Significant Impacts on Securities and M&A Transactions Expected from Rule 144/Rule 145 Changes.
At yesterday’s open meeting, the SEC adopted significant changes to Rule 144 and Rule 145. The amendments were adopted largely as proposed and will be effective 60 days after publication in the Federal Register (www.sec.gov/news/press/2007/2007-233.htm).
Among other changes, the amendments to Rule 144 will:
- shorten the holding period for restricted securities of reporting companies to six months; and
- allow non-affiliates of reporting companies to freely resell restricted securities after satisfying a six-month holding period and allow non-affiliates of non-reporting companies to freely resell restricted securities after satisfying a 12-month holding period.
- eliminate the presumptive underwriter provision, except with respect to transactions involving blank check or shell companies; and
- revise the resale provisions of Rule 145(d).
All of these changes should make capital raising and acquisition transactions easier and less costly.
