Rule 101 --
Activities by Distribution Participants
Rule 101
Generally
prohibits underwriters, broker-dealers and other "distribution participants"
from purchasing the security being offered ("subject security")
during the "restricted period"
Issuers and
"selling security holders" are instead covered by
Rule 102
The
restricted period
begins one or five business days (depending on the trading
volume value of the security and the public float value of the
issuer) before the offering's pricing and continues through the
end of the offering
Certain types of securities and certain
kinds of activities are exempt
Prohibits
issuers, "selling security holders", and their "affiliated
purchasers" from bidding for or purchasing any "subject security"
and certain other related securities during the "restricted
period"
would expressly
prohibit abuses with "hot issue" IPOs
such as
conditioning or "tying" an allocation of shares in a "hot issue"
on an understanding that the customer would buy shares in
another, usually "cold," offering
or on paying
excessive commissions to the underwriter
SEC summaries
SEC exemptive authority
