President Obama signed into law the Fixing America’s Surface Transportation Act (the “FAST Act”) on December 4, 2015 to address the nation’s infrastructure challenges. However, the FAST Act also made notable changes to the Securities Act of 1933 (the “Securities Act”), including by adding a new statutory exemption – Section 4(a)(7) – which permits private resales of restricted securities under certain circumstances.
The new Section 4(a)(7) feels a lot like the uncodified “Section 4(a)(1½)”, which practitioners have relied upon for resales of securities by any person other than the issuer, underwriter or dealer. However, the new Section 4(a)(7) includes a few significant distinctions, including issuer information requirements and elimination of most holding periods. To learn more about Section 4(a)(7) and its potential impact on the secondary markets in private securities, read the latest Venture Capital and Emerging Companies Alert.