Αποτελέσματα Αναζήτησης
Topic: Compliance issues related to Rule 105 of Regulation M, which governs short selling prior to pricing of certain offerings. Key Takeaways: Investment advisers, investment companies, and broker-dealers should review their compliance programs to promote compliance with Rule 105 of Regulation M.
The Securities and Exchange Commission adopted amendments to Rule 105 of Regulation M to further safeguard the integrity of the capital raising process and protect issuers from manipulative activity that can reduce issuers' offering proceeds and dilute security holder value.
General Framework. Regulation M consists of six rules: Rule 100 sets forth the definitions of certain terms used in Regulation M. Rules 101 and 102 regulate bids for and purchases of the offered securities and certain other covered securities. More specifically: Rule 101 regulates bids and purchases by distribution participants.
While Regulation M covers a fairly wide spectrum of activities related to public offerings, Rule 105 is focused on one specific area of potential abuse, namely short selling prior to a follow-on public offering.
Rule 105 of Regulation M applies to: Firm-commitment, underwritten offerings; Of an equity security; That is offered for cash; Pursuant to a registration statement; Rule 105 prohibits selling short such a security within the five business days “before the pricing” of an offering and then purchasing securities through that offering.
3 Μαρ 2023 · Rule 105 contains exceptions to the general prohibition on purchasing in an offering after shorting subject securities during the applicable restricted period. The one most likely relevant to a typical private fund manager is the “bona fide purchase” exception.
Rule 104 governs stabilization transactions and certain post-offering activities by the underwriters, and Rule 105 governs short selling in anticipation of a public offering. The following questions and answers regarding Regulation M have been compiled by the staff of the Division of Trading and Markets to assist in the understanding and ...
