This practice note discusses the rules and exemptions for reselling securities that are acquired in Rule 144A or Regulation S transactions. Rule 144A securities are restricted securities that can only be sold to qualified institutional buyers (QIBs) or under certain conditions, such as after a holding period or in compliance with Rule 144. Regulation S securities are securities that are offered and sold outside the United States and are not subject to the registration requirements of the Securities Act. Resales of Regulation S securities must comply with the offshore transaction and directed selling efforts conditions of Regulation S and may be subject to a distribution compliance period depending on the category of the securities. The practice note also explains the Section 4(a) (1½) and Section 4(a)(7) exemptions, which allow for private resales of restricted securities to accredited investors under certain circumstances.
