SEC Shortens Holding Period for Restricted Securities

December 01, 2007

The Securities and Exchange Commission (the “SEC”) has significantly reduced limitations on the resale of privately placed securities of companies reporting under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Under revised Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), unregistered, restricted securities (“Restricted Securities”) may be resold without limitation or registration by non-affiliates of the issuer (“NonAffiliates”) six months after they are acquired from the issuer or an affiliate of the issuer, provided certain public information requirements are met. For decades, the holding period for Restricted Securities had been as long as three years and, until the action taken by the SEC, these limitations extended for up to two years. Affiliates (“Affiliates”) of issuers reporting under the Exchange Act may make limited resales of Restricted Securities after six months from their acquisition from the issuer or from another affiliate of the issuer. Previously, such limited resales could only be made after holding such securities for a year. The amendments, adopted in a final rule issued on December 6, 2007, will go into effect on February 15, 2008.

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