by LearnAboutLaw Staff July, 2007
Rule 144’s subsection (d) dictates that “a minimum of one year” must pass from the time the securities are acquired from the issuer or from an affiliate of the issuer (affiliate definition: here ) and the date of sale. And the subsection continues by noting that sales are allowable by both the original acquiror of the securities or a subsequent holder–as long as the minimum one year hold is met. As such, a donee by gift enjoys the full tacking period of the original holder of the securities.
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When the Donor Is an Affiliate
Even when the Donor is an affiliate of the issuer, Rule 144 carves out a generous exception that allows donees to enjoy the affiliate’s full holding period. Subsection (d)(3) states that “Securities acquired from an affiliate of the issuer by gift shall be deemed to have been acquired by the donee when they were acquired by the donor.” Clearly, gifts of securities, even from normally hyper-restricted affiliates can be made to donees who will thereafter enjoy the full benefit of the donor’s holding period.
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