The U.S. Securities and Exchange Commission (SEC) adopted rule amendments on June 2, 2022, that require Forms 144 to be filed electronically via the SEC’s EDGAR system, rather than through a paper filing. The purpose of Form 144 is to notify the SEC about a proposed sale of securities, common, preferred, and other securities such as asset-backed securities. The changes were made to improve the disclosure and regulatory requirements around the sale of securities so that the public can be aware of the sale and the potential impact it could have on the market. Prior to the rule amendments, Forms 144 were permitted and traditionally submitted in paper form. The deadline for compliance with the new electronic filing requirements for Forms 144 was April 13, 2023.
Prior to the rule amendments, Forms 144 were permitted and traditionally submitted in paper form. Filing the form electronically through the SEC's EDGAR system will make the process faster and more efficient.
Summary of the changes:
- The addition of a new box on the form that allows for an indication that the sale is part of a Rule 10b5-1 trading plan.
- The SEC has also added new disclosure requirements for individuals selling more than 5,000 shares or $50,000 of a security in a three-month period.
- Another change is the requirement to disclose the total number of shares owned, as well as any sales made during the preceding 90 days.
- Filing Form 144 on EDGAR from 5:30 p.m. to 10:00 p.m. (ET) is considered same business day.
It's important to note that the changes to Form 144 do not affect the rules around the sale of restricted securities themselves. The same rules and regulations need to be followed when selling restricted securities, and Form 144 needs to be filed before any shares are sold.
The recent changes to Form 144 are aimed at improving the disclosure and regulatory requirements around the sale of restricted securities. These changes will make it easier to comply with the rules and will help to prevent insider trading and market manipulation.
At EQ, we recognize the need for efficient SEC reporting software that can help streamline the preparation time for mandatory filings. Our clients can be assured that our SEC Filing Forms and processes include the ability to file Form 144 within the required filing window, thereby eliminating any extra steps and better ensuring compliance. If you have any questions, please do not hesitate to contact your Relationship Manager.