SEC Proposes Significant Revisions to Securities Act Rules 144 and 145

SEC Proposes Significant Revisions to Securities Act Rules 144 and 145


By: Richard A. Steinwurtzel, Joshua Wechsler, Timothy E. Peterson, Karen C. Wiedemann, Valerie Ford Jacob, Jonathan S. Adler, Daniel J. Bursky, Jessica Forbes, Stuart H. Gelfond, Michael A. Levitt, Paul Tropp, Vasiliki B. Tsaganos, Anita Finkelstein

Last month, the Securities and Exchange Commission acted to propose updates to its regulations governing public resales of unregistered securities under Rule 144, with correlative changes to Rule 145, under the Securities Act.  Part of a package of proposals aimed at modernizing and improving its capital raising and reporting requirements for smaller companies, the proposed changes would simplify resales by abbreviating holding periods and easing other elements of compliance, but would make the new, shorter holding period unavailable to holders who engage in hedging activities.  The SEC is also seeking comment on how better to harmonize reporting under Rule 144 with required ownership reporting under Section 16 of the Exchange Act, but made no specific proposals in this area.  The proposed changes to Rule 144 and Rule 145 are subject to a comment period that ends on September 4, 2007.

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