Series 82: 1.1.5. The FAST Act Exemption—Section 4(a)7

1.1.5. The FAST Act exemption—Section 4(a)7

In 2015 the Fixing America’s Surface Transportation Act, or “FAST” Act, was signed into law to improve funding for transportation infrastructure projects. The FAST Act also created a new registration exemption from the Securities Act of 1933 for the private resale of unregistered securities. This exemption made it easier for early stakeholders and investors to sell their unregistered shares in a new company.

The FAST Act amended the Securities Act with the introduction of Section 4(a)(7) which exempts the resale of unregistered securities as long as the following conditions hold:

• Purchasers must be accredited investors (or the seller has a reasonable belief they are)

• Securities have been authorized and outstanding for at least 90 days

• No general solicitation or advertising can be used when offering or selling the securities

• Seller is not the issuer, a subsidiary of the issuer or an underwriter

• Seller or any person receiving a commission for the sale is not a bad actor.

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