Restricted Securities

Restricted Securities

The term used under Rule 144 for securities issued privately by the company, without the benefit of a registration statement. Restricted securities are subject to a holding period before they can be sold under Rule 144.

Restricted Security

A stock or right that one acquires through some means other than the open market. One may receive a restricted security through a merger or acquisition, private placement prior to an IPO, or sometimes through a stock option. A restricted security is not registered with the SEC and thus may not be sold publicly until registration has been made. It is less commonly called a letter security.
References in periodicals archive ?
Securities Act will be 'restricted securities' as defined under Rule 144(a)(3) of the U.S.
The Consulting Shares were restricted securities that could not be resold, except under limited circumstances."
(56) Holders of restricted securities must either register
Temporary suspension of restricted securities should be 10 percent instead of 5 percent, it added.
All securities issued pursuant to the Private Placement are subject to a hold period under applicable Canadian securities laws, which will expire four months plus one day from the date of closing of the Private Placement, and will be restricted securities for purposes of U.S.
The SEC alleges that Wilson provided at least five opinion letters that unlawfully allowed restricted securities of at least three issuers to be sold to the public.
The company also closed on a simultaneous private sale of investment units comprised of restricted securities to accredited investors, majority of whom are early investors in Myomo, for total proceeds of USD 2.9m.
Additionally, the company stated that the purchase agreement is subject to the satisfaction of customary closing conditions and the sale will close within three months from the date of the agreement and the shares being restricted securities, purchasers are also subject to a lock-up provision that prevents any transfer, sale or disposition of the bought shares.
Securities sold through this method aren't restricted securities but are subject to state registration and qualification requirements.
Like all Regulation D offering, purchasers in Rule 506(c) offerings acquire restricted securities. The securities purchased in a Regulation D private placement are not freely saleable, such as securities purchased in a public offering, and the resale restrictions of the restricted securities are governed by Rule 144 of the Securities Act of 1933.
The bill further provides that the securities may be offered and sold publicly and that the securities shall not be restricted securities within the meaning of the Federal securities laws.
A notice of the proposed sale of restricted securities or control securities under Rule 144 that must be filed with the SEC.

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