Series 24: Regulation M, Rule 101 And Rule 102 – Purchasing During Restricted Periods

Regulation M, Rule 101 and Rule 102 – Purchasing During Restricted Periods

Rule 101 forbids underwriters and their affiliates from purchasing or inducing someone else to purchase a covered security during a restricted period in connection with a public offering. Rule 102 prohibits this activity by issuers and their affiliates.

A covered security is any security that is governed by federal regulations, which accounts for most securities. A restricted period is that period beginning up to five days prior to the pricing of a new issue and ending once the public offering is completed. Regulation M applies principally to new issues of securities that are already being traded in the