(Control securities are held by company insiders.) Rule 144 also regulates transactions in securities held by controlling or majority shareholders. Rule 144 mandates that five conditions be satisfied for the sale of securities outside the public markets. There are some exceptions to the rule.
What is Rule 144(a)(3)?
Securities Act Rule 144 (a) (3) identifies what offerings produce restricted securities. After such a transaction, the security holders can only resell the securities into the market by using an effective registration statement under the Securities Act or a valid exemption from registration for the resale, such as Rule 144.
What is SEC Rule 144?
Rule 144 is a regulation enforced by the U.S. Securities and Exchange Commission (SEC) that sets the conditions for the sale or resale of restricted, unregistered, and control securities. Rule 144 provides an exemption from registration requirements for the sale of securities through the public markets if a number of specific conditions are met.
