Restricted Securities - Explained

The video tutorial explains two types of exempt securities: public company exemptions and transactional exemptions. It details holder restrictions on trading, such as limitations on insiders selling shares, and the quantity sale limitation based on weekly trading volume. The tutorial also covers transactional exemptions, which allow certain securities to be issued without SEC registration, and the restrictions on immediate resale, including a 12-month holding period and Rule 144 to prevent straw transactions.

What is the primary purpose of the restrictions on insiders selling shares in a public company?

• To increase the share price

• To prevent market disruption

• To encourage insider trading

• To allow unlimited share sales

What is the maximum percentage of total outstanding shares an insider can trade at any point in time?

• 1%

• 10%

• 5%

• 15%

What is a transactional exemption primarily concerned with?

• The insider trading rules

• The security itself

• The transaction issuing the securities

• The market value of the securities

How long must securities be held before they can be resold under a transactional exemption?

• 24 months

• 18 months

• 12 months

• 6 months

What does Rule 144 aim to prevent in the context of transactional exemptions?

• Market monopolies

• Straw transactions

• Insider trading

• Public company exemptions