Rule 144A

Rule 144a

SEC rule allowing qualified institutional buyers to buy and trade unregistered securities.

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Rule 144A

A 1990 SEC rule that facilitates the resale of privately placed securities that are without SEC registration. The rule was designed to develop a more liquid and efficient institutional resale market for unregistered securities.

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Rule 144A

An administrative rule under the SEC allowing, under certain circumstances, for qualified institutional investors to trade certain securities with other institutional investors without registering the trade with the SEC. The rule requires that the private placement be for investment purposes and not for resale to the general public. These securities are traded on the NASDAQ Portal Market; only NASDAQ members who are qualified institutional investors have access to it. Some firms may trade under Rule 144A as a prelude to an IPO.

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Rule 144A. Rule 144A of the Securities Act of 1933 makes it easier for private companies to raise money in US capital markets and for institutional investors to trade restricted securities not registered with the Securities and Exchange Commission (SEC).

Specifically, the rule allows private companies, both domestic and international, to sell unregistered securities, also known as Rule 144 securities, to qualified institution buyers (QIBs) through a broker-dealer. The rule also permits QIBs to buy and sell these securities among themselves. To be a QIB, the institution must control a securities portfolio of $100 million or more.

The NASDAQ Portal Market is an electronic trading platform for Rule 144A securities. Only NASDAQ members and QIBs have access to this platform.

Companies issuing unregistered securities may raise enough capital in the 144A market to remain private. They may also use a 144A offering as an intermediary step toward an initial public offering (IPO).