Rule 144 vs 144A

Rule 144A, which limits resales only to QIBs, and Rule 144A is only available in respect of certain securities. Rule 144, pursuant to which resales can only be made in compliance with the holding period, volume and manner of sale requirements.

What does Rule 144A allow?

Rule 144A (formally 17 CFR § 230.144A) is a Securities Exchange Commission (SEC) regulation that enables purchasers of securities in a private placement to resell their securities to qualified institutional buyers (QIBs) under certain conditions.

Who can sell under Rule 144?

Rule 144 allows persons who hold restricted stock and affiliates to sell or transfer their shares without having to comply with the registration or prospectus delivery requirements of the Securities Act of 1933.

Who can trade Rule 144A issues?

The SEC allows only qualified institutional buyers (QIBs) to trade Rule 144A securities. These institutions are large sophisticated or ganizations with the primary responsibility of managing large investment portfolios with at least $100 million in securities. Appendix A provides the SEC definition of QIB.

Can a security be both Reg S and 144A?

If 144A covers the U.S. or American citizenry (it restricts the investor to only U.S. investors), the Reg S covers everything outside the U.S. It is common for companies to issue both 144A and Reg S securities.