Rule 144A.

Securities Act of 1933 The Securities Act of 1933, also known as the 1933 Act, the Securities Act, the Truth in Securities Act, the Federal Securities Act, and the '33 Act, was enacted by the United States Congress on May 27, 1933, during the Great Depression and after ...

, as amended (the "Securities Act") provides a safe harbor from the

registration Register or registration may refer to: Arts entertainment, and media Music * Register (music), the relative "height" or range of a note, melody, part, instrument, etc. * ''Register'', a 2017 album by Travis Miller * Registration (organ), th ...

requirements of the

for certain private resales of minimum $500,000 units of

restricted securities Restricted stock, also known as restricted securities, is stock of a company that is not fully transferable (from the stock-issuing company to the person receiving the stock award) until certain conditions (restrictions) have been met. Upon satisfa ...

qualified institutional buyer A qualified institutional buyer (QIB), in United States law and finance, is a purchaser of securities that is deemed financially sophisticated and is legally recognized by securities market regulators to need less protection from issuers than most p ...

s (QIBs), which generally are large

institutional investor An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked co ...

s that own at least $100 million in investable assets. When a

broker A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confu ...

dealer Dealer may refer to: Film and TV * ''Dealers'' (film), a 1989 British film * ''Dealers'' (TV series), a reality television series where five art and antique dealers bid on items * ''The Dealer'' (film), filmed in 2008 and released in 2010 * ...

is selling

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

in reliance on Rule 144A, it may make offers to non-QIBs through general solicitations following an amendment to the Rule in 2012. Since its adoption, Rule 144A has greatly increased the liquidity of the securities affected. This is because the institutions can now trade these formerly restricted securities amongst themselves, thereby eliminating the restrictions that are imposed to protect the public. Rule 144A was implemented to induce foreign companies to sell securities in the US

capital market A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers t ...

s. For firms registered with the SEC or a foreign company providing information to the SEC,

financial statement Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...

s need not be provided to buyers. Rule 144A has become the principal safe harbor on which non-U.S. companies rely when accessing the U.S. capital markets. Originally, in 1990, the

Nasdaq The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...

Stock Market offered a compliance review process which granted

The Depository Trust Company The Depository Trust & Clearing Corporation (DTCC) is an American Trade (financial instrument), post-trade financial services company providing clearing (financial), clearing and settlement (finance), settlement services to the financial markets ...

(DTC) book-entry access to Rule 144A securities. That review was later abandoned as unnecessary.Securities And Exchange Commission
/ref> Nasdaq launched an Electronic Trading Platform for Rule 144A securities called PORTAL. Rule 144A should not be confused with Rule 144, which permits public (as opposed to private) unregistered resales of restricted and controlled securities within certain limits.

References

{{Reflist

External links

17 CFR 230.144A - Private resales of securities to institutions
Rule 144A