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This term is a bit of a misnomer since Rule 144A applies only to resales of securities and cannot be used by an issuer.
However, this term is generally used to refer to an offering that takes two steps:
First, an issuer private placement of securities (primarily debt, for US issuers) to one or more investment banks or broker-dealers called initial purchasers under Section 4(a)(2) or Regulation D.
Second, the concurrent resales of those securities by the initial purchasers to qualified institutional buyers under Rule 144A.
In these resale transactions, the initial purchasers act in substantially the same role as the underwriters of an SEC-registered offering.
This Form must be filed with the SEC by an affiliate of the issuer as a notice of the proposed sale of securities in reliance on Rule 144, when the amount to be sold under Rule 144 by the affiliate during any three-month period exceeds 5,000 shares or units or has an aggregate sales price in excess of $50,000. A person filing a Form 144 must have a bona fide intention to sell the securities referred to in the Form within a reasonable time after the filing of the Form.
Although the SEC does not require that the Form be sent electronically to the SEC’s EDGAR database, some filers choose to do so. You can learn how to use EDGAR to find the Form.
For more information, please read "Rule 144" in our Fast Answers databank.
