Form 144 provides notice to the U.S. Securities and Exchange Commission (the “SEC”) of a proposed sale of securities by an affiliate of an issuer in reliance on Rule 144 of the US Securities Act of 1933, as amended (the “Securities Act”). Generally, all open market sales by a public company’s directors, officers and significant shareholders are subject to Rule 144, and require that a Form 144 be filed. Exceptions to this requirement include (i) sales made pursuant to an effective resale registration statement and (ii) sales of not more than 5,000 shares or that have an aggregate sales price of not more than $50,000.
Currently, reporting persons may file Form 144s either electronically or by mailing paper copies to the SEC. In June 2022, the SEC adopted amendments to its rules governing electronic filings to require all Form 144s to be filed electronically. The effective date of the electronic filing requirement for all Form 144s is currently April 13, 2023, at which time paper copies will no longer be accepted. The timing of the Form 144 filing requirement is not impacted by the SEC’s new rules.
It is important to note that any electronic filing made with the SEC, including Form 144s, must be made on the SEC’s Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system. To file via EDGAR, any person who is required to file a Form 144 electronically must have their own EDGAR account number (CIK) and CIK Confirmation Code (together, “EDGAR Codes”), even if they plan to have an authorized agent or the issuer file the Form 144 on their behalf. For this reason, any person that is, or may be become, subject to Rule 144 should confirm that they currently have EDGAR Codes in their name, and if they do not, should apply for EDGAR Codes as soon as possible. Information about obtaining EDGAR Codes can be found on the SEC website at the following link.
It should be noted that most directors, officers and significant shareholders of U.S. domestic companies are likely to have EDGAR Codes due to their existing obligation to make Form 3 and Form 4 filings via EDGAR pursuant to Section 16 of the Securities Act. However, many directors and officers of foreign private issuers, which are not subject to Section 16 of the Securities Act, are likely to find that they will need to acquire EDGAR Codes.
If you have any question regarding the foregoing, please contact your primary attorney in Seward & Kissel’s Capital Markets Group, who will be able to determine whether EDGAR codes exist and, if not, can assist the application process.