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

Rule 12a-4 -- Exemption of Certain Warrants from Section 12(a)

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1. When used in this section, the following terms shall have the meaning indicated unless the context otherwise requires:
   
   
   1. The term "warrant" means any warrant or certificate evidencing a right to subscribe to or otherwise acquire another security, issued or unissued.
      
      
   2. The term "beneficiary security" means a security to the holders of which a warrant or right to subscribe to or otherwise acquire another security is granted.
      
      
   3. The term "subject security" means a security which is the subject of a warrant or right to subscribe to or otherwise acquire such security.
      
      
   4. The term "in the process of admission to dealing", in respect of a specified security means that
      
      
      1. an application has been filed pursuant to Section 12 (b) and(c) of the Act for the registration of such security on a national securities exchange; or
         
         
      2. the Commission has granted an application made pursuant to Section 12(f) of the Act to continue or extend unlisted trading privileges to such security on a national securities exchange; or
         
         
      3. written notice has been filed with the Commission by a national securities exchange to the effect that such security has been approved for admission to dealing as a security exempted from the operation of Section 12(a) of the Act.
         
         
2. Any issued or unissued warrant granted to the holders of a security admitted to dealing on a national securities exchange, shall be exempt from the operation of Section 12(a) of the Act to the extent necessary to render lawful the effecting of transactions therein on any national securities exchange
   
   
   1. on which the beneficiary security is admitted to dealing or
      
      
   2. on which the subject security is admitted to dealing or is in the process of admission to dealing, subject to the following terms and conditions:

      1. Such warrant by its terms expires within 90 days after the issuance thereof;
         
         
      2. A registration statement under the Securities Act of 1933 is in effect as to such warrant and as to each subject security, or the applicable terms of any exemption from such registration have been met in respect to such warrant and each subject security; and
         
         
      3. Within five days after the exchange has taken official action to admit such warrant to dealing, it shall notify the Commission of such action.
         
         
3. Notwithstanding paragraph (b) of this section, no exemption pursuant to this section shall be available for transactions in any such warrant on any exchange on which the beneficiary security is admitted to dealing unless:
   
   
   1. Each subject security is admitted to dealing or is in process of admission to dealing on a national securities exchange; or
      
      
   2. There is available from a registration statement and periodic reports or other data filed by the issuer of the subject security, pursuant to any act administered by the Commission, information substantially equivalent to that available with respect to a security listed and registered on a national securities exchange.
      
      
4. Notwithstanding the foregoing, an unissued warrant shall not be exempt pursuant to this section unless:
   
   
   1. Formal or official announcement has been made by the issuer specifying
      
      
      1. the terms upon which such warrant and each subject security is to be issued,
         
         
      2. the date, if any, as of which the security holders entitled to receive such warrant will be determined,
         
         
      3. the approximate date of the issuance of such warrant, and
         
         
      4. the approximate date of the issuance of each subject security; and,
         
         
   2. The members of the exchange are subject to rules which provide that the performance of the contract to purchase and sell an unissued warrant shall be conditioned upon the issuance of such warrant.
      
      
5. The Commission may by order deny or revoke the exemption of a warrant under this section, if, after appropriate notice and opportunity for hearing to the issuer of such warrant and to the exchange or exchanges on which such warrant is admitted to dealing as an exempted security, it finds that:
   
   
   1. Any of the terms or conditions of this section have not been met with respect to such exemption, or
      
      
   2. At any time during the period of such exemption transactions have been effected on any such exchanges in such warrant which
      
      
      1. create or induce a false, misleading or artificial appearance of activity,
         
         
      2. unduly or improperly influence the market price, or
         
         
      3. make a price which does not reflect the true state of the market; or
         
         
   3. Any other facts exist which make such denial or revocation necessary or appropriate in the public interest or for the protection of investors.
      
      
6. If it appears necessary or appropriate in the public interest or for the protection of investors, the Commission may summarily suspend the exemption of such warrant pending the determination by the Commission whether such exemption shall be denied or revoked.
   
   
7. Rule 10b-1 shall be applicable to any warrant exempted by this section.
   
   

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