Securities Lawyer's Deskbook                          published by The University of Cincinnati College of Law

Rule 153 -- Definition of "Preceded by a Prospectus," as Used in Section 5(b)(2), in Relation to Certain Transactions

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1. Definition of preceded by a prospectus. The term preceded by a prospectus as used in section 5(b)(2) of the Act, regarding any requirement of a broker or dealer to deliver a prospectus to a broker or dealer as a result of a transaction effected between such parties on or through a national securities exchange or facility thereof, trading facility of a national securities association, or an alternative trading system, shall mean the satisfaction of the conditions in paragraph (b) of this section.
   
   
2. Conditions. Any requirement of a broker or dealer to deliver a prospectus for transactions covered by paragraph (a) of this section will be satisfied if:
   
   
   1. Securities of the same class as the securities that are the subject of the transaction are trading on that national securities exchange or facility thereof, trading facility of a national securities association, or alternative trading system;
      
      
   2. The registration statement relating to the offering is effective and is not the subject of any pending proceeding or examination under section 8(d) or 8(e) of the Act;
      
      
   3. Neither the issuer, nor any underwriter or participating dealer is the subject of a pending proceeding under section 8A of the Act in connection with the offering; and
      
      
   4. The issuer has filed or will file with the Commission a prospectus that satisfies the requirements of section 10(a) of the Act.
      
      
3. Definitions.
   
   
   1. The term national securities exchange, as used in this section, shall mean a securities exchange registered as a national securities exchange under section 6 of the Securities Exchange Act of 1934.
      
      
   2. The term trading facility, as used in this section, shall mean a trading facility sponsored and governed by the rules of a registered securities association or a national securities exchange.
      
      
   3. The term alternative trading system, as used in this section, shall mean an alternative trading system as defined in Rule 300(a) of Regulation ATS under the Securities Exchange Act of 1934 registered with the Commission pursuant to Rule 301 of Regulation ATS under the Securities Exchange Act of 1934.

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