Mich. Admin. Code R. 500.528 - Exemption of long-term profits incident to sales within 6 months of the exercise of an option
Rule 528.
(1) To
the extent specified in subrule (2) of this rule, the commissioner exempts as
not comprehended within the purposes of section 5283 of the act any transaction
or transactions involving the purchase and sale, or sale and purchase, of any
equity security where such purchase is pursuant to the exercise of an option or
similar right either acquired more than 6 months before its exercise, or
acquired pursuant to the terms of an employment contract entered into more than
6 months before its exercise.
(2)
In respect of transactions specified in subrule (1) the profits inuring to the
insurer shall not exceed the difference between the proceeds of sale and the
lowest market price of any security of the same class within 6 months before or
after the date of sale. Nothing in this section shall be deemed to enlarge the
amount of profit which would inure to the insurer in the absence of this
rule.
(3) The commissioner also
exempts, as not comprehended within the purposes of section 5283 of the act,
the disposition of a security, purchased in a transaction specified in subrule
(1) of this rule, pursuant to a plan or agreement for merger or consolidation,
or reclassification of the insurer's securities, or for the exchange of it
securities for the securities of another person which has acquired its assets,
or which is in control, as defined in section 368(c) of the internal revenue
code of 1954, of a person which has acquired its assets, where the terms of the
plan or agreement are binding upon all stockholders of the insurer except to
the extent that dissenting stockholders may be entitled, under statutory
provisions or provisions contained in the certificate of incorporation, to
receive the appraised or fair value of their holdings.
(4) The exemptions provided by this rule
shall not apply to any transaction made unlawful by section 5284 of the act or
by any rules thereunder.
(5) The
burden of establishing market price of a security for the purpose of this rule
rests upon the person claiming the exemption.
Notes
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