What is SEC Form 144?
Form 144is a mandatory SEC filing for those intending to sell restricted or control securities. Restricted securities stem from private sales, whereas control securities belong to affiliates such as directors or large shareholders. The fundamental objective of this filing is to notify the SEC and the public about these sales.
Relation to SEC and EDGAR filing
The SEC mandates the electronic filing of Form 144 on its EDGAR system in XML format.1Previously, 144 was permitted to file with the SEC in paper or via email.
Who is required to file Form 144?
The following individuals or entities mustfile Form 144if selling restricted or control securities:
- Corporate insiders (similar to Section 16 insiders) subject to the reporting requirements of section 13 or 15(d) of the Exchange Act, which includes:
- Directors
- Officers
- Shareholders owning over 10% of outstanding shares
- Affiliates of an issuer (those with control or under common control), such as:
- Household-sharing relatives or spouse
- Trusts or estates with 10% or more beneficial interest
- Corporations or organizations with 10% or more equity interest
When is the deadline to file Form 144?
Securitiesmust be held for a minimum of 6 consecutive months prior to being sold (time may include the initial purchase date for any gifted securities2). Over a three-month period, if the sales of restricted or control securities exceed 5,000 shares, or has an aggregate sale price in excess of $50,000, you are required to file Form 144 if you plan to sell additional securities.
Filers cannot exceed sales of more than 1% of the total number of outstanding securities.3
Filing Form 144 on EDGAR
With the transition to XML format, the EDGAR requirements for each field have become more restricted.
The following must be considered when filing on EDGAR:
- Securities to be sold:You must have held and/or paid for the shares for at least 10 calendar days prior to filing
- Securities sold in the past three months:You cannot list any securities that were sold in the past 10 calendar days or securities that were sold more than 9 months in the past.
- Date of Notice:When signing the form, the date of notice cannot exceed 10 calendar days. All dates must be a single date. Date ranges are not allowed.
- Form 144 will receive the same days filing date if filed by 10 PM ET.4
This comprehensive IRS guide onForm 144 electronic filingsclarifies requirements and addresses both common and intricate concerns. With this knowledge, you can more confidently manage Form 144 requirements while obtaining industry-level expertise.
Toppan Merrill is here to assist you with your EDGAR filing and compliance needs, with experts who know precisely what’s needed to keep your business ahead of the SEC’s ever-changing disclosure requirements. Learn more about our SEC Connect platform that helps you file easily online.
Additional References:
SEC FORM 144: https://www.sec.gov/files/form144.pdf
SEC FORM 144 Resources: https://www.toppanmerrill.com/form-144-resources/
1SEC Rule: Updating EDGAR Filing Requirements and Form 144 Filings:
https://www.federalregister.gov/documents/2022/06/10/2022-12253/updating-edgar-filing-requirements-and-form-144-filings
2§ 230.144 Persons deemed not to be engaged in a distribution and therefore not underwriters. Gift of Securities:https://www.ecfr.gov/current/title-17/chapter-II/part-230/section-230.144#p-230.144(d)(3)(v)
3SEC Investor Publications: Rule 144: Selling Restricted and Control Securities:https://www.sec.gov/reportspubs/investor-publications/investorpubsrule144
4SEC Rule: Extending Form 144 EDGAR Filing Hours:https://www.federalregister.gov/documents/2023/02/27/2023-03931/extending-form-144-edgar-filing-hours
FAQs
This Form must be filed with the SEC by an affiliate of the issuer as a notice of the proposed sale of securities in reliance on Rule 144 , when the amount to be sold under Rule 144 by the affiliate during any three-month period exceeds 5,000 shares or units or has an aggregate sales price in excess of $50,000.
What is a Rule 144 filing? ›
SEC Form 144: Notice of Proposed Sale of Securities is filed with the Securities and Exchange Commission or SEC when placing an order to sell that company's stock under specific circ*mstances.
How to file Form 144 online? ›
A reporting person, as defined by Rule 144(a)(2) of the Securities Act of 1933, who is required to file Form 144 electronically, must have an account on the SEC's EDGAR system. To obtain an EDGAR account, a Form ID application for EDGAR access must be completed online, signed and notarized, and submitted to the SEC.
What is the Rule 144 exemption? ›
Rule 144 provides an exemption and permits the public resale of restricted or control securities if a number of conditions are met, including how long the securities are held, the way in which they are sold, and the amount that can be sold at any one time.
How long does it take to file Form 144? ›
The deadline for a Form 144 is by 10 p.m. on the day the affiliate places their order to sell stock.
What is the difference between form 4 and Form 144? ›
Insiders are members of a company's board, key executives (including the principal executive officer and principal accounting officer), and 10% shareholders. These are the people and entities who must file Form 4s. Form 144s are filed by insiders and by others.
Can you amend a Form 144? ›
A Form 144 initially filed in paper format can be amended by filing a new, electronic Form 144.
What is the Rule 144 affiliate? ›
Explanation of Affiliates
Rule 144 at (a)(1) defines an “affiliate” of an issuing company as a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such issuer.”
What is the rule of 144 example? ›
Rule of 144 tells you how much time will it take for your amount deposited in a scheme to quadruple. Suppose you are investing in a scheme which is giving interest at the rate of 6 per cent, then 144/6 = 24, i.e., your amount will become four times in 24 years.
What is SEC adopting release Rule 144? ›
On June 2, 2022 the Securities and Exchange Commission (SEC) adopted rule amendments that will require all Forms 144 to be filed electronically on EDGAR, rather than mailing a traditional paper filing or utilizing the option first offered in April 2020 (due to the COVID-19 pandemic) of filing a PDF copy via email.
Rule 144 requires restricted stock to be held by its investors for 6 months before resale. After this time period, the investor can sell their shares.
What is the filing threshold for Form 114? ›
This form should be used to report a financial interest in, signature authority, or other authority over one or more financial accounts in foreign countries, as required by the Department of the Treasury Regulations 31 CFR 1010.350 . No report is required if the aggregate value of the accounts did not exceed $10,000.
What is the time limit for best Judgement assessment under section 144? ›
What is the time limit for Section 144? Section 153 of Income Tax Act specifies the time limit to complete an assessment under Section 144. The duration is 21, 18, 12 or 9 months from the end of a fiscal year in which your income was originally assessed.
What are the filing thresholds for 1099? ›
For 1099-K forms, the IRS requires filing if, in a calendar year, the gross amount of total reportable payments exceeds $20,000 and there are more than 200 transactions.
What is required to sell 144 stock? ›
Notice of proposed sale requirement
All affiliates are required to file a Form 144, notifying the SEC if the sale of securities within any three-month period exceeds either 5,000 shares or a total dollar amount of $50,000.
