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8000 - Miscellaneous Statutes and Regulations
§ 240.16a--1 Definition of terms.
Terms defined in this rule shall apply solely to section 16 of the
act and the rules thereunder. These terms shall not be limited to
section 16(a) of the act but
also shall apply to all other subsections under section 16 of the act.
(a) The term beneficial owner shall have the following
applications:
(1) Solely for purposes of determining whether a person is a
beneficial owner of more than ten percent of any class of equity
securities registered pursuant to
section 12 of the act, the term
"beneficial owner" shall mean any person who is deemed a
beneficial owner pursuant to section
13(d) of the act and the rules thereunder; provided,
however, that the following institutions or persons shall not be
deemed the beneficial owner of securities of such class held for the
benefit of third parties or in customer or fiduciary accounts in the
ordinary course of business (or in the case of an employee benefit plan
specified in paragraph (a)(1)(vi) of this section, of securities of
such class allocated to plan participants where participants have
voting power) as long as such shares are acquired by such institutions
or persons without the purpose or effect of changing or influencing
control of the issuer or engaging in any arrangement subject to rule
13d--3(b) (§ 240.13d--3(b)):
(i) A broker or dealer registered under section 15 of the Act
(15 U.S.C. 78o);
(ii) A bank as defined in section 3(a)(6) of the Act
(15 U.S.C. 78c);
(iii) An insurance company as defined in section 3(a)(19) of the
Act (15 U.S.C. 78c);
(iv) An investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C. 80a--8);
(v) Any person registered as an investment adviser under Section
203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b--3) or under
the laws of any state;
(vi) An employee benefit plan as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.
1001 et seq. ("ERISA") that is subject to the
provisions of ERISA, or any such plan that is not subject to ERISA that
is maintained primarily for the benefit of the employees of a state or
local government or instrumentality, or an endowment fund;
(vii) A parent holding company or control person, provided the
aggregate amount held directly by the parent or control person, and
directly and indirectly by their subsidiaries or affiliates that are
not persons specified in paragraphs (a)(1)(i) through (ix), does not
exceed one percent of the securities of the subject class;
(viii) A savings association as defined in Section 3(b) of the
Federal Deposit Insurance Act (12
U.S.C. 1813);
(ix) A church plan that is excluded from the definition of an
investment company under section 3(c)(14) of the Investment Company Act
of 1940 (15 U.S.C. 80a--3); and
(x) A group, provided that all the members are persons specified
in § 240.16a--1(a)(1)(i) through (ix).
(xi) A group, provided that all the members are persons specified
in § 240.16a--1(a)(1)(i) through (vii).
Note to paragraph (a). Pursuant to this section, a person deemed a
beneficial owner of more than ten percent of any class of equity
securities registered under section 12 of the act would file a form 3
(§ 249.103), but the securities holdings disclosed on form 3, and
changes in beneficial ownership reported on subsequent forms 4
(§ 249.104) or 5 (§ 249.105), would be determined by the definition
of "beneficial owner" in paragraph (a)(2) of this section.
(2) Other than for purposes of determining whether a person is a
beneficial owner of more than ten percent of any class of equity
securities registered under section 12 of the act, the term
beneficial owner shall mean any person who, directly or
indirectly, through
{{2-27-98 p.9432.01}}any
contract, arrangement, understanding, relationship or otherwise, has or
shares a direct or indirect pecuniary interest in the equity
securities, subject to the following:
(i) The term pecuniary interest in any class of equity
securities shall mean the opportunity, directly or indirectly, to
profit or share in any profit derived from a transaction in the subject
securities.
(ii) The term indirect pecuniary interest in any class
of equity securities shall include, but not be limited to:
(A) Securities held by members of a person's immediate family
sharing the same household; provided, however, that the presumption of
such beneficial ownership may be rebutted; see also
§ 240.16a--1(a)(4);
(B) A general partner's proportionate interest in the portfolio
securities held by a general or limited partnership. The general
partner's proportionate interest, as evidenced by the partnership
agreement in effect at the time of the transaction and the
partnership's most recent financial statements, shall be the greater
of:
(1) The general partner's share of the partnership's
profits, including profits attributed to any limited partnership
interests held by the general partner and any other interests in
profits that arise from the purchase and sale of the partnership's
portfolio securities; or
(2) The general partner's share of the partnership
capital account, including the share attributable to any limited
partnership interest held by the general partner.
(C) A performance-related fee, other than an asset-based fee,
received by any broker, dealer, bank, insurance company, investment
company, investment adviser, investment manager, trustee or person or
entity performing a similar function; provided, however,
that no pecuniary interest shall be present where:
(1) The performance-related fee, regardless of when
payable, is calculated based upon net capital gains and/or net capital
appreciation generated from the portfolio or from the fiduciary's
overall performance over a period of one year or more; and
(2) Equity securities of the issuer do not account for
more than ten percent of the market value of the portfolio. A right to
a nonperformance-related fee alone shall not represent a pecuniary
interest in the securities;
(D) A person's right to dividends that is separated or separable
from the underlying securities. Otherwise, a right to dividends alone
shall not represent a pecuniary interest in the securities;
(E) A person's interest in securities held by a trust, as
specified in § 240.16a--8(b); and
(F) A person's right to acquire equity securities through the
exercise or conversion of any derivative security, whether or not
presently exercisable.
(iii) A shareholder shall not be deemed to have a pecuniary
interest in the portfolio securities held by a corporation or similar
entity in which the person owns securities if the shareholder is not a
controlling shareholder of the entity and does not have or share
investment control over the entity's portfolio.
(3) Where more than one person subject to section 16 of the act
is deemed to be a beneficial owner of the same equity securities, all
such persons must report as beneficial owners of the securities, either
separately or jointly, as provided in § 240.16a--3(j). In such cases,
the amount of short-swing profit recoverable shall not be increased
above the amount recoverable if there were only one beneficial owner.
(4) Any person filing a statement pursuant to section 16(a) of
the act may state that the filing shall not be deemed an admission that
such person is, for purposes of section 16 of the act or otherwise, the
beneficial owner of any equity securities covered by the statement.
(5) The following interests are deemed not to confer beneficial
ownership for purposes of section 16 of the act:
(i) Interests in portfolio securities held by any holding company
registered under the Public Utility Holding Company Act of 1935 (15
U.S.C. 79a et seq.);
{{2-27-98 p.9432.02}}
(ii) Interests in portfolio securities held by any investment
company registered under the Investment Company Act of 1940 (15 U.S.C.
