Investing Basics

Rule 144

Rule 144 is a Securities Act safe harbor that allows public resale of restricted or control securities when its applicable conditions are satisfied.

Updated 2026-09-01 · Foundation

Rule 144 is a safe harbor for resales

Rule 144 provides objective conditions under which a holder can resell restricted or control securities without registering that resale under the Securities Act.^[1]^[4]

The rule does not make every privately issued security instantly marketable.

Its conditions depend heavily on two questions:

Is the issuer subject to Exchange Act reporting?
Is the seller an affiliate of the issuer?

Holding periods

For restricted securities of an issuer that has been subject to specified Exchange Act reporting requirements for the required period, Rule 144 generally uses a six-month holding period.^[2]^[4]

For restricted securities of a non-reporting issuer, the general holding period is one year.^[2]

The holding-period calculation can become more complicated after gifts, pledges, conversions, reorganizations or other transactions.

Non-affiliates can eventually face fewer conditions

A non-affiliate who has not been an affiliate during the preceding three months can receive relatively streamlined treatment.^[2]

For a reporting issuer:

after six months but before one year, current public information remains relevant
after one year, a qualifying non-affiliate can generally resell without the other Rule 144 conditions

For a non-reporting issuer, the one-year holding period is central.^[2]

Affiliates face additional restrictions

Affiliates are people who control, are controlled by or are under common control with the issuer.^[1]

After the applicable holding period, affiliate resales can remain subject to conditions including:^[1]^[2]

current public information
volume limitations
manner-of-sale requirements for equity securities
Form 144 filing requirements when applicable

That is why an executive, director or controlling shareholder can face a different resale analysis from an ordinary outside investor holding the same class of stock.

Rule 144 is not the only path

Rule 144 is a non-exclusive safe harbor.^[2]

Other exemptions or registered resale structures may be available depending on the transaction.

The practical advantage of Rule 144 is certainty: satisfying its conditions gives the seller a defined route for avoiding underwriter status under the safe harbor.

Form 144

Certain affiliate sales meeting specified thresholds require a Form 144 notice filing.^[1]^[2]

Form 144 is different from Form D.

Form D relates to an issuer's exempt offering.
Form 144 can relate to a holder's resale of restricted or control securities.

Confusing the two can obscure who is selling and which transaction is being exempted.

Common mistakes

“Six months always makes restricted stock freely tradable.”

No. The issuer's reporting status and the seller's affiliate status matter.

“Rule 144 applies only to insiders.”

No. Non-affiliates frequently rely on it for restricted securities.

“Rule 144 creates liquidity.”

No. It creates a legal safe harbor, not a buyer.

“If Rule 144 is unavailable, resale is impossible.”

No. Other registration exemptions or a registered resale may be possible.

Example

An investor evaluating a transaction involving Rule 144 should identify the exact exemption, eligibility rule, disclosure framework and resale constraints that apply.

Professional note

A Rule 144 analysis should never begin with only the purchase date. Confirm issuer reporting status, affiliate history, how the securities were acquired, tacking rules, current public information, volume and sale-method constraints, and transfer-agent requirements before assuming a resale can close.

Related terms

Private Placement
A private placement is a non-public offering of securities conducted in reliance on an available exemption from registration under the Securities Act of 1933.
Form D
Form D is an SEC notice filing used for offerings relying on Regulation D and certain other exempt-offering provisions.
Regulation Crowdfunding
Regulation Crowdfunding is a federal exemption that permits eligible companies to raise up to $5 million in a 12-month period through an online SEC-registered broker-dealer or funding portal.
Restricted Securities
Restricted securities are securities acquired in specified unregistered transactions that cannot be freely resold into the public market unless the resale is registered or an exemption is available.
Accredited investor
An investor who meets SEC income or net worth thresholds and may access private offerings.

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