Rule 144a - sustany/dvg GitHub Wiki

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.�

Generally, under Rule 506 of Regulation D, purchasers of securities issued in a private placement may not resell their securities. Rule 144A allows purchasers of such securities to resell those securities if: (1) the sale is to a qualified institutional buyer (QIB); (2) the seller takes affirmative steps to ensure that the buyer is aware that the seller relies on Rule 144A to sell their security; (3) the securities are not of the same class as securities traded on a national securities exchange; and (4) the purchaser has the right to request information from the original issuer of the security.�

Rule 144A makes issuing large quantities of securities in private placements under Rule 506 more attractive because it increases the liquidity of those securities sold in a private placement. That is, since the institutional investors who initially purchased the issuer�s securities in a private placement can sell to a broader group of prospective secondary purchasers under Rule 144A, it makes private placements more attractive.