80a--1 et seq.); and
(iii) Interests in securities comprising part of a broad-based,
publicly traded market basket or index of stocks, approved for trading
by the appropriate federal governmental authority.
(b) The term call equivalent position shall mean a
derivative security position that increases in value as the value of
the underlying equity increases, including, but not limited to, a long
convertible security, a long call option, and a short put option
position.
(c) The term derivative securities shall mean any
option, warrant, convertible security, stock appreciation right, or
similar right with an exercise or conversion privilege at a price
related to an equity security, or similar securities with a value
derived from the value of an equity security, but shall not include:
(1) Rights of a pledgee of securities to sell the pledged
securities;
(2) Rights of all holders of a class of securities of an issuer
to receive securities pro rata, or obligations to dispose of
securities, as a result of a merger, exchange offer, or consolidation
involving the issuer of the securities;
(3) Rights or obligations to surrender a security, or have a
security withheld, upon the receipt or exercise of a derivative
security or the receipt or vesting of equity securities, in order to
satisfy the exercise price or the tax withholding consequences of
receipt, exercise or vesting;
(i) Are awarded pursuant to an employee benefit plan satisfying
the provisions of § 240.16b--3(a)(1), (a)(2) and (c)(2); or
(ii) May be redeemed or exercised only upon a fixed date or dates
at least six months after award, or incident to death, retirement,
disability or termination of employment;
(4) Interests in broad-based index options, broad-based index
futures, and broad-based publicly traded market baskets of stocks
approved for trading by the appropriate federal governmental authority;
(5) Interests or rights to participate in employee benefit plans
of the issuer;
(6) Rights with an exercise or conversion privilege at a price
that is not fixed; or
(7) Options granted to an underwriter in a registered public
offering for the purpose of satisfying over-allotments in such
offering.
(d) The term equity security of such issuer shall mean
any equity security or derivative security relating to an issuer,
whether or not issued by that issuer.
(e) The term immediate family shall mean any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, and shall include adoptive
relationships.
(f) The term officer shall mean an issuer's president,
principal financial officer, principal accounting officer (or, if there
is no such accounting officer, the controller), any vice-president of
the issuer in charge of a principal business unit, division or function
(such as sales, administration or finance), any other officer who
performs a policy-making function, or any other person who performs
similar policy-making functions for the issuer. Officers of the
issuer's parent(s) or subsidiaries shall be deemed officers of the
issuer if they perform such policy-making functions for the issuer. In
addition, when the issuer is a limited partnership, officers or
employees of the general partner(s) who perform policy-making functions
for the limited partnership are deemed officers of the limited
partnership. When the issuer is a trust, officers or employees of the
trustee(s) who perform policy-making functions for the trust are deemed
officers of the trust.
NOTE: "Policy-making function" is not
intended to include policy-making functions that are not significant.
If pursuant to item 401(b) of Regulation S--K (§ 229.401(b)) the
issuer identifies a person as an ""executive officer,'' it is presumed
that the Board of Directors has made that judgment and that the persons
so identified are the officers for purposes of section 16 of the act,
as are such other persons enumerated in this paragraph (f) but not in
item 401(b).
{{10-31-02 p.9432.03}}
(g) The term portfolio securities shall mean all
securities owned by an entity, other than securities issued by the
entity.
(h) The term put equivalent position shall mean a
derivative security position that increases in value as the value of
the underlying equity decreases, including, but not limited to, a long
put option and a short call option position.
[Codified to 17 C.F.R. § 240.16a--1]
[Section 240.16a--1 added at 56 Fed. Reg. 7265, February 21, 1991,
effective May 1, 1991; amended at 56 Fed. Reg. 19927, May 1, 1991; 61
Fed. Reg. 30391, June 14, 1996, effective August 15, 1996; 62 Fed. Reg.
2868, January 16, 1998, effective February 17,
1998]
§ 240.16a--2 Persons and transactions subject to section
16.
Any person who is the beneficial owner, directly or indirectly, of
more than ten percent of any class of equity securities ("ten
percent beneficial owner") registered pursuant to
section 12 of the Act (15
U.S.C. 78l), any director or officer of the issuer of such securities,
and any person specified in section 17(a) of the Public Utility Holding
Company Act of 1935 (15 U.S.C. 79q(a)) or
section 30(h) of the Investment
Company Act of 1940 (15 U.S.C. 80a-29(h)), including any person
specified in § 240.16a--8, shall be subject to the provisions of
section 16 of the Act (15 U.S.C. 78p). The rules under section 16 of
the act apply to any class of equity securities of an issuer whether or
not registered under section 12 of the act. The rules under section 16
of the act also apply to non-equity securities as provided by the
Public Utility Holding Company Act of 1935 and the Investment Company
Act of 1940. With respect to transactions by persons subject to section
16 of the act:
(a) A transaction(s) carried out by a director or officer in the
six months prior to the director or officer becoming subject to section
16 of the act shall be subject to section 16 of the act and reported on
the first required form 4 only if the transaction(s) occurred within
six months of the transaction giving rise to the form 4 filing
obligation and the director or officer became subject to section 16 of
the act solely as a result of the issuer registering a class of equity
securities pursuant to section 12 of the act.
(b) A transaction(s) following the cessation of director or officer
status shall be subject to section 16 of the act only if:
(1) Executed within a period of less than six months of an
opposite transaction subject to section 16(b) of the act that occurred
while that person was a director or officer; and
(2) Not otherwise exempted from section 16(b) of the act pursuant
to the provisions of this chapter.
Note to Paragraph (b): For purposes of this paragraph,
an acquisition and a disposition each shall be an opposite transaction
with respect to the other.
(c) The transaction that results in a person becoming a ten percent
beneficial owner is not subject to section 16 of the act unless the
person otherwise is subject to section 16 of the act. A ten percent
beneficial owner not otherwise subject to section 16 of the act must
report only those transactions conducted while the beneficial owner of
more than ten percent of a class of equity securities of the issuer
registered pursuant to section 12 of the act.
(d)(1) Transactions by a person or entity shall be exempt from the
provisions of section 16 of the act for the 12 months following
appointment and qualification, to the extent such person or entity is
acting as:
(i) Executor or administrator of the estate of a decedent;
(ii) Guardian or member of a committee for an incompetent;
(iii) Receiver, trustee in bankruptcy, assignee for the benefit
of creditors, conservator, liquidating agent, or other similar person
duly authorized by law to administer the estate or assets of another
person; or
(iv) Fiduciary in a similar capacity.
