Question

The safe harbor provisions of SEC Rule 10b-18 apply to an issuer purchasing its own:

A) Debt securities.
B) Preferred stock.
C) Common stock.
D) Employee stock options.

Answer 1

The safe harbor provisions of SEC Rule 10b-18 apply to an issuer purchasing its own C) common stock. This rule provides a safe harbor from liability for issuers wishing to repurchase their own stock in the open market.

Step-by-step explanation:

The safe harbor provision of SEC Rule 10b-18 applies to an issuer purchasing its own common stock. This rule provides a safe harbor from liability under certain circumstances for issuers wishing to purchase their own stock in the open market, without this being considered manipulation or illegal insider information trading.

The purpose of the safe harbor provision is to allow issuers to repurchase their own stock for legitimate reasons such as capital management, reducing dilution, or supporting the stock price.