(a) Any transaction
of purchase and sale, or sale and purchase, of a security which is effected in
connection with the distribution of a substantial block of securities shall be
exempt from the provisions of section
38a-119
of the 1965 supplement to the general statutes, to the extent herein specified,
as not comprehended within the purpose of said section, upon 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;
(2) the security involved in the transaction
is (A) a part of such block of securities and is acquired by the person
effecting the transaction, with a view to the 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 (B) 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, and
(3) other persons
not within the purview of said section
38a-119
are participating in the distribution of such block of securities on terms at
least as favorable as those on which such person is participating and to an
extent at least equal to the aggregate participation of all persons exempted
from the provisions of said section
38a-119
by this section. However, the performance of the functions of manager of a
distributing group and the receipt of a bona fide payment for performing such
functions shall not preclude an exemption which would otherwise be available
under this section.
(b)
The exemption of a transaction pursuant to this section with respect to the
participation therein of one party thereto shall not render such transaction
exempt with respect to participation of any other party therein unless such
other party also meets the conditions of this section.
