Monetization pathways for restricted shares of U.S.-listed Chinese companies — Introduction to Rule 144

Restricted shares in the U.S. typically bear a restrictive legend explicitly stating that such shares may not be traded on public markets unless exempted under relevant SEC regulations. Rule 144 under the Securities Act of 1933 is the most commonly used exemption rule for restricted shares. Its provisions require, in addition to satisfying a six-month or one-year holding period, the removal of the restrictive legend from the stock certificate prior to sale. Only the transfer agent has the authority to remove this legend—and doing so requires an opinion letter. In most cases, shareholders may contact the issuer company directly to request legend removal; alternatively, if the shareholder has a broker, the broker may assist with this process. Regardless, an opinion letter is always required. A key concept: Transfer agent: A firm engaged by a specific company to record ownership—by individuals or entities—of that company’s publicly traded securities. It issues and cancels stock certificates evidencing ownership, serves as an intermediary in stock transactions, handles matters related to lost or stolen certificates, and is responsible for removing restrictive legends. Introduction to Rule 144: Adopted by the U.S. SEC in 1972 as an amendment to the Securities Act of 1933, Rule 144 aims to provide clearer criteria for identifying underwriters and to specify how and when restricted shares may be sold. It offers guidance to issuers, broker-dealers, shareholders, and transfer agents regarding the trading of restricted shares—including rules on calculating the holding period, filing requirements for each release of restricted shares, and other restrictions. Rule 144 applies to shares acquired through private placements, employee stock incentive plans, mergers and acquisitions, and other non-public transactions. It also covers shares held by affiliates—such as corporate directors and major shareholders—who possess influence over the company’s management and policies. Rule 144 legend: Transfer agents stamp stock certificates with language indicating that the shares are subject to the resale restrictions set forth in Rule 144. Such language constitutes the “Rule 144 legend.” Which shares carry the Rule 144 legend? Public companies generally affix the Rule 144 legend to all stock certificates. Failure to do so may be viewed as insufficient effort to prevent unregistered shares from being sold—unless registration is completed or an exemption obtained. Determinants of the holding period: The length of the holding period depends on multiple factors. After full payment for the restricted shares, the duration hinges on whether the holder is an affiliate or non-affiliate, whether the issuing company is subject to disclosure obligations, and whether the issuing company is a shell company.

Data: Opportunistic insider selling by executives of listed companies

Executive Summary: As established by Kallunki et al. (2009) and Kallunki et al. (2019), executives’ share sales may stem from opportunistic motives—or alternatively, from objective liquidity needs or portfolio diversification motives. Thus, it is essential to distinguish between opportunistic selling and routine (non-opportunistic) selling. Relative to routine selling, opportunistic selling poses greater harm to listed companies and holds greater research value. Accordingly, this edition of @Papers_and_Data focuses specifically on measurement methodologies and concrete datasets concerning opportunistic insider selling by executives of listed companies. ❶ Definition of Opportunistic Insider Selling by Executives of Listed Companies Opportunistic insider selling by executives requires certain preconditions—namely, access to private or non-public information advantages. Due to information asymmetry, corporate insiders (executives) exploit their private information to anticipate significantly negative stock returns over the forthcoming month and thereby engage in opportunistic selling ahead of time. Moreover, Huddart and Ke (2010) further demonstrate that the stronger the insiders’ private information advantage, the more pronounced the negative abnormal returns resulting from such opportunistic selling. ❷ Measurement of Opportunistic Insider Selling by Executives of Listed Companies Following Zhu Chaifen (2011) and Wu Yuhui (2010), the event study methodology is adopted: using the announcement date of each share sale as the event date (t = 0), the estimation window spans the 150 trading days preceding the event, i.e., [–150, –31]. Abnormal returns (AR) are calculated using the standard market model, and the post-transaction stock price trajectory and excess returns associated with each executive’s sale are analyzed.

Linde PLC Officer Guillermo Bichara Files Form 144 for Stock Sale

1 day ago

Linde officer Guillermo Bichara filed Form 144 to sell 9,350 shares worth $4.85 million on November 2, 2026. The filing states no material adverse information regarding operations is known.

StreetInsider

2026-11-02

Linde PLC Officer Guillermo Bichara Files Form 144 for Stock Sale

Linde PLC Officer Guillermo Bichara Files Form 144 for Stock Sale

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