D.C. Mun. Regs. tit. 26, r. 26-A1420

Current through Register 71, No. 45, November 7, 2024

Rule 26-A1420 - EXEMPTION FROM SECTION 3(C) OF THE ACT OF SALES OF SECURITIES TO BE ACQUIRED

1420.1

Whenever any person is entitled, as an incident to his or her 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 3(c), provided that the following conditions are met:

(a) The sale is made subject to the same conditions as those attaching to the right of acquisition;

(b) The person exercises reasonable diligence to deliver the security to the purchaser promptly after his or her right of acquisition matures; and

(c) The person reports the sale on the appropriate form for reporting transactions by persons subject to Section 3(a) of the Act.

1420.2

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 (2) 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 or her pursuant to his or her right of acquisition.

D.C. Mun. Regs. tit. 26, r. 26-A1420