Current through Register Vol. 56, No. 24, December 18, 2024
(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
N.J.S.A. 17:17B-2, to the extent specified
in this subsection 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 distribution of such block of
securities and in the ordinary course of such business;
2. The security involved in the transaction
is:
i. 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 insurer 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; and
3. Other persons not within the purview of
N.J.S.A. 17:17B-2 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
N.J.S.A. 17:17B-2 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.
