Current Public Information Requirement
The Current Public Information Requirement is a Rule 144 condition requiring adequate current information about the issuer to be publicly available when the condition applies to a proposed resale.
How it works
For a reporting issuer, Rule 144(c)(1) generally requires the issuer to have been subject to Exchange Act reporting for at least 90 days before the sale, to have filed required Section 13 or 15(d) reports during the preceding 12 months or shorter applicable reporting period, other than Form 8-K reports, and to have submitted required Interactive Data Files. For a non-reporting issuer, Rule 144 identifies a specified information package that must be publicly available.
Reporting issuers use a filing-compliance test
Rule 144 looks to the issuer’s reporting history and required interactive-data submissions.
Non-reporting issuers use a specified information package
The rule points to identified business, management, capitalization and financial information that must be publicly available.
Affiliates remain subject to the condition
Affiliate reliance on Rule 144 generally requires adequate current public information.
Qualifying non-affiliates can age out of the condition
After one year, a non-affiliate that satisfies the rule’s status requirements can generally resell without the current-information condition.
Worked example: late annual report
A holder reaches seven months on restricted shares, but the reporting issuer is delinquent on a required annual report. The holder can face a Rule 144 problem even though the time-based holding condition has been met.
Why issuer compliance affects investor liquidity
A company’s reporting failure can delay or impair public resale by security holders who otherwise expected Rule 144 liquidity.
Common mistakes
Assuming the holder can cure the issuer’s delinquency; treating any company website information as sufficient; ignoring XBRL submission requirements; and assuming the condition disappears immediately after six months.
Example
A non-affiliate wants to sell restricted shares of a reporting issuer eight months after acquisition. The six-month holding period has passed, but the current public information condition can still matter until one year has elapsed.
Example
A non-affiliate wants to sell restricted shares of a reporting issuer eight months after acquisition. The six-month holding period has passed, but the current public information condition can still matter until one year has elapsed.
Professional note
The requirement is an issuer-information test applied to the seller’s resale. A holder can satisfy its own holding period and still be unable to rely on Rule 144 if the issuer’s information condition is not met.
Related terms
- 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.
- Rule 144 Holding Period
The Rule 144 Holding Period is the minimum time restricted securities generally must be held before they can be resold in reliance on Rule 144, subject to the issuer’s reporting status and the seller’s circumstances.
- Rule 144 Affiliate
A Rule 144 Affiliate is a person that directly or indirectly controls, is controlled by, or is under common control with an issuer for purposes of applying Rule 144 resale conditions.
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