Rule 144

What Is Rule 144?

Rule 144 is a nonexclusive safe harbor for reselling restricted and control securities without registration. Affiliate status depends on control, not an automatic 10% ownership test.

Holding Periods

Restricted securities generally require six months for qualifying reporting issuers, or one year for non-reporting issuers. A holding period does not arise merely because an affiliate owns unrestricted shares.

Affiliates and Non-Affiliates

A seller who is not an affiliate and has not been one for the preceding three months can generally sell restricted reporting-issuer securities after six months subject to current public information. Volume, manner-of-sale and Form 144 conditions do not apply to that non-affiliate. After one year, the current-information condition also falls away. Non-reporting restricted securities generally require one year.

Affiliates remain subject to applicable current-information, volume, manner-of-sale and notice conditions. For exchange-traded equity, the three-month volume limit generally uses the greater of 1% outstanding or the preceding four-week average weekly trading volume; OTC and debt provisions differ.

Form 144 is required above 5,000 units or $50,000 in three months, when applicable. File concurrently with placing the broker order or directly executing with a market maker.

Shell-company and other special conditions can restrict reliance. Holding time alone does not establish eligibility.

Current Rule 144