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 What are Restricted Securities?
 What is Rule 144?
 I purchased shares in the Company's private placements of 1999 and 2000. Ihave beneficially owned the shares for two years as required by Rule 144k,and wish to have the legend removed from my share certificate.
 What are the tax implications for a Non-US Citizen?
What are Restricted Securities?
Restricted securities are generally those which are first issued in a private placement exempt from registration and which bear a restrictive legend. The legend commonly states that the securities are not registered and cannot be offered or sold unless they are registered with the S.E.C. or exempt from registration. The restrictive legend serves to ensure that the initial, unregistered sale is not part of a scheme to avoid registration while achieving some broader distribution than the initial sale. Normally, if securities are registered when they are first issued, then they do not bear any restrictive legend and are not deemed restricted securities.

What is Rule 144?
Rule 144 generally applies to corporate insiders and buyers of private placement securities that were not sold under SEC registration statement requirements. Corporate insiders are officers, directors, or anyone else owning more than 10% of the outstanding company securities. Shares either acquired through compensation arrangements or open market purchases is considered restricted for as long as the insider is affiliated with the company. For example, if a corporate officer purchases shares in his or her employer on the open market, then the officer must comply with Rule 144 when those shares are sold, even though the shares when purchased were not considered restricted. If, however, the buyer of restricted securities has no management or major ownership interests in the company, the restricted status of the securities expires over a period of time.

Under Rule 144, restricted securities may be sold to the public without full registration (the restriction lapses upon transfer of ownership) if the following conditions are met.
  1. The securities have been owned and fully paid for at least one year (there are special exceptions that we'll skip here).
  2. Current financial information must be made available to the buyer. Companies that file 10K and 10Q reports with the SEC satisfy this requirement.
  3. The seller must file Form 144, "Notice of Proposed Sale of Securities," with the SEC no later than the first day of the sale. The filing is effective for 90 days. If the seller wishes to extend the selling period or sell additional securities, a new form 144 is required.
  4. The sale of the securities may not be advertised and no additional commissions can be paid.
  5. If the securities were owned for between one and two years, the volume of securities sold is limited to the greater of 1% of all outstanding shares, or the average weekly trading volume for the proceeding four weeks. If the shares have been owned for two years or more, no volume restrictions apply to non-insiders. Insiders are always subject to volume restrictions.
The most recent rule change of Feb 1997 reduced the holding periods by one year. For all the details, visit the SEC's page on this rule:

I purchased shares in the Company's private placements of 1999 and 2000. I have beneficially owned the shares for two years as required by Rule 144k, and wish to have the legend removed from my share certificate.
You will need to send the share certificate to the attention of Carol Rivers at Alterra. The shares can be reissued, free from legend, or directly deposited into your broker account. For further information, please contact Carol at

What are the tax implications for a Non-US Citizen?
The specific rules of how these accounts are taxed are described in IRS Publication 515 (Withholding of tax on non-resident aliens) and IRS Publication 901 (Tax treaties). The tax treaty is especially important. If the individual's country of residence has an agreement (tax treaty) with the US government, those rules apply. For example, residents of Germany should not have any tax withheld on interest or capital gains, only for dividend payments. However, if the individual's country of residence has no agreement with the US, then the individual should complete the 1001 form (exemption form), and no tax will be withheld at all.

A Non -US citizen is required to complete a form W-8BEN, which is a certificate of foreign status, at the time of purchasing the shares from his broker.

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