Rule 144 imposes volume limitations on the number of shares that can be sold by Quizlet

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A 144A offering

Rule 144A permits the sale by an issuer of an unlimited dollar amount of restricted securities to qualified institutional buyers (QIBs). Investors, generally, must pass a three-part test in order to be considered QIBs. (1) Only certain types of institutions are eligible, including insurance companies, registered investment companies, pension plans, corporations, and registered investment advisers. (2) The buyer must be purchasing for its own account or the account of other QIBs. (3) The buyer must own and invest at least $100 million of securities of issuers not affiliated with the buyer. According to Regulation S, a U.S. company may (quickly) issue an unlimited amount of securities outside the country without filing any documentation with the SEC. Regulation S offerings are not applicable when offering securities to U.S. investors. The maximum size of an offering under a Regulation A exemption is $5,000,000. Offerings of ADRs sold in the U.S. must be registered with the SEC.

II and IV

Rule 504 of Regulation D allows an issuer to offer securities of up to $1,000,000 within a 12-month period. Provided the issuer complies with all the provisions of Regulation D, this private placement is exempt from SEC registration. There are three types of issuers that are not permitted to use this exemption: a company subject to the SEC's reporting requirements (a reporting company), an investment company, and a development stage company that has no specific business plan or purpose (e.g., a blank check company). In addition, the issuer is not required to provide a disclosure document under Rule 504. Under Regulation D, if the issuer offers securities exceeding $1,000,000, any nonaccredited investor must receive a disclosure document. The SEC does, however, recommend that an issuer provide the same information to accredited investors to avoid the antifraud provisions of federal securities regulations

Which of the following statements is TRUE regarding a private placement of securities under Regulation D?

- If the offering does not exceed $1,000,000, the issuer is not required to file a Form D.
- If the offering exceeds $1,000,000, the issuer is required to provide a disclosure document only to nonaccredited investors.
- If the initial offering does not exceed $1,000,000, and the issuer sells additional securities within 12 months, the additional offering of securities would not be exempt from registration.
- If the offering does not exceed $1,000,000 and the issuer meets certain conditions, the holding period on the securities is three months.

If the offering exceeds $1,000,000, the issuer is required to provide a disclosure document only to nonaccredited investors.

Rule 504 of Regulation D allows an issuer to offer securities of up to $1,000,000 in a 12-month period. Provided the issuer complies with all the provisions of Regulation D, this private placement is exempt from SEC registration. The issuer is still required to file Form D with the SEC no later than 15 days after the first sale of securities. Under Regulation D, if the issuer offers securities exceeding $1,000,000, any nonaccredited investor must receive a disclosure document. The SEC does, however, recommend that an issuer provide the same information to accredited investors to avoid the antifraud provisions of federal securities regulations.

If the initial offering does not exceed $1,000,000 and the issuer sells additional securities within 12 months, these securities may be exempt from registration. For example, an issuer offers $1,000,000 and 5 months later offers another $3,000,000. The first offering could be sold under Rule 504 and the second offering could be sold under Rule 505 (private exempt offerings not exceeding $5,000,000). If the offering does not exceed $1,000,000 and the issuer meets certain conditions, investors may resell the securities immediately. The conditions are generally based on registration and exemption requirements of the states in which the issuer is offering the securities.

What is a Rule 144 restriction?

How does restricted stock differ from control stock in a Rule 144?

What limit is placed on the number of outstanding shares a mutual fund may have?

Which of the following sell transactions is not subject to the holding period restriction specified in SEC Rule 144 quizlet?