(2) Transactions by such person or entity acting in a capacity
specified in paragraph (d)(1) of this section after the period
specified in that paragraph shall be subject to section 16 of the act
only where the estate, trust or other entity is a beneficial owner of
more than ten percent of any class of equity security registered
pursuant to section 12 of the act.
{{10-31-02 p.9432.04}}
[Codified to 17 C.F.R. § 240.16a--2]
[Section 240.16a--2 added at 56 Fed. Reg. 7265, February 21, 1991,
effective May 1, 1991; 61 Fed. Reg. 30392, June 14, 1996, effective
August 15, 1996; 67 Fed. Reg. 43535, June 28, 2002, effective July 8,
2002]
§ 240.16a--3 Reporting transactions and holdings.
(a) Initial statements of beneficial ownership of equity securities
required by section 16(a) of the act shall be filed on form 3.
Statements of changes in beneficial ownership required by that section
shall be filed on form 4. Annual statements shall be filed on form 5.
At the election of the reporting person, any transaction required to be
reported on form 5 may be reported on an earlier filed form 4. All such
statements shall be prepared and filed in accordance with the
requirements of the applicable form.
(b) A person filing statements pursuant to
section 16(a) of the act with
respect to any class of equity securities registered pursuant to
section 12 of the act need not
file an additional statement on form 3:
(1) When an additional class of equity securities of the same
issuer becomes registered pursuant to section 12 of the act; or
(2) When such person assumes a different or an additional
relationship to the same issuer (for example, when an officer becomes a
director).
(c) Any issuer that has equity securities listed on more than one
national securities exchange may designate one exchange as the only
exchange with which reports pursuant to section 16(a) of the act need
be filed. Such designation shall be made in writing and shall be filed
with the Commission and with each national securities exchange on which
any equity security of the issuer is listed at the time of such
election. The reporting person's obligation to file reports with each
national securities exchange on which any equity security of the issuer
is listed shall be satisfied by filing with the exchange so designated.
(d) Any person required to file a statement with respect to
securities of a single issuer under both section 16(a) of the Act (15
U.S.C. 78p(a)) and either section 17(a) of the Public Utility Holding
Company Act of 1935 (15 U.S.C. 79q(a)) or section 30(h) of the
Investment Company Act of 1940 (15 U.S.C. 80a-29(h)) may file a single
statement containing the required information, which will be deemed to
be filed under both acts.
(e) Any person required to file a statement under section 16(a) of
the act shall, not later than the time the statement is transmitted for
filing with the Commission, send or deliver a duplicate to the person
designated by the issuer to receive such statements, or, in the absence
of such a designation, to the issuer's corporate secretary or person
performing equivalent functions.
(f)(1) A form 5 shall be filed by every person who at any time
during the issuer's fiscal year was subject to section 16 of the act
with respect to such issuer, except as provided in paragraph (f)(2) of
this section. The form shall be filed within 45 days after the issuer's
fiscal year end, and shall disclose the following holdings and
transactions not reported previously on forms 3, 4 or 5:
(i) All transactions during the most recent fiscal year that were
exempt from section 16(b) of the act, except:
(A) Exercises and conversions of derivative securities exempt
under either § 240.16b--3 or § 240.16b--6(b), and any transaction
exempt under § 240.16b--3(d), § 240.16b--3(e), or § 240.16b--3(f)
(these are required to be reported on form 4);
(B) Transactions exempt from section 16(b) of the Act pursuant to
§ 240.16b--3(c), which shall be exempt from section 16(a) of the act;
and
(C) Transactions exempt from section 16(a) of the Act pursuant to
another rule;
(ii) Transactions that constituted small acquisitions pursuant to
§ 240.16a--6(a);
(iii) All holdings and transactions that should have been
reported during the most recent fiscal year, but were not; and
(iv) With respect to the first form 5 requirement for a reporting
person, all holdings and transactions that should have been reported in
each of the issuer's last two fiscal years but were not, based on the
reporting person's reasonable belief in good faith in the completeness
and accuracy of the information.
(2) Notwithstanding the above, no form 5 shall be required where
all transactions otherwise required to be reported on the form 5 have
been reported before the due date of the form 5.
{{6-30-05 p.9432.05}}
NOTE: Persons no longer subject to section 16 of
the act, but who were subject to the Section at any time during the
issuer's fiscal year, must file a form 5 unless paragraph (f)(2) is
satisfied. See also § 240.16a--2(b) regarding the
reporting obligations of persons ceasing to be officers or directors.
(g)(1) A form 4 must be filed to report: All transactions not
exempt from section 16(b) of the Act; All transactions exempt from
section 16(b) of the Act pursuant to § 240.16b--3(d),
§ 240.16b--3(e), or § 240.16b--3(f); and all exercises and
conversions of derivative securities, regardless of whether exempt from
section 16(b) of the Act. Form 4 must be filed before the end of the
second business day following the day on which the subject transaction
has been executed.
(2) Solely for purposes of section 16(a)(2)(C) of the Act and
paragraph (g)(1) of this section, the date on which the executing
broker, dealer or plan administrator notifies the reporting person of
the execution of the transaction is deemed the date of execution for a
transaction where the following conditions are satisfied:
(i) the transaction is pursuant to a contract, instruction or
written plan for the purchase or sale of equity securities of the
issuer (as defined in § 16a--1(d)) that satisfies the affirmative
defense conditions of § 240.10b5--1(c) of this chapter; and
(ii) the reporting person does not select the date of execution.
(3) Solely for purposes of section 16(a)(2)(C) of the Act and
paragraph (g)(1) of this section, the date on which the plan
administrator notifies the reporting person that the transaction has
been executed is deemed the date of execution for a discretionary
transaction (as defined in § 16b--3(b)(1)) for which the reporting
person does not select the date of execution.
(4) In the case of the transactions described in paragraphs
(g)(2) and (g)(3) of this section, if the notification date is later
than the third business day following the trade date of the
transaction, the date of execution is deemed to be the third business
day following the trade date of the transaction.
(5) At the option of the reporting person, transactions that are
reportable on form 5 may be reported on form 4, so long as the form 4
is filed no later than the due date of the form 5 on which the
transaction is otherwise required to be reported.
(h) The date of filing with the Commission shall be the date of
receipt by the Commission.
