[Code of Federal Regulations]
[Title 16, Volume 1]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 16CFR801.21]

[Page 594-595]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 801_COVERAGE RULES--Table of Contents
 
Sec. 801.21  Securities and cash not considered assets when acquired.

    For purposes of determining the aggregate total amount of assets 
under Section 7A(a)(2) and Sec. 801.13(b):
    (a) Cash shall not be considered an asset of the person from which 
it is acquired; and
    (b) Neither voting or nonvoting securities nor obligations referred 
to in section 7A(c)(2) shall be considered assets of another person from 
which they are acquired.

    Examples: 1. Assume that acquiring person ``A'' acquires voting 
securities of issuer X from ``B,'' a person unrelated to X. Under this 
paragraph, the acquisition is treated only as one of voting securities, 
requiring ``A'' and ``X'' to comply with the requirements of the act, 
rather than one in which ``A'' acquires the assets of ``B,'' requiring 
``A'' and ``B'' to comply. See also example 2 to Sec. 801.30. Note that 
for purposes of section

[[Page 595]]

7A(a)(2)--that is, for the next regularly prepared balance sheet of 
``A'' referred to in Sec. 801.11--the voting securities of X must be 
reflected after their acquisition; see Sec. 801.11(c)(2).
    2. In the previous example, if ``A'' acquires nonvoting securities 
of X from ``B,'' then under this section the acquisition would be 
treated only as one of nonvoting securities of X (and would be exempt 
under section 7A(c)(2)), rather than one in which ``A'' acquires assets 
of ``B,'' requiring ``A'' and ``B'' to comply. Again, the nonvoting 
securities of X would have to be reflected in ``A's'' next regularly 
prepared balance sheet for purposes of section 7A(a)(2).
    3. In example 1, assume that ``B'' receives only cash from ``A'' in 
exchange for the voting securities of X. Under this section, ``B's'' 
acquisition of cash is not an acquisition of the ``assets'' of ``A,'' 
and ``B'' is not required to file notification as an acquiring person.

[43 FR 33537, July 31, 1978, as amended at 66 FR 8690, Feb. 1, 2001; 68 
FR 2430, Jan. 17, 2003]