Issuer definition
/What is an Issuer?
An issuer is an entity that offers debt securities or equity securities for sale to investors. An issuer sells securities in order to obtain funding for its operations or acquisitions. An issuer does not have to be a for-profit corporation; governments commonly issue debt securities, too.
Many issuers fall under the reporting requirements of the Securities and Exchange Commission (SEC). Some issuers avoid these burdensome requirements by using a variety of exemptions allowed by the SEC. These exemptions are designed for smaller issuances to discerning investors with a high net worth.
Example of an Issuer
As an example of an issuer, Molehill Corporation sells 100,000 shares of its common stock to the investment community, with the intent of using the proceeds to acquire new digging equipment. This means that Molehill is an issuer, and is required to make regular informational filings with the Securities and Exchange Commission that reveal its financial situation.
Issuers vs. Investors
When an issuer sells a security, the party on the other side of the transaction is an investor. When an investor is purchasing a debt security, this puts the investor in the role of a lender to the issuer, which in turn becomes the borrower.