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 ?
Concurrent with the completion of the offering, Check-Cap plans to complete an additional financing of USD 12m in a private placement of restricted securities.
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.
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.
Mr Hodgson continued: 'This Memorandum is helpful in that it provides a potential safe harbour from the application of the provisions on restricted securities, if all of a number of conditions are satisfied.
Late last year, Tricord closed a $3m private placement of restricted securities and warrants, with Rod Canion, founder and former chief executive of Compaq Computer Corp, as the lead investor in the funding.
5) In a study of four funds that specialize in restricted securities investments from 1968 through 1970, Gelman finds both a mean and median discount from market value of 33% for letter stock purchases from 89 publicly traded companies.
Restricted securities represent those that are exempt from SEC registration requirements and cannot, therefore, be released into the public trading markets.
The Fund is subject to financial services sector risk, restricted securities risk, credit risk, interest rate risk, and call risk, among others.
If the exchange is unregistered, however, the REIT Shares are restricted securities so that reliance on Securities Act Rule 144 is needed to establish the exemption for public resales of the shares.

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