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Law360 (April 13, 2020, 1:53 PM EDT ) Issuers of restricted securities may temporarily submit the relevant form to the U.S. Securities and Exchange Commission electronically instead of on paper, the staff of the SEC's Division of Corporate Finance has said.
The statement, issued Friday, said the change is not a rule adjustment or regulation from the agency. Instead, it is a statement from division staff that they won't recommend enforcement action against those who email Forms 144 instead of using paper submissions.
The statement covers those who submit the forms from April 10 until June 30. It's intended as temporary relief in light of the challenges posed by the spread of COVID-19, division staff said.
"The staff of the Division of Corporation Finance is aware of logistical difficulties of submitting Forms 144 in paper given the spread of coronavirus disease 2019 (COVID-19)," the statement said.
Those who wish to submit the forms electronically may send them to a designated email address, the statement said. Filers who can't provide a manual signature may use a typed signature as long as they have a manually signed document that acknowledges the use of the typed signature, the announcement said.
Issuers can continue to mail in paper forms if they wish, but there may be delays in processing them, the statement said.
Forms 144 must be filed with the SEC as notice of the proposed sale of restricted or control securities to the public, and must be submitted by an affiliate of the issuer. The forms are linked to Rule 144, which sets the parameters for selling the securities, such as how long they are held and the amount that can be sold at one time.
Issuers must file Form 144 when the amount of restricted or control securities to be sold during any three-month period is at least 5,000 shares or the total sale price tops $50,000, according to the SEC's information page.
While Friday's announcement doesn't constitute an official rule change from the SEC, the agency has formally adjusted several rules in an effort to help businesses deal with the economic fallout from the pandemic.
On April 8, the SEC temporarily relaxed financing rules for business development companies, and in March, the agency extended certain deadlines associated with notarization and crowdfunding reports. The SEC has twice extended deadlines for certain regulatory disclosures for public companies affected by the virus.
--Additional reporting by McCord Pagan and Dean Seal. Editing by Abbie Sarfo.
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