restricted security

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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

restricted security

A security that has not been registered with the SEC and therefore may not be sold publicly. These securities frequently enter portfolios of institutional investors through private placements and are sometimes registered at a later date. Also called letter bond, letter security, letter stock, unregistered security.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Restricted security.

Restricted securities are stocks or warrants that you acquire privately, through stock options or a corporate merger, rather than by buying them in the open market.

For example, you may receive restricted stock if you put money into a startup company.

If the company has not yet registered with the Securities and Exchange Commission (SEC) for an initial public offering (IPO), its securities cannot be transferred or resold until the issuing company meets the SEC registration requirements for publicly traded securities.

If you exercise stock options and buy stock at a reduced price, you may be required to hold those stocks for a period of time before liquidating them.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
This comes after Raisio's board decided in its meeting held on 22 August 2019 to convert a total of 90,000 restricted shares (series K) into free shares (series V).
The 9,360,000 ordinary shares of ATA issued as consideration to ArtsCL are restricted shares and shall not be sold without prior written approval from ATA's Board of Directors.
also provided an update relating to its prior offer to purchase restricted shares in a transaction value at USD 0.62 per share.
BANKING AND CREDIT NEWS-April 20, 2015-Bayside retires 700m restricted shares back into its treasury
Exercisable options and restricted shares are generally not included.
The existing shareholders of RAK Petroleum will be allotted restricted shares and an associated number of founder shares in RAK Petroleum corresponding to 90 per cent of their shareholding in RAK Petroleum, with the remaining 10 per cent to be allotted in unrestricted shares.
(OTCBB: PWVI), a company that manufactures advanced renewable electric power generator systems comprised of pressure expansion motors, operating on any adequate heat or pressure source, has completed a private offering of 500,000 restricted shares of its common stock to certain accredited European investors.
Lightyear's debt holders, comprised of the company's owners, released it from approximately USD26m in short and long-term liabilities in exchange 10m restricted shares of Libra's common stock to be issued immediately and 9.5m restricted shares of Libra's convertible preferred stock to be issued shortly after the closing.
83 to an employee's conversion or exchange of "fully vested" or "unrestricted" shares for restricted shares has been unclear.
We also use the number of restricted shares sold during the two years following the IPO as a general proxy for pre-IPO investors selling intentions, and find that post-IPO stock sales are strongly related to the listing decision and are higher for firms that choose Nasdaq.
It is only the employment-related stock options or restricted shares that are subject to the Ruberg/Parry methodology.

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