Section 4(a)(1) of the Securities Act (formerly Section 4(1) but redesignated Section 4(a)(1) by the JOBS Act) provides an exemption from registration under the Securities Act for transactions by any person who is not an issuer, underwriter or dealer. Sometimes known as the "ordinary trading" exemption, Section 4(a)(1) is a commonly used resale exemption. The main obstacle to using this exemption is whether the seller can be classified as an underwriter under Section 2(a)(11) of the Securities Act and whether the resale involves a distribution of securities.

There are a number of safe harbors (such as Rule 144A and Rule 144 under the Securities Act) that provide a resale does not involve a distribution of securities (thus, allowing a seller to ultimately rely on Section 4(a)(1) for that resale). The principle known as Section 4(1½) is another way that a reseller can establish that a resale is exempt under Section 4(a)(1).

For a discussion of resales under Rule 144A and Section 4(1½), see Practice Note, Resales Under Rule 144A and Section "4(1½)".

For a discussion of resales under Rule 144, see Practice Note, Resales Under Rule 144.