Series 24: 4.2.6.4. Regulation M, Rule 105—Short Selling In Connection With A Public Offering

4.2.6.4. Regulation M, Rule 105—Short Selling in Connection with a Public Offering

Rule 105 also tries to curb market manipulation that may artificially lower the value of a public offering. It does so by prohibiting investors from purchasing a security from underwriters and other participants in an offering if they shorted the stock during a restricted period. The restricted period is the shorter of the following two periods:

• The period beginning five business days before the pricing of the security and ending with the pricing of the security

• The period