As April 13th approaches, in-house counsel at public companies should prepare for the electronic Form 144 filing requirement beginning on that date. Form 144 is the filing that officers and directors of public companies file under Rule 144 when they sell shares of their company’s stock (other than pursuant to a resale registration statement or for sales at or under 5,000 shares and $50,000 in value).
Currently, Form 144 is typically filed by mailing a paper form on or before the date a sale order is entered, often with the assistance of the seller’s broker. While some brokers are gearing up to assist with electronic Form 144 filings by soliciting consents and obtaining the necessary EDGAR filing codes from their public company officer and director clients, we understand that other brokers will no longer file on behalf of officers and directors.
For public companies that file their officers’ and directors’ Section 16 reports, the transition to electronic filing of Form 144 is likely to lead to officers and directors requesting that they file Form 144 or requesting they provide the individual EDGAR codes (CIK# and CCC#) necessary for brokers to make the electronic filing.
For any officers and directors who personally file their own Section 16 reports on Forms 4 and 5, the shift to electronic filing of Form 144 is likely to be fairly simple. The SEC has provided guidance and support; the EDGAR filing codes are the same ones used for Section 16 reports. See, https://www.sec.gov/edgar/filer-information/form-144-resources-filing-electronically.
When the company or a broker files on behalf of an officer or director, they use their own EDGAR codes to access the filing system. However, for an individual filing on their own, there are requirements in addition to the CIK# and CCC#, including an EDGAR password that must be updated every year (so if they have not sold any stock or filed a Form 4 or 5 recently, their password may be stale). Also, they will need their EDGAR passphrase (different from the password, though easily confused) and a PMAC (password management code).
While it is typical for public companies to consider only their executive officers and directors who are subject to Section 16 reporting to be “affiliates” of the company, there may be some situations where other officers are considered affiliates and will have to file electronic Form 144 when they sell their shares. Also, any other control persons that are considered affiliates that sell under Rule 144 will be required to file an electronic Form 144. In each case, they may need to obtain EDGAR codes if they do not already have them for Schedule 13D or 13G filings.
If you have any questions about these changes, your regular Locke Lord contact or any of the authors can discuss these matters with you.
 Officers and directors of non-US companies with their principal listing on the NYSE or Nasdaq and that qualify as “foreign private issuers” are not required to file Section 16 reports, so are unlikely to have the necessary EDGAR codes. As a result, in-house counsel at those companies are more likely to be asked to get them ready for electronic filing of Form 144. For foreign private issuers with their principal trading market outside the US, sales in the home market under Regulation S will not require a Form 144 filing (and the attendant publicity).
The post Electronic Form 144 Filings: Reminder of April 13th Deadline appeared first on Capital Markets.
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