Congress Creates New Exemption for Private Resales of Securities: New Securities Act Section 4(a)(7) Exempts the Resale of Restricted and Control Securities to Accredited Investors from the Registration Requirements of Section 5 of the Securities Act

Sullivan & Cromwell LLP - December 8, 2015

Last Friday, President Obama signed into law the Fixing America’s Surface Transportation Act (the “FAST Act”).  Although the FAST Act deals primarily with transportation funding, it also amends the Securities Act of 1933 (the “Securities Act”) to add a new exemption from the registration requirements for private resales of “restricted” and “control” securities to “accredited investors.”  This new exemption will significantly facilitate resales of such securities.  The FAST Act also includes other amendments to the federal securities laws described below.  These changes were effective immediately.