Rule 144 – A Deep Dive – Part 2 – Definitions
Last week I published a high-level review of Rule 144 – see HERE. This week, I will begin the deep dive discussion of the numerous intricacies of this very important rule, starting with definitions.
Rule 144 Definitions
Rule 144 only has four definitions, but there is a lot to discuss on each of these definitions.
Affiliate
Rule 144 sets forth different conditions for sellers that are “affiliates” or a person that has been an affiliate in the past 90 days then for those that are non-affiliates. Sales by affiliates always require that a company have current public information, are subject to volume limitations (the drip rules), are subject to manner of sale requirements (sales must be made through a broker-dealer) and require the filing of a Form 144. Sales by non-affiliates only require current public information when effectuated after six months but prior to a one year holding period and are never subject to the volume limitations,