Full text of Federal Reserve Bank of New York Circulars : [Letter from Mr. Piderit transmitting copy of Rule 10b-17 of the Securities Exchange Act of 1934]

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Federal R

eserve
N e w

Y o r k ,

AREA

CODE

Ba n k o r N e w Y o r k
N.Y.
212

10045

7 3 2 -5 7 0 0

July 19, 1971

To All State Member Banks in the
Second Federal Reserve District:
Under Rule 10b- 17 of the Securities Exchange Act of 1934, adopted
by the Securities and Exchange Commission effective July 12, 1971, issuers
of "publicly traded securities'' are required to give advance notice of
certain actions, specified in paragraph (a) of the Rule, to the National
Association of Securities Dealers, Inc. or to the exchange on which securities
of the issuer are registered.
Enclosed is a copy of Rule 10b-1 7 . Since the application of the
Rule to "publicly traded securities" may veil be broadly interpreted, your
bank may wish to consult with counsel in determining its application.




Fred W. P i d e r i t , J r . ,
Vice President

RULE 10b-17 UNTIMELY ANNOUNCEMENTS OF RECORD DATES
(a) It shall constitute a "manipulative or deceptive
device or contrivance” as used in Section 10(b) of the Act for
any issuer of a class of securities publicly traded by the use of
any means or instrumentality of interstate commerce or of the mails
or of any facility of any national securities exchange to fail to
give notice in accordance with paragraph (b) hereof of the following
actions relating to such class of securities:
(1)

a dividend or other distribution in
cash or in kind, except an ordinary
interest payment on a debt security,
but including a dividend or distri­
bution of any security of the same or
another issuer;

(2)

a stock split or reverse split; or

(3)

a rights or other subscription offering.

(b) Notice shall be deemed to have been given in accordance
with this rule only if:




(1)

given to the National Association of
Securities Dealers, Inc. no later than ten
days prior to the record date involved or,
in case of a rights subscription or other
offering if such 10 days advance notice is
not practical, on or before the record date
and in no event later than the effective
date of the registration statement to
which the offering relates, and such
notice includes:
(a)

title of the security to which the
declaration relates;

(b)

date of dieclaration;

(c)

date of record for determining
holders entitled to receive the
dividend or other distribution
or to participate in the stock
or reverse split;

0




-2(d)

date of payment or distribution or,
in the case of a stock or reverse
split or rights or other subscription •
offering, the date of delivery;

(e)

for a dividend or other distribution
including a stock or reverse split
or rights or other subscription offering;
f

(i)

(ii)

in cash, the amount of cash to be
paid or distributed per share,
except if exact per share cash dis­
tributions cannot be given because
of existing conversion rights which
may be exercised during the notice
period and which may affect the per
share cash distribution, then a
reasonable approximation of the per
share distribution may be provided
so long as the actual per share dis­
tribution is subsequently provided on
the record date;
in the same security, the amount of
the security outstanding immediately
prior to and immediately following the
dividend or distribution and the rate
of the dividend or distribution;

(iii)

in any other security of the same issuer,
the amount to be paid or distributed
and the rate of the dividend or distri­
bution;

(iv)

in any security of another issuer, the
name of the issuer and title of that
security, the amount to be paid or dis­
tributed, and the rate of the dividend
or distribution and if that security is
a right or a warrant, the subscription
price;

(v)

in any other property (including
securities not covered under sub­
divisions (ii) through (iv) above)
the identity of the property and its
value and basis for assigning that
va l u e ;

(f)

method of settlement of fractional
interests;

(g)

details of any condition which must
be satisfied or government approval
which must be secured to enable payment
or distribution; and in

(h)

the case of stock or reverse split in
addition to the aforementioned informa­
tion.
(i)

the name and address of the transfer
or exchange agent
or

(2)

The Commission, upon written request or upon
its own motion, exempts the issuer from com­
pliance with subparagraph (b)(1) of this rule
either unconditionally or on specified terms
or conditions, as not constituting a manipulative
or deceptive device or contrivance comprehended
within the purpose of this rule or;

(3)

given in accordance with procedures of the
national securities exchange or exchanges upon
which a security of such issuer is registered
pursuant to Section 12 of the Act which contain
requirements substantially comparable to those
set forth in subparagraph (b)(1) of this rule.

(c)
The provisions of this rule shall not apply, however, to
redeemable securities issued by open-end investment companies registered
with the Commission under the Investment Company Act of 1940.