Rule 144 – A Deep Dive – Part 5 – Limitations On Amount Of Securities Sold
In this fifth installment of my series on Rule 144, I will continue discussing the various conditions for the use of the Rule, covering limitations on the amount of securities that may be sold. In the first installment, I provided a high-level review of Rule 144 – see HERE ; in the second, I discussed definitions including the impactful “affiliate” definition – see HERE; in the third I reviewed the current public information requirements – see HERE; and in the fourth I covered holding periods – see HERE.
Conditions for Use of Rule 144
General
Rule 144 provides certain conditions that must be met by selling affiliates and selling non-affiliates which conditions vary depending on whether the Issuer of the securities is a reporting or non-reporting company and whether the Issuer is or ever has been a shell company. The high-level Rule 144 requirements for non-affiliates include: (i) holding period; (ii) availability of current public information; and
F-3 Eligibility
The ability to utilize a shelf registration statement on Form F-3 or S-3 offers significant advantages to publicly traded companies. A Form F-3/S-3 allows for variably priced offerings – that is offerings made either at-the-market or at other than fixed prices. Only companies that are eligible for F-3/S-3 can complete primary (or indirect primary) offerings at prices other than a fixed price (for more on primary offerings see HERE).
I have previously written a detailed blog related to S-3 eligibility (see HERE) and although the requirements for an F-3 are substantially similar, there are some key differences due to the different regulatory framework applicable to foreign private issuers (“FPIs”) – i.e. “F Filers.” Like an S-3, F-3 eligibility is comprised of both registrant or company requirements and transaction requirements.
Moreover, like Form S-3, a Form F-3 specifies generally that the Form may not be used for an offering of asset-backed securities.
Registrant Requirements
Companies that meet the
