Practical Law Glossary Item 8-382-3779 (Approx. 2 pages)
Glossary
Rule 144
An SEC rule that provides a safe harbor for resales of restricted securities and control securities. Rule 144 under the Securities Act establishes criteria for determining whether a person is engaged in a distribution of securities. A person complying with the provisions of Rule 144 for a resale of securities is not considered an underwriter (within the meaning of Section 2(11) of the Securities Act) and can rely on the registration exemption in Section 4(a)(1) of the Securities Act for the unregistered resale of that person's securities.
Although Rule 144 purports to be a non-exclusive safe harbor, in practice, it is the primary method for an affiliate to resell securities.