(i) Signatures. Where section 16 of the Act, or the
rules or forms thereunder, require a document filed with or furnished
to the Commission to be signed, such document shall be manually signed,
or signed using either typed signatures or duplicated or facsimile
versions of manual signatures. Where typed, duplicated or facsimile
signatures are used, each signatory to the filing shall manually sign a
signature page or other document authenticating, acknowledging or
otherwise adopting his or her signature that appears in the filing.
Such document shall be executed before or at the time the filing is
made and shall be retained by the filer for a period of five years.
Upon request, the filer shall furnish to the Commission or its staff a
copy of any or all documents retained pursuant to this section.
(j) Where more than one person subject to section 16 of the act is
deemed to be a beneficial owner of the same equity securities, all such
persons must report as beneficial owners of the securities, either
separately or jointly. Where persons in a group are deemed to be
beneficial owners of equity securities pursuant to § 240.16a--1(a)(1)
due to the aggregation of holdings, a single form 3, 4 or 5 may be
filed on behalf of all persons in the group. Joint and group filings
must include all required information for each beneficial owner, and
such filings must be signed by each beneficial owner, or on behalf of
such owner by an authorized person.
(k) Any issuer that maintains a corporate Web site shall post on
that Web site by the end of the business day after filing any Form 3, 4
or 5 filed under section 16(a) of the Act as to the equity securities
of that issuer. Each such form shall remain accessible on such
issuer's Web site for at least a 12-month period. In the case of an
issuer that is an investment company and that does not maintain its own
Web site, if any of the issuer's investment adviser, sponsor,
depositor, trustee, administrator, principal underwriter, or any
affiliated person of the investment company maintains a Web site that
includes the name of the issuer, the issuer shall comply with the
posting requirements by posting the forms on one such Web
site.
{{6-30-05 p.9432.06}}
[Codified to 17 C.F.R. § 240.16a--3]
[Section 240.16a--3 added at 56 Fed. Reg. 7265, February
21, 1991, effective May 1, 1991; amended at 60 Fed. Reg. 26622, May 17,
1995, effective June 7, 1995; 61 Fed. Reg. 30404 and 30392, June 14,
1996, effective August 15, 1996; 61 Fed. Reg. 30404, June 14, 1996,
effective July 15, 1996; 67 Fed. Reg. 43535, June 28, 2002, effective
July 8, 2002; 67 Fed. Reg. 56467, September 3, 2002, effective August
29, 2002; 68 Fed. Reg. 25799, May 13, 2003, effective June 30,
2003]
§ 240.16a--4 Derivative securities.
(a) For purposes of section 16 of the act, both derivative
securities and the underlying securities to which they relate shall be
deemed to be the same class of equity securities, except
that the acquisition or disposition of any derivative security
shall be separately reported.
(b) The exercise or conversion of a call equivalent position shall
be reported on form 4 and treated for reporting purposes as:
(1) A purchase of the underlying security; and
(2) A closing of the derivative security position.
(c) The exercise or conversion of a put equivalent position shall
be reported on form 4 and treated for reporting purposes as:
(1) A sale of the underlying security; and
(2) A closing of the derivative security position.
(d) The disposition or closing of a long derivative security
position, as a result of cancellation or expiration, shall be exempt
from section 16(a) of the act if exempt from section 16(b) of the act
pursuant to § 240.16b--6(d).
Note to § 240.16a--4: A purchase or sale resulting
from an exercise or conversion of a derivative security may be exempt
from section 16(b) of the act pursuant to § 240.16b--3 or
§ 240.16b--6(b).
[Codified to 17 C.F.R. § 240.16a--4]
[Section 240.16a--4 added at 56 Fed. Reg. 7265, February 21, 1991,
effective May 1, 1991; amended at 56 Fed. Reg. 19927, May 1, 1991; 61
Fed. Reg. 30392, June 14, 1996, effective August 15,
1996]
§ 240.16a--5 Odd-lot dealers.
Transactions by an odd-lot dealer (a) in odd-lots as reasonably
necessary to carry on odd-lot transactions, or (b) in round lots to
offset odd-lot transactions previously or simultaneously executed or
reasonably anticipated in the usual course of business, shall be exempt
from the provisions of section 16(a) of the act with respect to
participation by such odd-lot dealer in such transaction.
[Codified to 17 C.F.R. § 240.16a--5]
[Section 240.16a--5 added at 56 Fed. Reg. 7265, February 21, 1991,
effective May 1, 1991]
§ 240.16a--6 Small acquisitions.
(a) Any acquisition of an equity security or the right to acquire
such securities, other than an acquisition from the issuer (including
an employee benefit plan sponsored by the issuer), not exceeding
$10,000 in market value shall be reported on form 5, subject to the
following conditions:
(1) Such acquisition, when aggregated with other acquisitions of
securities of the same class (including securities underlying
derivative securities, but excluding acquisitions exempted by rule from
section 16(b) or previously reported on form 4 or form 5) within the
prior six months, does not exceed a total of $10,000 in market value;
and
(2) The person making the acquisition does not within six months
thereafter make any disposition, other than by a transaction exempt
from section 16(b) of the act.
(b) If an acquisition no longer qualifies for the reporting
deferral in paragraph (a) of this section, all such acquisitions that
have not yet been reported must be reported on form 4 before the end of
the second business day following the day on which the conditions of
paragraph (a) of this section are no longer met.
{{6-30-03 p.9432.06-A}}
[Codified to 17 C.F.R. § 240.16a--6]
[Section 240.16a--6 added at 56 Fed. Reg. 7265, February
21, 1991, effective May 1, 1991; 61 Fed. Reg. 30392, June 14, 1996,
effective August 15, 1996; 67 Fed. Reg. 56467, September 3, 2002,
effective August 29, 2002; 68 Fed. Reg. May 13, 2003, effective June 9,
2003, reporting persons must comply with the electronic filing
requirements for beneficial ownership reports filed on or after June
30, 2003, issuers must comply with the Web site posting requirements as
to beneficial ownership reports filed on or after June 30, 2003, and
magnetic cartridges may not be used as a means of electronic filing
after June 27, 2003]
{{2-28-06 p.9432.07}}
§ 240.16a--7 Transactions effected in connection with a
distribution.
