What is SEC Form 144?
Form 144 is a mandatory SEC filing for those intending to sell restricted or control securities. Restricted securities stem from private sales, whereas control securities belong to affiliates such as directors or large shareholders. The fundamental objective of this filing is to notify the SEC and the public about these sales.
Relation to SEC and EDGAR filing
The SEC mandates the electronic filing of Form 144 on its EDGAR system in XML format.1 Previously, 144 was permitted to file with the SEC in paper or via email.
Who is required to file Form 144?
The following individuals or entities must file Form 144 if selling restricted or control securities:
- Corporate insiders (similar to Section 16 insiders) subject to the reporting requirements of section 13 or 15(d) of the Exchange Act, which includes:
- Directors
- Officers
- Shareholders owning over 10% of outstanding shares
- Affiliates of an issuer (those with control or under common control), such as:
- Household-sharing relatives or spouse
- Trusts or estates with 10% or more beneficial interest
- Corporations or organizations with 10% or more equity interest
When is the deadline to file Form 144?
Securities must be held for a minimum of 6 consecutive months prior to being sold (time may include the initial purchase date for any gifted securities2). Over a three-month period, if the sales of restricted or control securities exceed 5,000 shares, or has an aggregate sale price in excess of $50,000, you are required to file Form 144 if you plan to sell additional securities.
Filers cannot exceed sales of more than 1% of the total number of outstanding securities.3
Filing Form 144 on EDGAR
With the transition to XML format, the EDGAR requirements for each field have become more restricted.
The following must be considered when filing on EDGAR:
- Securities to be sold: You must have held and/or paid for the shares for at least 10 calendar days prior to filing
- Securities sold in the past three months: You cannot list any securities that were sold in the past 10 calendar days or securities that were sold more than 9 months in the past.
- Date of Notice: When signing the form, the date of notice cannot exceed 10 calendar days. All dates must be a single date. Date ranges are not allowed.
- Form 144 will receive the same days filing date if filed by 10 PM ET.4
This comprehensive IRS guide on Form 144 electronic filings clarifies requirements and addresses both common and intricate concerns. With this knowledge, you can more confidently manage Form 144 requirements while obtaining industry-level expertise.
Toppan Merrill is here to assist you with your EDGAR filing and compliance needs, with experts who know precisely what’s needed to keep your business ahead of the SEC’s ever-changing disclosure requirements. Learn more about our SEC Connect platform that helps you file easily online.
Additional References:
SEC FORM 144: https://www.sec.gov/files/form144.pdf
SEC FORM 144 Resources: https://www.toppanmerrill.com/form-144-resources/
1 SEC Rule: Updating EDGAR Filing Requirements and Form 144 Filings:
https://www.federalregister.gov/documents/2022/06/10/2022-12253/updating-edgar-filing-requirements-and-form-144-filings
2 § 230.144 Persons deemed not to be engaged in a distribution and therefore not underwriters. Gift of Securities: https://www.ecfr.gov/current/title-17/chapter-II/part-230/section-230.144#p-230.144(d)(3)(v)
3 SEC Investor Publications: Rule 144: Selling Restricted and Control Securities: https://www.sec.gov/reportspubs/investor-publications/investorpubsrule144
4 SEC Rule: Extending Form 144 EDGAR Filing Hours: https://www.federalregister.gov/documents/2023/02/27/2023-03931/extending-form-144-edgar-filing-hours
