qualified investors, focusing on marketing and distribution without underwriting
- Underwritten Placement Agreements: Common in larger offerings where banks guarantee the placement by purchasing securities upfront
- Private Placement Agreements: Tailored for smaller, targeted offerings to specific institutional investors with detailed subscription terms
- Syndicated Placement Agreements: Structured for multiple placement agents working together, defining roles and fee-sharing arrangements
- Cross-border Placement Agreements: Modified to address international distribution, incorporating specific Swiss and foreign regulatory requirements
Who should typically use a Placement Agreement?
- Issuing Companies: Swiss businesses seeking to raise capital through securities offerings, responsible for providing accurate information and meeting disclosure requirements
- Investment Banks: Act as placement agents, managing the distribution of securities and conducting due diligence
- Legal Counsel: Draft and review Placement Agreements to ensure FINMA compliance and protect their clients' interests
- Qualified Investors: Institutional buyers and high-net-worth individuals who receive the placement offering
- Compliance Officers: Monitor adherence to Swiss securities regulations and internal policies throughout the placement process
How do you write a Placement Agreement?
- Securities Details: Gather precise information about the offering type, volume, and pricing structure
- Placement Terms: Define commission rates, selling restrictions, and distribution timeline
- Due Diligence: Compile company financials, regulatory approvals, and risk disclosures
- Party Information: Document all placement agents' details, roles, and responsibilities
- Regulatory Compliance: Verify alignment with FINMA requirements and Swiss securities laws
- Document Generation: Use our platform to create a customized, legally-sound Placement Agreement that includes all mandatory elements
What should be included in a Placement Agreement?
- Parties & Roles: Full legal names and clear designation of placement agent responsibilities
- Securities Description: Detailed specifications of the financial instruments being placed
- Placement Terms: Commission structure, selling restrictions, and distribution parameters
- Representations & Warranties: Standard Swiss legal guarantees from both issuer and placement agent
- Regulatory Compliance: FINMA-specific requirements and investor protection measures
- Termination Rights: Conditions for agreement cancellation and force majeure provisions
- Governing Law: Swiss law application and jurisdiction specifications
What's the difference between a Placement Agreement and a Broker Agreement?
A Placement Agreement differs significantly from a Broker Agreement in several key aspects, though both involve financial intermediaries. While Placement Agreements specifically govern securities distribution arrangements, Broker Agreements cover a broader range of financial services and transactions.
- Scope and Purpose: Placement Agreements focus exclusively on securities offerings and capital raising activities, while Broker Agreements can cover trading, advisory, and general brokerage services
- Regulatory Framework: Placement Agreements must comply with specific FINMA securities placement rules, whereas Broker Agreements follow general Swiss financial intermediary regulations
- Duration: Placement Agreements typically cover a single offering or defined placement period, while Broker Agreements often establish ongoing service relationships
- Compensation Structure: Placement Agreements usually specify one-time placement fees tied to successful distribution, whereas Broker Agreements often include various fee types and commission structures
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