(a) Any purchase and sale, or sale and purchase, of a security that
is made in connection with the distribution of a substantial block of
securities shall be exempt from the provisions of section 16(a) of the
act, to the extent specified in this rule, subject to the following
conditions:
(1) The person effecting the transaction is engaged in the
business of distributing securities and is participating in good faith,
in the ordinary course of such business, in the distribution of such
block of securities; and
(2) The security involved in the transaction is:
(i) Part of such block of securities and is acquired by the
person effecting the transaction, with a view to distribution thereof,
from the issuer or other person on whose behalf such securities are
being distributed or from a person who is participating in good faith
in the distribution of such block of securities; or
(ii) A security purchased in good faith by or for the account of
the person effecting the transaction for the purpose of stabilizing the
market price of securities of the class being distributed or to cover
an over-allotment or other short position created in connection with
such distribution.
(b) Each person participating in the transaction must qualify on an
individual basis for an exemption pursuant to this section.
[Codified to 17 C.F.R. § 240.16a--7]
[Section 240.16a--7 added at 56 Fed. Reg. 7265, February 21, 1991,
effective May 1, 1991]
§ 240.16a--8 Trusts.
(a) Persons subject to section 16. (1)
Trusts. A trust shall be subject to
section 16 of the Act with
respect to securities of the issuer if the trust is a beneficial owner,
pursuant to § 240.16a--1(a)(1), of more than ten percent of any class
of equity securities of the issuer registered pursuant to section 12 of
the Act ("ten percent beneficial owner").
(2) Trustees, beneficiaries, and settlors. In
determining whether a trustee, beneficiary, or settlor is a ten percent
beneficial owner with respect to the issuer:
(i) Such persons shall be deemed the beneficial owner of the
issuer's securities held by the trust, to the extent specified by
§ 240.16a--1(a)(1); and
(ii) Settlors shall be deemed the beneficial owner of the
issuer's securities held by the trust where they have the power to
revoke the trust without the consent of another person.
(b) Trust holdings and transactions. Holdings and
transactions in the issuer's securities held by a trust shall be
reported by the trustee on behalf of the trust, if the trust is subject
to section 16 of the Act, except as provided below. Holdings and
transactions in the issuer's securities held by a trust (whether or not
subject to section 16 of the Act) may be reportable by other parties as
follows:
(1) Trusts. The trust need not report holdings and
transactions in the issuer's securities held by the trust in an
employee benefit plan subject to the Employee Retirement Income
Security Act over which no trustee exercises investment control.
(2) Trustees. If, as provided by § 240.16a--1(a)(2),
a trustee subject to section 16 of the act has a pecuniary interest in
any holding or transaction in the issuer's securities held by the
trust, such holding or transaction shall be attributed to the trustee
and shall be reported by the trustee in the trustee's individual
capacity, as well as on behalf of the trust. With respect to
performance fees and holdings of the trustee's immediate family,
trustees shall be deemed to have a pecuniary interest in the trust
holdings and transactions in the following circumstances:
(i) A performance fee is received that does not meet the proviso
of § 240.16a--1(a)(2)(ii)(C); or
(ii) At least one beneficiary of the trust is a member of the
trustee's immediate family. The pecuniary interest of the immediate
family member(s) shall be attributed to and reported by the trustee.
(3) Beneficiaries. A beneficiary subject to section 16
of the act shall have or share reporting obligations with respect to
transactions in the issuer's securities held by the trust, if the
beneficiary is a beneficial owner of the securities pursuant to
§ 240.16a--1(a)(2), as follows:
{{2-28-06 p.9432.08}}
Note to Paragraph (b)(3): Transactions and holdings
attributed to a trust beneficiary may be reported by the trustee on
behalf of the beneficiary, provided that the report is signed by the
beneficiary or other authorized person. Where the transactions and
holdings are attributed both to the trustee and trust beneficiary, a
joint report may be filed in accordance with § 240.16a--3(j).
(i) If a beneficiary shares investment control with the trustee
with respect to a trust transaction, the transaction shall be
attributed to and reported by both the beneficiary and the trust;
(ii) If a beneficiary has investment control with respect to a
trust transaction without consultation with the trustee, the
transaction shall be attributed to and reported by the beneficiary
only; and
(iii) In making a determination as to whether a beneficiary is
the beneficial owner of the securities pursuant to
§ 240.16a--1(a)(2), beneficiaries shall be deemed to have a pecuniary
interest in the issuer's securities held by the trust to the extent of
their pro rata interest in the trust where the trustee does not
exercise exclusive investment control.
(4) Settlors. If a settlor subject to section 16 of
the act reserves the right to revoke the trust without the consent of
another person, the trust holdings and transactions shall be attributed
to and reported by the settlor instead of the trust; Provided,
however, That if the settlor does not exercise or share investment
control over the issuer's securities held by the trust, the trust
holdings and transactions shall be attributed to and reported by the
trust instead of the settlor.
(c) Remainder interests. Remainder interests in a trust
are deemed not to confer beneficial ownership for purposes of section
16 of the act, provided that the persons with the remainder interests
have no power, directly or indirectly, to exercise or share investment
control over the trust.
(d) A trust, trustee, beneficiary or settlor becoming subject to
section 16(a) of the act pursuant to this rule also shall be subject to
sections 16(b) and 16(c) of the Act.
[Codified to 17 C.F.R. § 240.16a--8]
[Section 240.16a--8 added at 56 Fed. Reg. 7265, February 21, 1991,
effective May 1, 1991; amended at 56 Fed. Reg. 19927, May 1, 1991; 61
Fed. Reg. 30392, June 14, 1996, effective August 15, 1996; 67 Fed. Reg.
56467, September 3, 2002, effective August 29,
2002]
§ 240.16a--9 Stock splits, stock dividends, and pro rata
rights.
The following shall be exempt from
section 16 of the act:
(a) The increase or decrease in the number of securities held as a
result of a stock split or stock dividend applying equally to all
securities of a class, including a stock dividend in which equity
securities of a different issuer are distributed; and
(b) The acquisition of rights, such as shareholder or pre-emptive
rights, pursuant to a pro rata grant to all holders of the same class
of equity securities registered under section 12 of the Act.
NOTE: The exercise or sale of a pro rata right
shall be reported pursuant to § 240.16a--4 and the exercise shall be
eligible for exemption from section 16(b) of the Act pursuant to
§ 240.16b--6(b).
{{10-31-02 p.9432.08-A}}
[Codified to 17 C.F.R. § 240.16a--9]
[Section 240.16a--9 added at 56 Fed. Reg. 7265, February 21, 1991,
effective May 1, 1991; 61 Fed. Reg. 30393, June 14, 1996, effective
August 15, 1996]
§ 240.16a--10 Exemptions under section
16(a).
