1. (1) Any sale of a subscription right to acquire any subject security of the same insurer is exempt from the provisions of section 5283 of the act, to the extent prescribed in this rule, as not comprehended within the purpose of section 5283 of the act, if all of the following occur:

   1. (a) The subscription right is acquired, directly or indirectly, from the insurer without the payment of consideration.
   2. (b) The subscription right by its terms expires within 45 days after the issuance thereof.
   3. (c) The subscription right by its terms is issued on a pro rata basis to all holders of the beneficiary security of the insurer.
   4. (d) A registration statement under the securities act of 1933 is in effect as to each subject security or the applicable terms of any exemption from such registration have been met in respect to each subject security.

2. (2) When used in this rule:

   1. (a) "Subscription right" means any warrant or certificate evidencing a right to subscribe to or otherwise acquire an equity security.
   2. (b) "Beneficiary security" means a security registered pursuant to section 12 of the securities exchange act, to the holders of which a subscription right is granted.
   3. (c) "Subject security" means a security which is the subject of a subscription right.
3. (3) Notwithstanding any provision of this rule, if a person purchases subscription rights for cash or other consideration, a sale by that person of subscription rights otherwise exempted by this rule will not be so exempted to the extent of such purchases within the 6- month period preceding or following the sale.

History: 1979 AC. REGULATIONS UNDER SECTION 5284 OF THE ACT