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

Rule 105 -- Short Selling in Connection with a Public Offering

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1. Unlawful Activity. In connection with an offering of securities for cash pursuant to a registration statement or a notification on Form 1-A filed under the Securities Act, it shall be unlawful for any person to cover a short sale with offered securities purchased from an underwriter or broker or dealer participating in the offering, if such short sale occurred during the shorter of:
   
   
   1. The period beginning five business days before the pricing of the offered securities and ending with such pricing; or
      
      
   2. The period beginning with the initial filing of such registration statement or notification on Form 1-A and ending with the pricing.
      
      
2. Excepted Offerings. This section shall not apply to offerings that are not conducted on a firm commitment basis.
   
   
3. Exemptive Authority. Upon written application or upon its own motion, the Commission may grant an exemption from the provisions of this section, either unconditionally or on specified terms and conditions, to any transaction or class of transactions, or to any security or class of securities. By the Commission.
   
   

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