SIE practice questionhardRule 144 — Restricted Securities
Under SEC Rule 144, restricted securities acquired in a private placement by a non-affiliate may generally be resold in the public market after a holding period of:
- AThere is no holding period for restricted securities
- B30 days
- C3 years
- D6 months, if the issuer is a reporting company✓ Correct answer
Explanation
Why D — 6 months, if the issuer is a reporting company
Rule 144 allows restricted securities to be resold publicly after a holding period. For non-affiliates of SEC-reporting companies, the holding period is 6 months (after which they can sell with no volume or manner-of-sale restrictions if the issuer is current in its reporting). For non-reporting companies, the holding period is 1 year. Affiliates (insiders) face additional volume limitations and must file Form 144. This rule provides liquidity for privately placed securities.
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