Rule 144 - I was just asked a question about 144 filings, so figured I may as well post this for any others not familiar with it.
invest-faq.com
Subject: Regulation - SEC Rule 144
Last-Revised: 1 Oct 1997
Contributed-By: billman@pacificnet.net,
SEC Rule 144 allows for the sale of restricted securities in limited quantities. Rule 144 generally applies to corporate insiders and buyers of
private placement securities that were not sold under SEC registration statement requirements.
Corporate insiders are officers, directors, or anyone else owning 10% or more of the outstanding company securities. Stock either acquired
through compensation arrangements or open market purchases is considered restricted for as long as the insider is affiliated with the
company. If, however, the buyer has no management or major ownership interests in the company, the restricted status of the securities
expires over a period of time.
Under Rule 144, restricted securities may be sold to the public without full registration (registration is completed upon transfer of ownership)
if the following conditions are met.
1.The securities have been owned and fully paid for for at least one year, or upon the death of the owner.
2.Current financial information must be made available to the buyer. Companies that file 10K and 10Q reports with the SEC satisfy this
requirement.
3.The seller must file Form 144, "Notice of Proposed Sale of Securities," with the SEC no later than the first day of the sale. The filing is
effective for 90 days. If the seller wishes to extend the selling period or sell additional securities, a new form 144 is required.
4.The sale of the securities may not be advertised and no additional commissions can be paid.
5.If the securities were owned for between one and two years, the volume of securities sold is limited to the greater of 1% of all
outstanding shares, or the average weekly trading volume for the proceeding four weeks. If the shares have been owned for two years
or more, no volume restrictions apply to non-insiders. Insiders are always subject to volume restrictions.
The most recent rule change of Feb 1997 reduced the holding periods by one year. For all the details, visit the SEC's page on this rule:
sec.gov
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