Series 24 Exam Information

Here is some great series 24 exam information regarding Rule 144
Rule 144



Rule 144 regulates how control or restricted securities may be sold. Rule 144 designates:


 The holding period for the security

 The amount of the security that may be sold

 Filing procedures

 Method of sale


Control securities are owned by officers, directors, and owners of 10% or more of the company’s outstanding stock. Control stock may be obtained by insiders through open market purchases or though the exercise of company stock options. There is no holding period for control securities. However, insiders are not allowed to earn a short swing profit through the purchase and sale of control stock in the open market. If the securities were held less than 6 months, the insider must return any profit to the company.


Restricted securities may be purchased by both insiders and investors though a private placement or be obtained through an offering other than a public sale. Securities obtained through a private placement or other non-public means need to be sold under rule 144 in order to allow the transfer of ownership. Restricted stock must be held fully paid for, for 6 months. After 6 months the securities may be sold freely by non-insiders. Rule 144 sets the following volume limits for both restricted and control stock during any 90-day period. The seller must file form 144 at the time the order is entered and for NYSE and NASDAQ listed securities the sale is limited to the greater of:


 The average weekly trading volume for the preceding four weeks; Or

 1% of the issuer’s total outstanding stock

Under Rule144 the volume limitation for Non NASDAQ securities is 1% of the issuer’s outstanding stock. All sales under Rule 144 require that the issuer have adequate financial information publicly available and is filing reports with the SEC. Form 144 does not need to be filed for orders for 5000 shares or less and that do not exceed $50,000.

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