DEFINITION of 'Rule 144'
A Securities and Exchange Commission rule that sets the conditions under which restricted, unregistered and control securities can be sold. These are the five conditions that must be met for these securities to be sold:
1. The prescribed holding period must be met.
2. There is an 'adequate' amount of current information available to the public regarding the historical performance of the security.
3. The amount to be sold is less than 1% of the shares outstanding and accounts for less than 1% of the average of the previous four weeks' trading volume.
4. All of the normal trading conditions that apply to any trade have been met.
5. If wishing to sell more than 500 shares or an amount worth more than $10,000, the seller must file a form with the SEC before the sale.
INVESTOPEDIA EXPLAINS 'Rule 144'
Brokers may sell restricted, unregistered and control securities, but on an 'agency' basis only. They may sell them, but can't solicit a buy order. If the seller is not associated with the company that issued the shares and has owned the securities for more than two years, the seller does not need to meet any of the five conditions and can sell the securities as they would any other.
Insider holdings that are under some other kind of sales restriction. ...
The sale of securities to a relatively small number of select ...
A rule that can be used by a company to raise funds without actually ...
The name of the person who is the registered owner of a security ...
1. The name given to securities whereby ownership is registered ...
The excess of the market value of an asset over its book value. ...