Restricted Stock and Resale Restrictions
Chapters in this video
- 0:00 Restricted securities vs. control securities: Carl and Iris
- 1:13 The restricted-stock resale rule holding period
- 2:00 Why reporting issuers get 6 months and non-reporting get 12
- 2:41 Affiliate volume limits survive the holding period
- 3:08 The greater-of formula: 1% outstanding or 4-week average weekly trading volume
- 3:45 Form 144 triggers: 5,000 shares or $50,000 in 3 months
- 4:23 QIB resale safe harbor: the institutional fast pass
- 5:38 Rapid-fire exam recap
What this video covers
- Why the holding period is 6 months for Securities and Exchange Commission (SEC) reporting issuers and 12 months for non-reporting issuers
- What current public information means and why it matters for non-affiliates between months 6 and 12
- How to calculate the affiliate volume limit: the greater of 1% of outstanding shares or average weekly trading volume over the prior 4 weeks
- When Form 144 must be filed: 5,000 shares or $50,000 in any rolling 3-month period
- Why affiliates never escape volume limits and filing requirements, even after the holding period expires
- How non-affiliates lose volume limits after 6 months and face zero conditions after 12 months
- What the Qualified Institutional Buyer (QIB) resale safe harbor is and why it has zero holding period, zero volume cap, and zero filing requirement
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