Rule 144

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.

Notes:

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.

See also: Holder of Record, Private Placement, Registered Security, Restricted Stock

---

Rule 144

Restricts solicitation of buyers to complete the sell order of an insider (unless the firm is already a buyer); signified by a flashing "E" on Quotron.

---

Rule 144

An SEC rule that permits a corporate executive who owns a large amount of his or her firm's stock that has not been bought in the open market to sell a portion of the stock every six months following a holding period of two years without having to file a formal registration statement with the SEC.