What is Rule 144 primarily related to?

Rule 144 is primarily concerned with the sales of restricted and control securities. This regulation under the Securities Act of 1933 provides a safe harbor for the resale of securities that are not registered, which occurs primarily in the context of private placements.

Restricted securities are those acquired in unregistered, private sales from the issuing company or an affiliate, while control securities are held by an affiliate of the issuing company, who typically has a significant influence over the company. Rule 144 establishes conditions under which these securities can be sold openly in the market, thus facilitating liquidity. It includes requirements like holding periods, volume limitations, and the necessity of filing a notice with the SEC if the amount sold exceeds a certain threshold.

The regulation aims to provide a balance between the need for liquidity in the securities market and the protection of the investing public, ensuring that adequate information is available about the issuer when these securities are sold. This focus on the nature and process of selling these types of securities distinguishes Rule 144 as a critical component of securities regulation.