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Rule 144a: Private Resales of Securities to Institutions
Rule 144a applies to qualified institutional buyers (QIB), business entities that hold at least $100 million dollars in investable assets, selling restricted securities to another QIB. Restricted securities, purchased from unregistered sales, are acquired from private placement offerings not public offerings, Regulation D offerings, employee stock benefit plans, or company stock exchanged to raise initial capital. Exemptions to sell restricted securities will apply if the following conditions are met: • A QIB can only offer or sell securities to another QIB • The QIB selling must notify buyer of exemptions from the provisions of section 5 (placing restrictions on selling restricted securities), available if requirements in this section are followed • The securities offered or sold: o Must not be listed on a national securities exchange registered under section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer system o Must not offer securities of an open-end investment company, unit investment trust, or face-amount certificate company registered under Section 8 of the Investment Company Act • The seller must provide a brief summary of its business operations, most recent balance sheet, statements of profit and loss, retained earnings statements, and similar financial statements from the past two fiscal years. All documents must be reasonably current: o Balance sheet is dated less than 16 months before date of resale o Statements of profit and loss and retained earnings are for the 12 months prior to the date of the balance sheet o If balance sheet is less than 6 months old, it must be accompanied by additional statements of profit and loss and retained earnings from a date less than 6 months before resale |
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