J. MILLARD TAWES, Governor                        671

of sub-section 3 of this section shall not apply to any sale of an
equity security of a domestic stock insurer by a dealer in the ordi-
nary course of his business and incident to the establishment or
maintenance by him of a primary or secondary market (otherwise
than on an exchange as defined in the Securities Exchange Act of
1934) for such security, except as to such equity securities then or
theretofore held by him in an investment account. The Commis-
sioner may, by such rules and regulations as he deems necessary or
appropriate in the public interest, define and prescribe terms and
conditions with respect to securities held in an investment account
and transactions made in the ordinary course of business and inci-
dent to the establishment or maintenance of a primary or secondary
market.

(5)  The provisions of sub-sections 1, 2, and 3 of this section shall
not apply to foreign or domestic arbitrage transactions unless made
in contravention of such rules and regulations as the Commissioner
may adopt in order to carry out the purposes of this section.

(6)  The term "Equity Security" when used in this section means
any stock or similar security; or any security convertible, with or
without consideration, into such a security, or carrying any warrant
or right to subscribe to or purchase such a security; or any such
warrant or right; or any other security which the Commissioner
shall deem to be of similar nature and consider necessary or appro-
priate, by such rules and regulations as he may prescribe in the
public interest or for the protection of investors, to treat as an
equity security.

(7)  The provisions of sub-sections 1, 2, and 3 of this section shall
not apply to equity securities of a domestic stock insurer if (a) such
securities shall be registered, or shall be required to be registered,
pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, or if (b) such domestic stock insurer shall not have any
class of its equity securities held of record by one hundred or more
persons on the last business day of the year next preceding the year
in which equity securities of the insurer would be subject to the
provisions of sub-sections 1, 2, and 3 of this section except for the
provisions of this sub-section 7 (b).

(8)  The Commissioner shall have the power to make such rules
and regulations as may be necessary for the execution of the func-
tions vested in him by sub-sections 1 through 7 of this section, and
may for such purpose classify domestic stock insurers, securities,
and other persons or matters within his jurisdiction. No provision
of sub-sections 1, 2, and 3 of this section imposing any liability shall
apply to any act done or omitted in good faith in conformity with
any rule or regulation of the Commissioner, notwithstanding that
such rule or regulation may, after such act or omission, be amended
or rescinded or determined by judicial or other authority to be
invalid for any reason.

Sec. 2. And be it further enacted, That this Act is hereby
declared to be an emergency measure and necessary for the imme-
diate preservation of the public health and safety, and having been
passed by a yea and nay vote supported by three-fifths of the mem-
bers elected to each of the two houses of the General Assembly, the
same shall take effect from the date of its passage.

Approved April 8, 1965.