By DealFlow Media – www.dealflowmedia.com

The Securities and Exchange Commission published the final draft of changes it’s making to Rules 144 and 145 of the Securities Act of 1933 on Dec. 6. The rule changes, which deal partly with requirements for holders of restricted stock, have been under discussion since last spring at the SEC and were closely watched by the PIPE market.

Only one surprise remained: The rule changes, including those shortening the required holding periods for restricted stock, are applicable to securities acquired before or after the effective date of the changes.

This means that if you’ve held restricted securities for six months, once the effective date hits you can sell them. The effective date is 60 days from the rule changes’ publication in the Federal Register.

The rule changes will reduce the required holding period to six months from one year for unregistered securities held by non-affiliates.

The move is seen as likely to increase liquidity for investors and create more favorable terms for PIPE issuers.

Allowing investors holding securities prior to the rule change to still use the shortened holding period is good for them, but it might pose unexpected problems for companies that were not planning on having those shares tradable so soon, according to representatives of PIPE issuers.

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