SEC Staff Guidance Regarding the Filing of Form 144 in Light of COVID-19

On April 10, 2020, the Division of Corporation (the “Staff”) published a statement addressing logistical difficulties in satisfying the requirement to file Securities Act of 1933 Form 144 (the “Statement”).[1] Noting the current difficulties presented by COVID-19, the Staff published the Statement to assist filers in complying with the Form 144 requirement. The Statement sets forth the Staff’s views regarding the optional use of email to file a Form 144 and the means of providing the signature required by Form 144.

Form 144 – Requirements Regarding Filing and Signatures

The requirement to file a Form 144 is set forth in Rule 144(h) under the Securities Act of 1933. Regulation S-T establishes the requirement to submit a Form 144 in a non-electronic format but provides certain persons with the option of using an electronic format. The required or permitted format for filing a Form 144 depends on the nature of the issuer of the securities whose sales are being reported on the Form:

• Where the issuer is not subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, a Form 144 “shall not be submitted in electronic format”;[2] and
• Where the issuer is subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, a Form 144 “may be submitted to the Commission in electronic format, at the option of the electronic filer.”[3]

Regardless of the manner in which the Form 144 is submitted to the Commission, the Form 144 “shall be signed by the person for whose account the securities are to be sold.”[4] All persons who sign a Form 144 are subject to penalties under the federal securities laws for false and misleading statements.

The Staff Statement Regarding Form 144 Filings

The Statement expresses the Staff’s position with regard to those persons who submit Forms 144 during the period from and including April 10, 2020, to June 30, 2020.

Use of Email – The Staff will not recommend enforcement action to the Commission if a person that is required to file a Form 144 in paper submits that Form 144 via email in lieu of mailing or delivering the paper form to the Commission. A person relying on the Staff’s position should submit a Form 144 via email by attaching a complete Form 144 as a PDF attachment to an email sent to PaperForms144@SEC.gov.

While filers and submitters may continue to submit paper Forms 144 to the SEC mailroom, the Staff noted that there may be delays in the processing of those submissions.

Use of Typed Signatures – If a person submitting a Form 144 via email is unable to provide a manual signature in the PDF attached to the email submission, the Staff will not recommend enforcement action to the Commission if a typed form of signature is provided in lieu of the manual signature and:

• the signer retains a manually signed signature page or other document authenticating, acknowledging, or otherwise adopting his or her signature that appears in typed form in the electronic submission and provides such document, as promptly as practicable, upon request by the Staff;
• the authenticating document indicates the date and time when the signature was executed; and
• any person submitting a Form 144 via email that is not a natural person establishes and maintains policies and procedures governing the typed signature authentication process.

Conclusion

The Staff Statement provides helpful relief for those who are attempting to timely comply with the Form 144 requirement. The Statement also demonstrates a small, temporary step in the continued evolution away from required manual signatures in Commission filings that has been evidenced in the response of the Commission and its staff to the circumstances presented by the COVID-19 pandemic.

[1] Division of Corporation Finance Statement Regarding Requirements for Form 144 Paper Filings in Light of COVID-19 Concerns (April 10, 2020), available at: https://www.sec.gov/corpfin/announcement/form-144-paper-filings-email-option.

[2] Rule 101(c)(6) of Regulation S-T.

[3] Rule 101(b)(4) of Regulation S-T.

[4] Rule 144(h) under the Securities Act of 1933.