Code of Federal Regulations · Section
§ 240.16a-7 — a-7 Transactions Effected In Connection With A Distribution
17 C.F.R. § 240.16a-7
(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.
Authorizing Statute
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Records and reports15 U.S.C. § 78q
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Registration of securities15 U.S.C. § 77f
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Registration and regulation of brokers and dealers15 U.S.C. § 78o
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Foreign securities exchanges15 U.S.C. § 78dd
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Information required in registration statement15 U.S.C. § 77g
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General provisions of a liquidation proceeding15 U.S.C. § 78fff
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Necessity for regulation15 U.S.C. § 78b
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Proxies15 U.S.C. § 78n
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Classes of securities under this subchapter15 U.S.C. § 77c
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Registration requirements for securities15 U.S.C. § 78l
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Executive compensation and corporate governance12 U.S.C. § 5221
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Findings and purposes12 U.S.C. § 5461
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Creation; membership; compensation and expenses12 U.S.C. § 241
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Short title15 U.S.C. § 78a
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Trading by members of exchanges, brokers, and dealers15 U.S.C. § 78k
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Manipulative and deceptive devices15 U.S.C. § 78j
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Operations of designated financial market utilities12 U.S.C. § 5465
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Definitions and application15 U.S.C. § 78c
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National securities exchanges15 U.S.C. § 78f
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Rules, regulations, and orders; annual reports15 U.S.C. § 78w
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Comprehensive energy plan15 U.S.C. § 781
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Transaction fees15 U.S.C. § 78ee
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Failure of corporate officers to certify financial reports18 U.S.C. § 1350