On March 14, 2016, the Staff of the Securities and Exchange Commission (SEC) issued interpretative guidance in response to a request from Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated with respect to the required Rule 144 holding period following the exchange of partnership interests in an umbrella operating partnership (OP units) into shares of its parent real estate investment trust (REIT shares). Rule 144 details the conditions that must be satisfied for sales of restricted securities to be able to rely upon the exemption from registration safe harbor. Among other requirements, Rule 144(b) provides that a person may rely on the safe harbor if the holding period requirement set out in Rule 144(d)(1) has been satisfied. The holding period requirement varies from six months to one-year depending upon whether the given issuer has been subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, during the preceding 90 day period. Generally the holding period commences at the time a person acquires a security. However, the SEC’s interpretative guidance clarifies that for purposes of Rule 144(d)(1), the holding period for REIT shares issued in transactions consistent with the below conditions commences upon the earlier acquisition of the OP units. In reaching this conclusion, the SEC noted the following conditions: (i) the OP unit holders paid the full purchase price for the OP units at the time they were acquired from the umbrella operating partnership; (ii) an OP unit is the economic equivalent of a REIT share, representing the same right to the same proportional interest in the same underlying pool of assets; (iii) the exchange of REIT shares for OP units is entirely at the discretion of the parent real estate investment trust; and (iv) no additional consideration is paid by the OP unit holders for the REIT shares.