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Rule 144A is a restriction placed on buyers of privately placed securities so that these securities cannot be sold for two years after acquisition. This means there is no liquidity in the market over that period of time. Buyers of privately placed securities must be compensated for this lack of liquidity. SEC Rule 144A went into effect in April 1990. The rule eliminated the two-year holding period and permitted large institutions instead to trade securities acquired in a private placement among themselves without having to register these securities with the SEC. A large institution is defined as one that holds at least $100 million of the security.