thereof, or from any person under direct or indirect common control with the issuer.

The exemption of a transaction pursuant to this rule with respect to the participation therein of one party thereto shall not render such transaction exempt with respect to participation of any other party therein unless such other party also meets the requirements of paragraphs (a), (b), and (c) of this rule.

Rule X-16B-3. Exemption From Section 16 (b) of Certain Transactions in Connection With Stock-Option Plans.

Any purchase and sale, or sale and purchase, of an equity security by a director, officer or employee of the issuer thereof, shall be exempted from the operation of section 16 (b) of the Securities Exchange Act of 1934, upon condition that

(1) Such purchase is or has been made directly from the issuer pursuant to the exercise of a non-transferable right to purchase granted on or before June 6, 1934, by the issuer during, or in connection with the initiation of, the bona fide employment by the issuer of the grantee of such right to purchase as an officer or employee; (2) Such sale is made after October 9, 1935;

(3) The granting of such right to purchase was approved by the vote of at least one class of stockholders of the issuer at a meeting, notice of which disclosed that the granting of such right was to be voted upon at such meeting; and

(4) The lowest price at which such equity security has been or is purchasable pursuant to such right to purchase is higher than the market price of such security at the time of such vote of stockholders.

EXEMPTION OF CERTAIN SECURITIES FROM SECTION 16 (c) Rule X-16C-1. Exemption of Certain Securities From Section 16 (c).

Any security shall be exempt from the operation of section 16 (c) to the extent necessary to render lawful under such section the execution by a broker of an order for an account in which he has no direct or indirect interest. *

ARBITRAGE TRANSACTIONS

Rule X-16D-1. Arbitrage Transactions Under Section 16.

It shall be unlawful for any director, or officer of an issuer of an equity security which is registered on a national securities exchange to effect any foreign or domestic arbitrage transaction in any equity security of such issuer, whether registered or not, unless he shall include such transaction in the statements required by section 16 (a) and rule X-16A-1 and shall account to such issuer for the

profits arising from such transaction, as provided in section 16 (b). The provisions of section 16 (c) shall not apply to such arbitrage transactions. The provisions of rule X-16A-1 and of section 16 shall not apply to any bona fide foreign or domestic arbitrage transaction insofar as it is effected by any person other than such director or officer of the issuer of such security.

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RULES UNDER SECTION 17 OF THE ACT

PRESERVATION OF RECORDS AND REPORTS OF CERTAIN
STABILIZING ACTIVITIES

Rule X-17A-2. Reports of Certain Stabilizing Activities.

(a) Every member of a national securities exchange, and every broker or dealer who transacts a business in securities through the medium of any such member, and every broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934, as amended, who effects any purchase for the purpose of pegging, fixing, or stabilizing (hereinafter referred to as stabilizing) the price of any security to facilitate an offering in respect of which a registration statement is filed under the Securities Act of 1933, as amended, shall send to the Commission a report on Form X-17A-1—

(1) On the first business day following each day on which any purchase or sale of the offered security or the security being stabilized is effected by the manager of the stabilizing syndicate, as such, or if there is no such syndicate, by such member, broker or dealer, for any account;

(2) On the first business day following each day on which such member, broker or dealer effects, otherwise than through the manager of the stabilizing syndicate, any purchase or sale of the offered security being stabilized, for any account; and

(3) Within three business days following the date on which the stabilizing is commenced, for each day in the twenty days preceding such date on which such member, broker, or dealer effected, for his own account any purchase or sale of the offered security or the security being stabilized.

(b) Notwithstanding the provisions of paragraph (a), in the case of an offering made at a fixed public offering price, no report need be filed for any day solely because of a retail sale of the offered security at such public offering price. In such cases, there shall be disclosed in column G of Schedule II of the next report required to be filed pursuant to paragraph (a), the total of all such retail sales by the reporting person which were not previously reported. (c) Promptly upon the termination of the stabilizing, written notice of such termination shall be given to the Commission. The reports required by clauses (1) and (2) of paragraph (a) shall be filed until the stabilizing is terminated and the Commission is so

similar person duly authorized by law to administer the estate or assets of another person.

(4) Securities reacquired by or for account of the issuer and held by it or for its account.

Rule X-16A-5. Exemption From Section 16 of Securities Purchased or Sold by Odd-Lot Dealers.

Securities purchased or sold by an odd-lot dealer (1) in odd-lots so far as reasonably necessary to carry on odd-lot transactions or (2) in round-lots to offset odd-lot transactions previously or simultaneously executed or reasonably anticipated in the usual course of business, shall be exempt from the provisions of section 16, with respect to participation by such odd-lot dealer in such transactions. Rule X-16A-6. Exemption From Section 16 (a) of Securities as to Which Reports Are Required Under Holding Company Act.

Securities issued by a company which is registered as a holding company under the Public Utility Holding Company Act of 1935, or by subsidiary companies thereof (as defined in section 2 (a) (8) of said Act), shall be exempt from the provisions of section 16 (a) of the Securities Exchange Act of 1934 as regards the duty of any officer or director of such holding company to file any reports with respect to ownership and changes in ownership of such securities with the Commission and with any national securities exchange, regardless of whether such officer or director is the beneficial owner of more than 10 percent of any class of such security.

Rule X-16A-7. Use of Investment Company Act Form.

Separate reports need not be filed to comply with section 30 (f) of the Investment Company Act of 1940 and section 16 (a) of the Securities Exchange Act of 1934. A single report containing the information required under section 30 (f) of the Investment Company Act of 1940 will be regarded as filed under both Acts. To comply with that part of section 16 (a) requiring reports to be filed with national securities exchanges, a duplicate original of the same report may be filed with such exchanges or with the exchange designated under rule X-16A-1 (ƒ).

EXEMPTION OF CERTAIN TRANSACTIONS FROM SECTION 16 (b) Rule X-16B-1. Exemption of Certain Transactions Originating Prior to October 1, 1934, From Section 16 (b).

A purchase which is effected before October 1, 1934, followed by a sale after October 1, 1934, within 6 months of such purchase, or a sale which is effected before October 1, 1934, followed by a purchase