Which transaction is not covered by Rule 144?

Rule 144 is a regulation that governs the resale of restricted and control securities. It is designed to provide a safe harbor for selling securities without the need for registration while still protecting the investing public.

The correct answer states that non-affiliate trades on an exchange are not covered by Rule 144. This is because such transactions involve the trade of securities by individuals who are not insiders or affiliates of the issuer. Essentially, these trades are considered to be in the public marketplace and do not involve the same restrictions that apply to affiliates or control persons.

In the context of Rule 144, affiliates typically have greater access to information about the company and, therefore, face more scrutiny in terms of trading their shares. Non-affiliate trades, occurring in a public exchange, do not need to adhere to the resale limitations that Rule 144 establishes, making them exempt from the rule's restrictions, unlike trades by affiliates or the other identified types of transactions which are subject to specific guidelines under Rule 144.