Section 4(a)(7)

The New Section 4(a)(7): More Than a Codification of Section “4(a)(1½)”

By Samual Effron and Cliff Silverman 

On December 4, 2015, the Fixing America’s Surface Transportation Act (the “FAST Act”) was signed into law by President Obama. Although the FAST Act is primarily a transportation bill, buried in this legislation is a new statutory exemption under Section 4(a)(7) of the Securities Act of 1933 (the “Securities Act”) that explicitly permits private resales of restricted securities. This new exemption may increase investor liquidity by facilitating the development of secondary markets in private securities.