Rule 144
SEC Rule 144 allows for the resale of Restricted Securities to the public in limited quantities. Rule 144 generally applies to Corporate Insiders and buyers of Private Placement securities that were sold under exemptions from the SEC’s registration statement requirements defined in the Securities Act of 1933. Under Rule 144, Restricted Securities may be sold to the public by Corporate Insiders and buyers of Private Placements, prior to a two year holding period, without full registration of such securities under specific conditions and limitations. After a two year holding period, resale of such securities by non-affiliates of the Issuer to the public are unrestricted.
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Rule 144a
Rule 144a applies to securities which are offered or sold by a seller (e.g., Qualified Institutional Buyer ("QIB")) only to another QIB or to a purchaser that the seller and any entity acting on behalf of the seller reasonably believes is a QIB.
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What is an Equity Private Placement?
A private placement is a private sale of Restricted Securities by an Issuer to a relatively small number of institutions and/or individuals.
The private sale of restricted Equity and Equity-Linked Securities (i.e, an Equity Private Placement) is executed under certain exemptions from the registration requirements of the Securities Act of 1933 (e.g., Regulation D, Regulation S, Rule 144a).
However, these securities are ineligible for resale into the public market until such time that either (i) a resale Registration Statement has been filed with the Securities and Exchange Commission ("SEC") and declared effective or (ii) resale is permitted under Rule 144 without the need for an effective registration statement.
