S.D. Admin. R. 20:06:04:45

Current through Register Vol. 51, page 67, December 16, 2024

Section 20:06:04:45 - Exemption from insider trading of the act of sales of securities to be acquired

When any person is entitled, as an incident to the person's 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 is exempt from the operation of SDCL 58-5-70 provided that:

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

(2) The person exercises reasonable diligence to deliver the security to the purchaser promptly after the person's right of acquisition matures; and

(3) The person reports the sale on the appropriate form for reporting transaction by persons subject to SDCL 58-5-69.

This section may 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 the seller pursuant to the seller's right of acquisition.

S.D. Admin. R. 20:06:04:45

4 SDR 6, effective 8/9/1977; 12 SDR 151, 12 SDR 155, effective 7/1/1986.

General Authority: SDCL 58-5-77.

Law Implemented: SDCL 58-5-70.