Resale of Restricted and Control Securities

What this video covers

• The difference between restricted securities (acquired in unregistered private sales) and control securities (held by affiliates such as officers, directors, or 10%+ shareholders)
• Why holding periods exist: to prevent disguised public distributions and force real investment risk, with six months for reporting issuers and one year for non-reporting issuers
• How tacking works so prior holding time counts after an affiliate resigns or otherwise loses affiliate status
• The volume limit formula for affiliates: the greater of 1% of outstanding shares or average weekly trading volume over the prior four weeks, measured per rolling three-month period
• Why the 5,000-share or $50,000 threshold is solely a Form 144 filing trigger, not a sales ceiling, and how Form 144 notifies rather than requests SEC approval
• The manner-of-sale requirement that affiliate resales go through routine broker transactions or directly with a market maker
• The QIB resale path: no holding period for the QIB purchaser, $100 million threshold for most institutions, $10 million for broker dealers, and $25 million plus net worth test for banks and savings institutions
• Why securities from registered transactions (mergers, tender offers, employee benefit plans) are freely tradable but still subject to volume limits if held by an affiliate