General Rules and Regulations
Securities Act of 1933
Rule 137 -- Publications or Distributions of Research Reports by Brokers or Dealers
That Are Not Participating In an Issuer's Registered Distribution of
Under the following conditions, the terms offers, participates, or participation in section 2(a)(11) of the Act shall not be deemed to apply to the
publication or distribution of research reports with respect to the securities of an issuer
which is the subject of an offering pursuant to a registration statement that the issuer
proposes to file, or has filed, or that is effective:
The broker or dealer (and any affiliate) that has distributed the report and,
if different, the person (and any affiliate) that has published the report have not
participated, are not participating, and do not propose to participate in the distribution of
the securities that are or will be the subject of the registered offering.
In connection with the publication or distribution of the research report,
the broker or dealer (and any affiliate) that has distributed the report and, if different, the
person (and any affiliate) that has published the report are not receiving and have not
received consideration directly or indirectly from, and are not acting under any direct or
indirect arrangement or understanding with:
The issuer of the securities;
A selling security holder;
Any participant in the distribution of the securities that are or will be the
subject of the registration statement; or
Any other person interested in the securities that are or will be the subject
of the registration statement.
Instruction to Rule 137(b) This paragraph (b) does not preclude payment of:
The regular price being paid by the broker or dealer for independent
research, so long as the conditions of this paragraph (b) are satisfied; or
The regular subscription or purchase price for the research report.
The broker or dealer publishes or distributes the research report in the
regular course of its business.
The issuer is not and during the past three years neither the issuer nor any
of its predecessors was:
A shell company, other than a business combination related shell
company, each as defined in Rule 405; or
An issuer for an offering of penny stock as defined in Rule 3a51-1 of the
Securities Exchange Act of 1934.
Definition of research report. For purposes of this section, research report
means a written communication, as defined in Rule 405, that includes information,
opinions, or recommendations with respect to securities of an issuer or an analysis of a
security or an issuer, whether or not it provides information reasonably sufficient upon
which to base an investment decision.
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