Exemptions from Registration

Despite the stringent registration requirements imposed by the 1933 Act, most US securities are not sold through public, registered offerings. Instead, one or more exemptions are used. The exemptions are non-exclusive, meaning more than one may apply to any given offering. Under Section 4(2), private placements may be made to institutions or other "accredited investors" deemed to be able to "fend for themselves" without a full registration. Regulation D codifies this statutory principal and offers more clearly defined safe harbor rules for those seeking a private placement exemption. Section 3(a)(11) offers the little used exemption allowing issues made only within one state to avoid registration. Rule 147 creates a clearly defined safe harbor for intrastate offerings.
Of greater importance, Section 4(1) allows for secondary market transactions to take place without registration - an essential provision allowing for market liquidity. Rule 144 allows company affiliates (insiders and control persons) and other owners of restricted securities to sell in some circumstances, and is discussed in detail below.
Rule 144A exempts resales of restricted securities between "Qualified Institutional Buyers," or "QIBs." This creates a secondary market in restricted securities among the biggest players on Wall Street. Note that Rules 144 and 144A accomplish different objectives