SIE practice questionhardRule 144 — Volume Limitations
Under Rule 144, an affiliate selling restricted securities of a reporting company must limit sales during any 90-day period to the greater of:
- A1% of shares outstanding or the average weekly trading volume over the prior 4 weeks✓ Correct answer
- B10% of shares outstanding or the average daily trading volume over the prior 30 days
- C5% of shares outstanding or the average monthly trading volume over the prior 4 months
- D1% of shares outstanding or the average weekly trading volume over the prior 2 weeks
Explanation
Why A — 1% of shares outstanding or the average weekly trading volume over the prior 4 weeks
Rule 144 limits affiliate sales to the greater of 1% of the outstanding shares OR the average weekly reported trading volume during the 4 calendar weeks preceding the filing of Form 144. This volume limitation helps prevent affiliates from flooding the market and depressing the stock price.
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