General Rules and Regulations
Securities Act of 1933
Rule 142 -- Definition of "Participates" and "Participation," as Used in
Section 2(a)(11), in Relation to Certain Transactions
The terms participates and participation
in section 2(a)(11) shall not include the
interest of a person
who is not in privity of contract with the issuer
nor directly or indirectly controlling, controlled by, or under common control with,
the issuer, and
who has no association with any principal underwriter
of the securities being distributed, and
whose function in the distribution is confined to
an undertaking to purchase all or some specified proportion of the securities remaining
unsold after the lapse of some specified period of time, and
who purchases such securities for investment and not
with a view to distribution.
As used in this section:
The term issuer shall have the meaning
defined in section 2(a)(4) and in the last
sentence of section 2(a)(11).
The term association shall include a relationship
between two persons under which one:
Is directly or indirectly controlling, controlled
by, or under common control with, the other, or
Has, in common with the other, one or more partners,
officers, directors, trustees, branch managers, or other persons occupying a similar
status or performing similar functions, or
Has a participation, direct or indirect, in the
profits of the other, or has a financial stake, by debtor-creditor relationship,
stock ownership, contract or otherwise, in the income or business of the other.
The term principal underwriter shall have
the meaning defined in Rule 405.
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