THE SEC FINALIZES MAJOR CHANGES TO RULE 144

January, 2008

The Securities and Exchange Commission, in November of 2007, made final its proposals for revisions to Rule 144 of the Securities Act. The amendments significantly liberalize Rule 144, particularly with respect to sales made by non-affiliates of shares of reporting issuers. For a full discussion of the ins-and-outs of Rule 144, as amended, see here .

In essence, the amendments accomplished the following:

*Reduced Holding Period . The holding period for non-affiliates holding securities in a reporting company was reduced from one year to six months.
*Elimination of Form 144 . Non-affiliates need no longer prepare and file Form 144 when making sales of restricted securities under Rule 144.
*Elimination of “Manner of Sale” Provisions. Non-affiliates need no longer heed the manner of sale provisions (i.e., sales only in a brokered transaction).
*Elimination of Volume Limitations. Non-affiliates need no longer heed the volume limitations.

Despite these changes, the “current public information” requirement remains in place under the amended rules. Furthermore, most of Rule 144’s requirements still apply to affiliates, although affiliates do benefit from the reduced holding period, and the thresholds for the filing of Rule 144 were raised to a generous $50,000/5,000 share limit.

The changes become effective on February 15, 2008.

The full description of the final rule can be read here .

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