This practice note discusses the rules and exemptions for reselling securities that are acquired in Rule 144A or Regulation S transactions. Rule 144A securities are restricted securities that can only be sold to qualified institutional buyers (QIBs) or under certain conditions, such as after a holding period or in compliance with Rule 144. Regulation S securities are securities that are offered and sold outside the United States and are not subject to the registration requirements of the Securities Act. Resales of Regulation S securities must comply with the offshore transaction and directed selling efforts conditions of Regulation S and may be subject to a distribution compliance period depending on the category of the securities. The practice note also explains the Section 4(a) (1½) and Section 4(a)(7) exemptions, which allow for private resales of restricted securities to accredited investors under certain circumstances.
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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
