SA Transaction Exemption: Rule 144A

Overview

Securities Act Rule 144A provides a safe harbor for the resale of restricted securities.

In order to qualify for the safe harbor under Rule 144A, the following conditions must be met: the securities at issue must be offered and sold only to persons reasonably believed to be Qualified Institutional Buyers (“QIBs”) as defined in the Rule; the seller (or person acting on its behalf) must take reasonable steps to ensure that the purchaser is aware the seller may rely on Rule 144A; the securities sold must not, when issued, be of the same class as a class listed in the United States; and purchasers are entitled upon request to receive reasonably current information about the issuer.

Issuers subject to reporting under the Exchange Act, foreign governments and other entities eligible to register offerings under Schedule B, and foreign private issuers exempt from registration pursuant to Rule 12g3-2(b) are all exempt from the information requirement.

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