[author: Amber Bouie1]
Securities Act Rule 144 provides a “safe harbor” from the registration (but not the antifraud) provisions of the Securities Act of 1933, as amended (“Securities Act”), for resales of two types of securities: “restricted securities” and “control securities.” The rule provides that if all applicable conditions are met, a seller of restricted or control securities will be deemed not to be an “underwriter” and, therefore, should qualify for the Securities Act Section 4(a)(1) exemption from registration. One of the applicable conditions for Rule 144 is the filing of Form 144 “concurrently” with placing the order to sell.
In June of 2022, the SEC adopted rule amendments which now require Form 144 to be filed electronically, eliminating the paper filing option. The electronic filing requirement applies to the sale of securities of an issuer subject to the reporting requirements under Section 13 or 15(d) of the Securities Exchange Act of 1934. Form 144 filings for the sale of the securities of non-reporting companies will still be reported exclusively in paper.
The goal of electronic filing is to eliminate paper filing and make the filing of Form 144 more efficient using the EDGAR system. Although EDGAR has been around since 1993, the transition from paper to fully online filing continues. Starting April 13, 2023, Form 144 must be filed electronically via EDGAR. Importantly, as part of the amendments, the SEC extended the window for filing Form 144. As of March 20, 2023, a Form 144 submission can be made from 6 a.m. – 10 p.m. (Eastern Time) and still be considered to be filed the same business day.
In the past, Form 144 was typically submitted by brokers who executed such transactions on behalf of their customer/filer. Importantly, in order to file a Form 144 via EDGAR, a filer must apply for and obtain filing codes from the SEC, which are necessary for submitting documents to the SEC on EDGAR.
For more information about Form 144 and the newly required electronic filing please visit https://www.sec.gov/edgar/filer-information/form-144-resources-filing-electronically
Notes:
[1] Amber Bouie is a candidate for Juris Doctorate (2024) at the Arizona State University Sandra Day O’Conner College of Law. Ms. Bouie is not admitted to practice law.
