Private Placement Subscriptions: A Checklist
Private placements require concerted coordination to ensure investor suitability, clean subscription mechanics, and reliable settlement. Sponsors and counsel should adopt a checklist-based intake that reduces common operational breaks and accelerates closing. This checklist focuses on documents, verification, escrow considerations, and custodial handoffs. Filling these items early mitigates delays caused by missing tax forms, incomplete consents, or incompatible custody instructions. The practical steps below are informed by operational patterns that repeatedly cause settlement friction; by addressing them proactively, issuers and investors can achieve more predictable outcomes with auditable confirmations.
Documentation & subscription forms
Ensure each investor completes a fully executed subscription agreement that includes investor representations, signature date, and payment instructions. Include a standard cover sheet that summarizes investor name, entity type, tax residency, and beneficial owners. Attach copies of corporate authorizations (board resolutions, organizational documents) for entities and an evidence of authority for signatories. Collect required tax documentation such as W-9 or W-8 series forms early to prevent post-closing withholding complications. Redact or separate sensitive attachments when sharing materials with limited advisors to preserve confidentiality. Maintain an encrypted repository for all executed documents and record the file hash or timestamp for auditability. Clear and consistent document structure reduces ambiguity during post-closing reconciliation and supports custody partners when matching instructions to incoming funds or share allocations.
Investor verification & suitability
Complete KYC/AML screening and accredited investor verification before confirming allocation. Use reputable verification providers to corroborate identity and source-of-funds where required. Record beneficial ownership and any PEP or sanctions screening results alongside supporting documents. Document investor suitability assessments for compliance files: why a particular investor is eligible and any supporting evidence (financial statements, certification forms). For institutional investors, obtain fund documentation and authorized signatory lists. Early verification prevents last-minute rejections and helps custodians accept incoming instructions without additional remediations. Keep verification outcomes attached to each subscription record for auditors and regulators.
Escrow, payment handling & timing
Decide whether cash should be held in escrow or remitted directly to a designated account. If using escrow, document the escrow agent agreement, release conditions, and timeline for withdrawal. Clarify currency, wire instructions, and expected clearing windows. Coordinate with banks and custodians to ensure delivery-versus-payment mechanics are feasible within their operating hours. Set explicit cut-off times for subscriptions to qualify for a tranche and communicate these to investors. Include contingency rules for failed or late funding and define remediation steps. Clearly state fee allocation such as placement fees or wire charges to avoid disputes during reconciliation. Transparent payment mechanics help custodians match payments with subscriptions and issue post-settlement confirmations quickly.
Custodial readiness & confirmations
Confirm in advance that the receiving custodian supports the instruments and transfer mechanics required for the placement. Provide the custodian with a summary file mapping investor names to account references, expected amounts, and any reference IDs. Request pre-acceptance confirmation if the custodian requires special forms or mandates. After settlement, obtain a post-settlement confirmation that shows the new positions, relevant account numbers, and any fees charged. Export machine-readable reconciliation reports and retain them alongside human-readable confirmations to support accounting and audit reviews. If transfer agents are involved, confirm stop-transfer or consent procedures and timeline expectations to avoid settlement delays.
Post-settlement reconciliation
Immediately after settlement, reconcile subscriptions against received funds and custodial confirmations. Produce a three-way match between subscription records, bank receipts/escrow releases, and custodian position statements. Document and escalate any differences with a clear remediation plan and timeline. Archive reconciliations and confirmations in an encrypted, access-controlled repository and issue final allocation notices to investors. These records are the foundation for regulatory reporting, tax filings, and internal audits—complete and machine-readable exports ease downstream accounting and governance processes.