SEC adopts amendments to rules 144 and 145

On Nov 15, 2007, the Securities and Exchange Commission shortened the holding period under Securities Act of 1933 Rule 144 and substantially eliminated the presumptive underwriter doctrine in Rule 145. Although these amendments further the SEC's stated objective of decreasing the cost of capita...

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Bibliographic Details
Published in:Insights (Clifton, N.J.) N.J.), 2008-01, Vol.22 (1), p.8
Main Authors: Higgins, Keith F, Holden, Thomas, Kinsella, Paul M
Format: Article
Language:English
Subjects:
Affiliates
Amendments
Compliance
Cost of capital
Equity
Hedging
Impact analysis
Interest rates
Investments
Private placement
Registration statements
Regulation D
Regulation of financial institutions
Regulatory reform
Restrictions
SEC 33
Secondary markets
Venture capital companies
Warrants
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Summary:On Nov 15, 2007, the Securities and Exchange Commission shortened the holding period under Securities Act of 1933 Rule 144 and substantially eliminated the presumptive underwriter doctrine in Rule 145. Although these amendments further the SEC's stated objective of decreasing the cost of capital, particularly for smaller companies, the changes also will have significant implications for companies, typically larger ones, that issue securities in the Rule 144A market and for public companies that issue securities in business combination transactions registered on Form S-4. Given the dramatic difference in the treatment of affiliates versus non-affiliates, the new rules will create increased pressure on the determination of affiliate status. The amendments, however, provide no additional guidance on such determinations, and the SEC staff does not assist issuers or investors in making those judgments. The amended rules explicitly address resales of both restricted and unrestricted securities by former affiliates whose status changed within the 90 days before the sale.
ISSN:0894-3524