Practical Law Glossary Item 4-382-3781 (Approx. 3 pages)
Glossary
Rule 701
A rule under the Securities Act that provides a safe harbor from registration under the Securities Act for grants of equity securities by a non-reporting company to its employees and certain other persons under the terms of a written compensatory benefit plan or written compensation contract. Though securities acquired in Rule 701 transactions are restricted securities, under Rule 701(g)(3), they benefit from favorable treatment under Rule 144 after the issuing company goes public.