Rule 144A

Loading the player...

What is the 'Rule 144A'

A Securities & Exchange Commission rule modifying a two-year holding period requirement on privately placed securities to permit qualified institutional buyers to trade these positions among themselves.

BREAKING DOWN 'Rule 144A'

This has substantially increased the liquidity of the securities affected because institutions can trade these securities amongst themselves, side-stepping limitations that are imposed to protect the public.

RELATED TERMS
  1. Securities Exchange Act Of 1934

    The Securities Exchange Act of 1934 was created to provide governance ...
  2. Private Company

    A company whose ownership is private. As a result, it does not ...
  3. Institutional Investor

    A non-bank person or organization that trades securities in large ...
  4. Security

    A financial instrument that represents an ownership position ...
  5. 3C7

    A portion of the Investment Company Act of 1940 that permits ...
  6. Shelf Offering

    A Securities and Exchange Commission (SEC) provision that allows ...
Related Articles
  1. Term

    Understanding Rule 144A

    Rule 144A is an SEC rule that changes the two-year holding period requirement on privately placed securities.
  2. Investing

    Institutional Investors

    Learn more about the advantages that financial institutions enjoy when buying and selling securities.
  3. Credit & Loans

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.
  4. Trading Strategies

    What is the Difference Between Institutional Traders and Retail Traders?

    The differences between retail and institutional traders lie in the size of the trade, level of sophistication, and the speed of transactions.
  5. Investing Basics

    What's an Exchange?

    An exchange is an organized marketplace where securities and other financial instruments are traded.
  6. Investing Basics

    How To Invest In Private Companies

    It can be tough to invest in a company that doesn't trade on an exchange, but there are also several advantages.
  7. Investing Basics

    What's the Primary Market?

    The primary markets are where investors can get first crack at a new security issuance.
  8. Economics

    Volcker Rule: How It Will Affect You

    Learn how the Volcker Rule has a limited impact on individual investors but restricts the types of activities in which banks can engage.
  9. Investing

    Trading Over the Counter

    OTC trades tend to be for smaller company stocks and debt securities. Debt securities such as bonds are generally traded by investment banks making markets for specific issues.
  10. Active Trading

    What's a Marketable Security?

    Marketable securities are financial instruments that can be readily bought and sold in a public market. The key feature is the ease with which it can be sold and converted into cash. Usually, ...
RELATED FAQS
  1. The SEC's Rule 144

    A. regulates public resale of privately placed securities. B. regulates private placement of unregistered securities.C. defines ... Read Answer >>
  2. What are the characteristics of a marketable security?

    Find out what it takes for a financial asset to be considered a marketable security, including its liquidity, intent of use ... Read Answer >>
  3. What's the difference between primary and secondary capital markets?

    Learn how in the primary capital market, securities are issued for the first time, while in the secondary market, investors ... Read Answer >>
  4. What's the difference between institutional and non-institutional investors?

    There are a number of differences between institutional investors and non-institutional investors. If you are considering ... Read Answer >>
  5. How is trading volume regulated by the Securities and Exchange Commission (SEC)?

    Learn about how the SEC uses the trading volume formula as one requirement for an exemption to the ban on the resale of restricted ... Read Answer >>
  6. A company I recently looked up showed institutional holdings of more than 100%. How ...

    It is obviously not technically possible for any shareholder or category of shareholder to hold more than 100% of a company's ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center