Except as provided in § 240.16a--6, any transaction exempted from
the requirements of section
16(a) of the act, insofar as it is otherwise subject to the
provisions of section 16(b), shall be likewise exempt from section
16(b) of the act.
[Codified to 17 C.F.R. § 240.16a--10]
[Section 240.16a--10 added at 56 Fed. Reg. 7265, February
21, 1991, effective May 1, 1991]
{{6-30-97 p.9432.09}}
§ 240.16a--11 Dividend or interest reinvestment plans.
Any acquisition of securities resulting from the reinvestment of
dividends or interest on securities of the same issuer shall be exempt
from section 16 of the act if the acquisition is made pursuant to a
plan providing for the regular reinvestment of dividends or interest
and the plan provides for broad-based participation, does not
discriminate in favor of employees of the issuer, and operates on
substantially the same terms for all plan participants.
[Codified to 17 C.F.R. § 240.16a--11]
[Section 240.16a--11 added at 61 Fed. Reg. 30393, June 14, 1996,
effective August 15,
1996]
§ 240.16a--12 Domestic relations orders.
The acquisition or disposition of equity securities pursuant to a
domestic relations order, as defined in the Internal Revenue Code or
Title I of the Employee Retirement Income Security Act, or the rules
thereunder, shall be exempt from
section 16 of the act.
[Codified to 17 C.F.R. § 240.16a--12]
[Section 240.16a--12 added at 61 Fed. Reg. 30393, June 14, 1996,
effective August 15,
1996]
§ 240.16a--13 Change in form of beneficial ownership.
A transaction, other than the exercise or conversion of a derivative
security or deposit into or withdrawal from a voting trust, that
effects only a change in the form of beneficial ownership without
changing a person's pecuniary interest in the subject equity securities
shall be exempt from section 16
of the act.
[Codified to 17 C.F.R. § 240.16a--13]
[Section 240.16a--13 added at 61 Fed. Reg. 30393, June 14, 1996,
effective August 15,
1996]
§ 240.16b--1 Transactions approved by a regulatory authority.
(a) Any purchase and sale, or sale and purchase, of a security
shall be exempt from section 16(b) of the act, if the transaction is
effected by an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a--1 et seq.) and both the
purchase and sale of such security have been exempted from the
provisions of section 17(a) (15 U.S.C.
80a--17(a)) of the Investment Company Act of 1940, by rule or
order of the Commission.
(b) Any purchase and sale, or sale and purchase, of a security
shall be exempt from the provisions of section 16(b) of the act if:
(1) The person effecting the transaction is either a holding
company registered under the Public Utility Holding Company Act of 1935
(15 U.S.C. 79a et seq.) or a subsidiary thereof; and
(2) Both the purchase and the sale of the security have been
approved or permitted by the Commission pursuant to the applicable
provisions of that act and the rules and regulations thereunder.
[Codified to 17 C.F.R. § 240.16b--1]
[Section 240.16b--1 added at 56 Fed. Reg. 7270, February 21, 1991,
effective May 1, 1991; amended at 61 Fed. Reg. 30404, June 14, 1996,
effective July 15, 1996]
§ 240.16b--2 [Reserved]
§ 240.16b--3 Transactions between an issuer and its officers or
directors.
(a) General. A transaction between the issuer (including
an employee benefit plan sponsored by the issuer) and an officer or
director of the issuer that involves issuer equity securities shall be
exempt from section 16(b) of the act if the transaction satisfies the
applicable conditions set forth in this section.
(b) Definitions.
{{6-30-97 p.9432.10}}
(1) A Discretionary Transaction shall mean a
transaction pursuant to an employee benefit plan that:
(i) Is at the volition of a plan participant;
(ii) Is not made in connection with the participant's death,
disability, retirement or termination of employment;
(iii) Is not required to be made available to a plan participant
pursuant to a provision of the Internal Revenue Code; and
(iv) Results in either an intra-plan transfer involving an issuer
equity securities fund, or a cash distribution funded by a volitional
disposition of an issuer equity security.
(2) An Excess Benefit Plan shall mean an employee
benefit plan that is operated in conjunction with a Qualified Plan, and
provides only the benefits or contributions that would be provided
under a Qualified Plan but for any benefit or contribution limitations
set forth in the Internal Revenue Code of 1986, or any successor
provisions thereof.
(3)(i) A Non-Employee Director shall mean a director
who:
(A) Is not currently an officer (as defined in
§ 240.16a--1(f)) of
the issuer or a parent or subsidiary of the issuer, or otherwise
currently employed by the issuer or a parent or subsidiary of the
issuer;
(B) Does not receive compensation, either directly or indirectly,
from the issuer or a parent or subsidiary of the issuer, for services
rendered as a consultant or in any capacity other than as a director,
except for an amount that does not exceed the dollar amount for which
disclosure would be required pursuant to § 229.404(a) of this
chapter;
(C) Does not possess an interest in any other transaction for
which disclosure would be required pursuant to § 229.404(a) of this
chapter; and
(D) Is not engaged in a business relationship for which
disclosure would be required pursuant to § 229.404(b) of this
chapter.
(ii) Notwithstanding paragraph (b)(3)(i) of this section, a
Non-Employee Director of a closed-end investment company
shall mean a director who is not an "interested person" of the
issuer, as that term is defined in
section 2(a)(19) of the
Investment Company Act of 1940.
(4) A Qualified Plan shall mean an employee benefit
plan that satisfies the coverage and participation requirements of
sections 410 and 401(a)(26) of the Internal Revenue Code of 1986, or
any successor provisions thereof.
(5) A Stock Purchase Plan shall mean an employee
benefit plan that satisfies the coverage and participation requirements
of sections 423(b)(3) and 423(b)(5), or section 410, of the Internal
Revenue Code of 1986, or any successor provisions thereof.
(c) Tax-conditioned plans. Any transaction (other than a
Discretionary Transaction) pursuant to a Qualified Plan, an Excess
Benefit Plan, or a Stock Purchase Plan shall be exempt without
condition.
{{8-31-98 p.9432.11}}
(d) Grants, awards and other acquisitions from the issuer.
