What defines a restricted person in the context of IPO purchases?

A restricted person in the context of initial public offering (IPO) purchases is defined as someone who is closely associated with the member firm overseeing the IPO, specifically including immediate family members of employees of that firm. This restriction is in place to prevent any form of unfair advantage or conflict of interest during the IPO process, ensuring that the allocation of shares is done in a fair and equitable manner.

When considering the choices, the definition revolves around the relationships and potential conflicts that could arise from those personal connections. It's essential to recognize that the other options do not precisely fit the established criteria for restricted persons as defined by regulations set by entities like FINRA. For instance, simply working in finance does not inherently restrict someone from participating in IPOs, nor does having prior investment experience or being an employee of an exchange. Instead, restricted persons are specifically those with direct familial ties to the employees of the member firm that is underwriting the IPO.