Subchapter D. EXEMPTIONS UNDER SECTION 302.1(3) OF THE ACT
Sec.
21.51. Certain securities.
21.52. Transactions effected in connection with distribution.
21.53. Sales of securities to be acquired.§ 21.51. Certain securities.
Any security shall be exempt from the operation of section 302.1(3) of the act (40 P. S. § 422.1(3)) to the extent necessary to render lawful under the section execution by brokers of an order for an account in which the broker has no direct or indirect interest.
§ 21.52. Transactions effected in connection with distribution.
Any security shall be exempt from the operation of section 302.1(3) of the act (40 P. S. § 422.1(3)) to the extent necessary to render lawful under the section any sale made by or on behalf of the dealer in connection with a distribution of a substantial block of securities upon the following conditions:
(1) The sale shall be represented by an over-allotment in which the dealer participates as a member of an underwriting group, or the dealer or a person acting on his behalf intends in good faith to offset such sale with a security to be acquired by or on behalf of the dealer as a participant in an underwriting, selling, or soliciting-dealer group of which the dealer is a member at the time of the sale, whether or not the security to be so acquired is subject to a prior offering to existing security holders of some other class of persons.
(2) Other persons not within the purview of section 302.1(3) of the act shall participate in the distribution of such block of securities on terms at least as favorable as those on which the dealer is participating, and to an extent at least equal to the aggregate participation of all persons exempted from the provisions of section 302.1(3) of the act by this section. The performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing such functions, however, shall not preclude an exemption which would otherwise be available under this section.
§ 21.53. Sales of securities to be acquired.
(a) If any person is entitled, as an incident to his ownership of an issued security and without the payment of consideration, to receive another security ‘‘when issued’’ or ‘‘when distributed,’’ the security to be acquired shall be exempt from the operation of section 302.1(3) of the act (40 P. S. § 422.1(3)) if the following conditions are met:
(1) The sale shall be made subject to the same conditions as those attaching to the right of acquisition.
(2) The person shall exercise reasonable diligence to deliver the security to the purchaser promptly after his right of acquisition matures.
(3) The person shall report the sale on the appropriate form for reporting transactions by persons subject to section 302.1(1) of the act (40 P. S. § 422.1).
(b) Subsection (a) of this section shall not be construed as exempting transactions involving both a sale of a security ‘‘when issued’’ or ‘‘when distributed’’ and a sale of the security by virtue of which the seller expects to receive the ‘‘when issued’’ or ‘‘when distributed’’ security, if the two transactions combined result in a sale of more units than the aggregate of those owned by the seller, plus those to be received by him pursuant to his right of acquisition.
No part of the information on this site may be reproduced for profit or sold for profit.
This material has been drawn directly from the official Pennsylvania Code full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