Any transaction involving a grant, award or other acquisition from
the issuer (other than a Discretionary Transaction) shall be exempt if:
(1) The transaction is approved by the board of directors of the
issuer, or a committee of the board of directors that is composed
solely of two or more Non-Employee Directors;
(2) The transaction is approved or ratified, in compliance with
section 14 of the act, by either: the affirmative votes of the holders
of a majority of the securities of the issuer present, or represented,
and entitled to vote at a meeting duly held in accordance with the
applicable laws of the state or other jurisdiction in which the issuer
is incorporated; or the written consent of the holders of a majority of
the securities of the issuer entitled to vote; provided that
such ratification occurs no later than the date of the next annual
meeting of shareholders; or
(3) The issuer equity securities so acquired are held by the
officer or director for a period of six months following the date of
such acquisition, provided that this condition shall be
satisfied with respect to a derivative security if at least six months
elapse from the date of acquisition of the derivative security to the
date of disposition of the derivative security (other than upon
exercise or conversion) or its underlying equity security.
(e) Dispositions to the issuer. Any transaction
involving the disposition to the issuer of issuer equity securities
(other than a Discretionary Transaction) shall be exempt,
provided that the terms of such disposition are approved in
advance in the manner prescribed by either paragraph (d)(1) or
paragraph (d)(2) of this section.
(f) Discretionary Transactions. A Discretionary
Transaction shall be exempt only if effected pursuant to an election
made at least six months following the date of the most recent
election, with respect to any plan of the issuer, that effected a
Discretionary Transaction that was:
(1) An acquisition, if the transaction to be exempted would be a
disposition; or
(2) A disposition, if the transaction to be exempted would be an
acquisition.
Note (1): The exercise or conversion of a derivative
security that does not satisfy the conditions of this section is
eligible for exemption from section 16(b) of the act to the extent that
the conditions of § 240.16b--6(b) are satisfied.
Note (2): Section 16(a) reporting requirements
applicable to transactions exempt pursuant to this section are set
forth in
§ 240.16a--3(f) and
(g) and § 240.16a--4.
Note (3): The approval conditions of paragraphs (d)(1),
(d)(2) and (e) of this section require the approval of each specific
transaction, and are not satisfied by approval of a plan in its
entirety except for the approval of a plan pursuant to which the terms
and conditions of each transaction are fixed in advance, such as a
formula plan. Where the terms of a subsequent transaction (such as the
exercise price of an option, or the provision of an exercise or tax
withholding right) are provided for in a transaction as initially
approved pursuant to paragraphs (d)(1), (d)(2) or (e), such subsequent
transaction shall not require further specific approval.
[Codified to 17 C.F.R. § 240.16b--3]
[Section 240.16b--3 added at 56 Fed. Reg. 7270, February 21, 1991,
effective May 1, 1991; amended at 56 Fed. Reg. 19927, May 1, 1991; 61
Fed. Reg. 30393, June 14, 1996, effective August 15,
1996]
§ 240.16b--4 [Reserved]
[Codified to 17 C.F.R. § 240.16b--4]
[Section 240.16b--4 added at 56 Fed. Reg. 7270, February
21, 1991, effective May 1, 1991; removed and reserved at 61 Fed. Reg.
30404, June 14, 1996, effective July 15, 1996]
{{8-31-98 p.9432.12}}
§ 240.16b--5 Bona fide gifts and inheritance.
Both the acquisition and the disposition of equity securities shall
be exempt from the operation of section 16(b) of the act if they are:
(a) Bona fide gifts; or (b) transfers of securities by will or the laws
of descent and distribution.
[Codified to 17 C.F.R. § 240.16b--5]
[Section 240.16b--5 added at 56 Fed. Reg. 7270, February 21, 1991,
effective May 1, 1991]
§ 240.16b--6 Derivative securities.
(a) The establishment of or increase in a call equivalent position
or liquidation of or decrease in a put equivalent position shall be
deemed a purchase of the underlying security for purposes of section
16(b) of the act, and the establishment of or increase in a put
equivalent position or liquidation of or decrease in a call equivalent
position shall be deemed a sale of the underlying securities for
purposes of section 16(b) of the act: Provided, however,
That if the increase or decrease occurs as a result of the fixing
of the exercise price of a right initially issued without a fixed
price, where the date the price is fixed is not known in advance and is
outside the control of the recipient, the increase or decrease shall be
exempt from section 16(b) of the act with respect to any offsetting
transaction within the six months prior to the date the price is fixed.
(b) The closing of a derivative security position as a result of
its exercise or conversion shall be exempt from the operation of
section 16(b) of the act, and the acquisition of underlying securities
at a fixed exercise price due to the exercise or conversion of a call
equivalent position or the disposition of underlying securities at a
fixed exercise price due to the exercise of a put equivalent position
shall be exempt from the operation of section 16(b) of the act:
Provided, however, That the acquisition of underlying
securities from the exercise of an out-of-the-money option, warrant, or
right shall not be exempt unless the exercise is necessary to comport
with the sequential exercise provisions of the Internal Revenue Code
(26 U.S.C. 422A).
Note: The exercise or conversion of a derivative
security that does not satisfy the conditions of this section is
eligible for exemption from section 16(b) of the act to the extent that
the conditions of § 240.16b--3 are satisfied.
(c) In determining the short-swing profit recoverable pursuant to
section 16(b) of the act from transactions involving the purchase and
sale or sale and purchase of derivative and other securities, the
following rules apply:
(1) Short-swing profits in transactions involving the purchase
and sale or sale and purchase of derivative securities that have
identical characteristics (e.g., purchases and sales of call
options of the same strike price and expiration date, or purchases and
sales of the same series of convertible debentures) shall be measured
by the actual prices paid or received in the short-swing transactions.
(2) Short-swing profits in transactions involving the purchase
and sale or sale and purchase of derivative securities having different
characteristics but related to the same underlying security
(e.g., the purchase of a call option and the sale of a
convertible debenture) or derivative securities and underlying
securities shall not exceed the difference
{{6-28-96 p.9432.13}}in price
of the underlying security on the date of purchase or sale and the date
of sale or purchase. Such profits may be measured by calculating the
short-swing profits that would have been realized had the subject
transactions involved purchases and sales solely of the derivative
security that was purchased or solely of the derivative security that
was sold, valued as of the time of the matching purchase or sale, and
calculated for the lesser of the number of underlying securities
actually purchased or sold.
(d) Upon cancellation or expiration of an option within six months
of the writing of the option, any profit derived from writing the
option shall be recoverable under section 16(b) of the act. The profit
shall not exceed the premium received for writing the option. The
disposition or closing of a long derivative security position, as a
result of cancellation or expiration, shall be exempt from section
16(b) of the act where no value is received from the cancellation or
expiration.
