SEC Form 144: Notice of Proposed Sale of Securities Overview

2011 U.S. Debt Ceiling Crisis

What is Form SEC 144: Notice of Proposed Sale of Securities?

A senior executive, director or affiliate of a company must file Form SEC 144: Notice of Proposed Sale of Securities with the Securities and Exchange Commission or SEC when placing an order to sell the shares of that company in any three month period in which the sale exceeds 5,000 shares or units or has an aggregate sale price greater than $ 50,000. This is also known as rule 144.

Who Can File SEC Form 144: Proposed Securities Sale Notice?

According to the SEC website, the party filing the Form 144 must have a genuine intention to sell the securities mentioned in the Form 144 within a reasonable time after the filing.

Since the sales covered by Form 144 are often very close to the interests of the issuing company, registrants sometimes have to register securities under section 5 of the Securities Act of 1933. If the correct conditions are met, the rule 144 may provide for an exemption and allow the public resale of securities subject to restrictions or control. However, all parties must obtain a transfer agent to remove the legend from the securities before the sale.

The SEC 144 form can be filed on paper or electronically.

How to File Form SEC 144: Notice of Proposed Sale of Securities

Form 144 must be filed with the SEC by an affiliate of the issuer as a notice of proposed sale of securities under rule 144, when the amount to be sold under rule 144 by the affiliate over a three month period exceeds 5,000 shares. or units or has an aggregate sale price greater than $ 50,000. A person who files a Form 144 must have the good faith intention to sell the securities mentioned on the form within a reasonable time after the form is filed. Although the SEC does not require that the form be sent electronically to the SEC’s EDGAR database, some registrants choose to do so.

Other relevant forms

In addition to From 144, the essential SEC filing forms include S-1 and S-1 / A (registration statements), 10-K and 10-Q (annual and quarterly reports, respectively), SEC Form 4 ( reporting of changes in beneficial ownership of securities), 12b-25 (late filing notification), 15 (certification and notice of termination of registration under section 12 (g) or suspension of obligation to file reports under Articles 13 and 15 (d)), ABS 150G (Asset-Backed Securitizer Report), and several others. A complete list, along with downloadable descriptions and forms, is available on the SEC’s website.

Form 144 and blocking agreement

A freeze agreement is a legally binding contract between the underwriters and the insiders that prohibits individuals from selling shares for a specified period of time. Isolation periods generally last 180 days (six months) but can sometimes last as little as 120 days or as long as 365 days (one year). The Underwriters Will Ask Business Executives, Managers, Employees And Venture Capital Investors To Sign Freezing Agreements Around A Company’s Initial Public Offering To Encourage An Element stability of the share price during the first months of trading.

Example from the real world

On April 26, 2020, Lee Kirk, director of Guaranty Bancshares, Inc., filed a request to sell 20,891 shares of the company for an aggregate market value of $ 686,889.08 on the NASDAQ stock exchange. The approximate date of the sale has been set for the period from 04/27/18 to 12/12/18. Additional information on Form 144 for individuals may include a physical address, an IRS number, the nature of the payment, and similar additional sales in the past few months.

Download form SEC 144: Notice of proposed sale of securities

Here is a link to a downloadable SEC 144 form: Notice of proposed sale of securities.

Key points to remember

  • Rule 144 states that Form 144 must be filed with the SEC when placing an order to sell shares in that company during any three-month period in which the sale exceeds 5,000 shares or units or has an overall sale price greater than $ 50,000.
  • The party filing the Form 144 must have the good faith intention to sell the securities mentioned in the form within a reasonable time after the completion.
  • Since the sales covered by Form 144 are often very close to the interests of the issuing company, registrants sometimes have to register securities under section 5 of the Securities Act of 1933.

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