Amendments to Rule 144 Under the Securities Act of 1933
February 20, 2008
February 15, 2008 marks the effective date of the most significant overhaul in more than a decade of Rule 144 under the Securities Act of 1933. The amendments to Rule 144 will increase the liquidity of securities sold in transactions exempt from registration (also called "restricted securities") or held by affiliates of the issuer (also called "control securities"). Rule 144 provides a safe harbor for the resale of restricted and control securities without registration under the Securities Act. The amendments to Rule 144 will apply to securities acquired before or after the effective date.
The Rule 144 flowcharts for which links follow are meant to help you navigate the requirements of the Rule 144 safe-harbor, as amended by the SEC. One flowchart covers the resale of control securities by an affiliate (generally, a director, officer, or significant shareholder) of the issuer, and the other flowchart covers the resale of restricted securities by a non-affiliate. Perhaps the most significant change made to Rule 144 is the reduction of the holding period for resales of restricted securities of reporting companies from one year to six months. Also, Rule 144 now eliminates any restriction after a one-year holding period for resales by non-affiliates, rather than the two-year holding period required under the previous Rule 144(k).
If you have any questions or would like to learn more about these amendments, please do not hesitate to contact any of the following Sherman & Howard attorneys:
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