§ 240.12a-5 Temporary exemption of substituted or additional securities.  


Latest version.
  • (a)(1) Subject to the conditions of paragraph (a)(2) of this section, whenever the holders of a security admitted to trading on a national securities exchange (hereinafter called the original security) obtain the right, by operation of law or otherwise, to acquire all or any part of a class of another or substitute security of the same or another issuer, or an additional amount of the original security, then:

    (i) All or any part of the class of such other or substituted security shall be temporarily exempted from the operation of section 12(a) to the extent necessary to render lawful transactions therein on an issued or “when-issued” basis on any national securities exchange on which the original, the other or the substituted security is lawfully admitted to trading; and

    (ii) The additional amount of the original security shall be temporarily exempted from the operation of section 12(a) to the extent necessary to render lawful transactions therein on a “when-issued” basis on any national securities exchange on which the original security is lawfully admitted to trading.

    (2) The exemptions provided by paragraph (a)(1) of this section shall be available only if the following conditions are met:

    (i) A registration statement is in effect under the Securities Act of 1933 to the extent required as to the security which is the subject of such exemption, or the terms of any applicable exemption from registration under such act have been complied with, if required;

    (ii) Any stockholder approval necessary to the issuance of the security which is the subject of the exemption, has been obtained; and

    (iii) All other necessary official action, other than the filing or recording of charter amendments or other documents with the appropriate State authorities, has been taken to authorize and assure the issuance of the security which is the subject of such exemption.

    (b) The exemption provided by this section shall terminate on the earliest of the following dates:

    (1) When registration of the exempt security on the exchange become effective;

    (2) When the exempt security is granted unlisted trading privileges on the exchange;

    (3) The close of business on the tenth day after (i) withdrawal of an application for registration of the exempt security on the exchange; (ii) withdrawal by the exchange of its certification of approval of the exempt security for listing and registration; (iii) withdrawal of an application for admission of the exempt security to unlisted trading privileges on the exchange; or (iv) the sending to the exchange of notice of the entry of an order by the Commission denying any application for admission of the exempt security to unlisted trading privileges on the exchange;

    (4) The close of business on the one hundred and twentieth day after the date on which the exempt security was admitted by action of the exchange to trading thereon as a security exempted from the operation of section 12 (a) by this section, unless prior thereto an application for registration of the exempt security or for admission of the exempt security to unlisted trading privileges on the exchange has been filed.

    (c) Notwithstanding paragraph (b) of this section, the Commission, having due regard for the public interest and the protection of investors, may at any time extend the period of exemption of any security by this rule or may sooner terminate the exemption upon notice to the exchange and to the issuer of the extension or termination thereof.

    (d) The Exchange shall file with the Commission a notification on Form 261 promptly after taking action to admit any security to trading under this section: Provided, however, That no notification need be filed under this section concerning the admission or proposed admission to trading of additional amounts of a class of security admitted to trading on such exchange.

    (e) Section 240.10b-1 shall be applicable to all securities exempted from the operation of section 12(a) of the act by this section.

    (Secs. 3, 12, 48 Stat. 882, 892; 15 U.S.C. 78c (12), 78l)

    [13 FR 8185, Dec. 22, 1948, as amended at 19 FR 669, Feb. 5, 1954; 20 FR 2081, Apr. 2, 1955; 53 FR 41206, Oct. 20, 1988]

[13 FR 8185, Dec. 22, 1948, as amended at 19 FR 669, Feb. 5, 1954; 20 FR 2081, Apr. 2, 1955; 53 FR 41206, Oct. 20, 1988