Control and Restricted Securities

What this video covers

• The distinction between restricted securities (how acquired: private placements) and control securities (who owns them: affiliates)
• The 6-month holding period for Securities and Exchange Commission (SEC) reporting companies versus the 12-month holding period for non-reporting companies, and why the difference exists
• Who qualifies as an affiliate: officers, directors, or 10% shareholders, and why affiliate status is company-specific
• The volume limit formula for affiliates: the greater of 1% of outstanding shares or the average weekly trading volume over the preceding 4 weeks, applied in any rolling 3-month period
• The five safe harbor requirements for unregistered resale: current public information, holding period, volume limits, ordinary broker transaction, and Form 144 filing
• Form 144 filing thresholds: 5,000 shares or $50,000 in a 3-month period (either one triggers the requirement)
• The qualified institutional buyer (QIB) exception: no holding period, volume limit, or Form 144 for sales to institutions with $100 million in securities, and why shares remain restricted in the QIB's hands