[Codified to 17 C.F.R. § 240.16b--6]
[Section 240.16b--6 added at 56 Fed. Reg. 7270, February 21, 1991,
effective May 1, 1991; 61 Fed. Reg. 30394, June 14, 1996, effective
August 15, 1996]
§ 240.16b--7 Mergers, reclassifications, and
consolidations.
(a) The following transactions shall be exempt from the provisions
of section 16(b) of the act:
(1) The acquisition of a security of a company, pursuant to a
merger or consolidation, in exchange for a security of a company which,
prior to the merger or consolidation, owned 85 percent or more of
either--
(i) The equity securities of all other companies involved in the
merger or consolidation, or in the case of a consolidation, the
resulting company; or
(ii) The combined assets of all the companies involved in the
merger or consolidation, computed according to their book values prior
to the merger or consolidation as determined by reference to their most
recent available financial statements for a 12 month period prior to
the merger or consolidation, or such shorter time as the company has
been in existence.
(2) The disposition of a security, pursuant to a merger or
consolidation, of a company which, prior to the merger or
consolidation, owned 85 percent or more of either
(i) The equity securities of all other companies involved in the
merger or consolidation or, in the case of a consolidation, the
resulting company; or
(ii) The combined assets of all the companies undergoing merger
or consolidation, computed according to their book values prior to the
merger or consolidation as determined by reference to their most recent
available financial statements for a 12 month period prior to the
merger or consolidation.
(b) A merger within the meaning of this section shall include the
sale or purchase of substantially all the assets of one company by
another in exchange for equity securities which are then distributed to
the security holders of the company that sold its assets.
(c) Notwithstanding the foregoing, if a person subject to section
16 of the act makes any non-exempt purchase of a security in any
company involved in the merger or consolidation and any non-exempt sale
of a security in any company involved in the merger or consolidation
within any period of less than six months during which the merger or
consolidation took place, the exemption provided by this rule shall be
unavailable to the extent of such purchase and sale.
[Codified to 17 C.F.R. § 240.16b--7]
[Section 240.16b--7 added at 56 Fed. Reg. 7270, February 21, 1991,
effective May 1, 1991]
§ 240.16b--8 Voting trusts.
Any acquisition or disposition of an equity security or
certificate representing equity securities involved in the deposit or
withdrawal from a voting trust or deposit agreement shall be exempt
from section 16(b) of the act if substantially all of the assets held
under the voting trust or deposit agreement immediately after the
deposit or immediately prior to the
{{6-28-96 p.9432.14}}withdrawal
consisted of equity securities of the same class as the security
deposited or withdrawn: Provided, however, That this
exemption shall not apply if there is a non-exempt purchase or sale of
an equity security of the class deposited within six months (including
the date of withdrawal or deposit) of a non-exempt sale or purchase,
respectively, of any certificate representing such equity security
(other than the actual deposit or withdrawal).
[Codified to 17 C.F.R. § 240.16b--8]
[Section 240.16b--8 added at 56 Fed. Reg. 7270, February
21, 1991, effective May 1, 1991]
{{12-29-06 p.9432.15}}
§ 240.16c--1 Brokers.
Any transaction shall be exempt from section 16(c) of the act to the
extent necessary to render lawful the execution by a broker of an order
for an account in which the broker has no direct or indirect interest.
[Codified to 17 C.F.R. § 240.16c--1]
[Section 240.16c--1 added at 56 Fed. Reg. 7273, February 21, 1991,
effective May 1, 1991]
§ 240.16c--2 Transactions effected in connection with a
distribution.
Any transaction shall be exempt from section 16(c) of the act to the
extent necessary to render lawful any sale made by or on behalf of a
dealer in connection with a distribution of a substantial block of
securities, where the sale is represented by an over-allotment in which
the dealer is participating as a member of an underwriting group, or
the dealer or a person acting on the dealer's 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 acquired is subject to a
prior offering to existing security holders or some other class of
persons.
[Codified to 17 C.F.R. § 240.16c--2]
[Section 240.16c--2 added at 56 Fed. Reg. 7273, February 21, 1991,
effective May 1, 1991]
§ 240.16c--3 Exemption of sales of securities to be
acquired.
(a) Whenever any person is entitled, incident to ownership of an
issued security and without the payment of consideration, to receive
another security "when issued" or "when distributed," the
sale of the security to be acquired shall be exempt from the operation
of section 16(c) of the act:
Provided, That:
(1) The sale is made subject to the same conditions as those
attaching to the right of acquisition;
(2) Such person exercises reasonable diligence to deliver such
security to the purchaser promptly after the right of acquisition
matures; and
(3) Such person reports the sale on the appropriate form for
reporting transactions by persons subject to section 16(a) of the act.
(b) This section shall not exempt transactions involving both a
sale of the issued security and a sale of a security "when
issued" or "when distributed" if the combined transactions
result in a sale of more securities than the aggregate of issued
securities owned by the seller plus those to be received for the other
security "when issued" or "when distributed."
[Codified to 17 C.F.R. § 240.16c--3]
[Section 240.16c--3 added at 56 Fed. Reg. 7273, February 21, 1991,
effective May 1, 1991]
§ 240.16c--4 Derivative securities.
Establishing or increasing a put equivalent position shall be exempt
from section 16(c) of the act, so long as the amount of securities
underlying the put equivalent position does not exceed the amount of
underlying securities otherwise owned.
[Codified to 17 C.F.R. § 240.16c--4]
[Section 240.16c--4 added at 56 Fed. Reg. 7273, February 21, 1991,
effective May 1, 1991]
§ 240.16e--1 Arbitrage transactions under section 16.
It shall be unlawful for any director or officer of an issuer of an
equity security which is registered pursuant to section 12 of the act
to effect any foreign or domestic arbitrage transaction in any equity
security of such issuer, whether registered or not, unless he shall
include such transaction in the statements required by
section 16(a) and shall account
to such issuer for the profits arising from such transaction, as
provided in section 16(b). The
{{12-29-06 p.9432.16}}provision
of section 16(c) shall not apply to such arbitrage transactions. The
provisions of section 16(c) shall not apply to any bona fide foreign or
domestic arbitrage transaction insofar as it is effected by any person
other than such director or officer of the issuer of such security.
[Codified to 17 C.F.R. § 240.16e--1]
[Section 240.16e--1 added at 30 Fed. Reg. 2025, February 13,
1965]
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