61-1-14(1)(e) – Exchange Listed Securities Exemption


(1) The following securities are exempted from Sections 61-1-7 and 61-1-15:

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(e) (i) a federal covered security specified in the Securities Act of 1933, Section 18(b)(1), 15 U.S.C. Section 77r(b)(1), or by rule adopted under that provision;

(ii) a security listed or approved for listing on another securities market specified by rule under this chapter;

(iii) any of the following with respect to a security described in Subsection (1)(e)(i) or (ii):
(A) a put or a call option contract;
(B) a warrant; or
(C) a subscription right on or with respect to the security;

(iv) an option or similar derivative security on a security or an index of securities or foreign currencies issued by a clearing agency that is:
(A) registered under the Securities Exchange Act of 1934; and
(B) listed or designated for trading on a national securities exchange, or a facility of a national securities association registered under the Securities Exchange Act of 1934;

(v) an offer or sale, of the underlying security in connection with the offer, sale, or exercise of an option or other security that was exempt when the option or other security was written or issued; or

(vi) an option or a derivative security designated by the Securities and Exchange Commission under Securities Exchange Act of 1934, Section 9(b), 15 U.S.C. Section 78i(b);

Division Interpretive Commentary

Recognized Exchanges: Some exchanges are recognized by the Division for both issuer and non-issuer transactions while other exchanges are only recognized for non-issuer transactions. In the event of any conflict between the SEC classifications referenced in Section 61-1-14(1)(e)(i) and a Division rule under Section 61-1-14(1)(e)(ii) , the SEC classification will control pursuant to Section 18(b)(1) of the Securities Act of 1933 and the rules promulgated thereunder.

Issuer & Non-issuer Transactions:
New York Stock Exchange
American Stock Exchange
NASDAQ National Market System
Chicago Board Options Exchange
Pacific Stock Exchange (Tier I)
Philadelphia Stock Exchange (Tier I)

Non-issuer Transactions Only:
Boston Stock Exchange
Chicago Stock Exchange
NASDAQ Capital Market
Pacific Stock Exchange (Tier II)
Philadelphia Stock Exchange (Tier II)

Securities Approved for Listing: The rule expands the exemption to include securities that have been approved for listing upon notice of issuance on a recognized exchange.

Senior or Substantially Equal Rank: An unlisted security of the same issuer which is of senior or substantially equal rank to the security listed on a recognized exchange or medium qualifies for the exemption.

Delisted or Suspended Securities: If a listed security becomes delisted or suspended, the exemption is not available to the security or a senior or substantially equal rank security for the period during which the security is delisted or suspended.

Most of the securities which qualify under this exemption are also considered to be federal covered securities under section 18 of the Securities Act of 1933. See Federal Covered Securities.