Which of the following is NOT a control security according to Rule 144?

The correct answer is that securities held by underwriters are not considered control securities under Rule 144. Control securities are defined as those held by affiliates of the issuer, such as corporate insiders, board members, or individuals owning substantial amounts of voting shares (typically 10% or more). These types of securities are subject to specific holding periods and volume limitations when being sold to ensure that the market is not overwhelmed by large quantities of stock being dumped into the market at once.

Underwriters, however, are not considered affiliates for the purposes of Rule 144, as their role is primarily as intermediaries between issuers and investors during the sale of securities, rather than as stakeholders in the company itself. Therefore, the securities they hold in connection with their underwriting activities do not fall under the same regulatory constraints as control securities because they do not have the same potential to exert influence over the issuer or its share structure.

This distinction is important as it affects the ability to sell or transfer the securities without being subject to the limitations imposed on control securities.