0204008 Informal Interpretation

Advised the writer that since the burden to make any fair market valuation in connection with determining the size-of-transaction resides with the acquiring person, the PNO naturally extends this requirement to the acquiring person in determining the fair market value of assets of the issuer located in the U.S. for purposes of analyzing the availability of the 802.51 exemption. We would, however, allow the board of the acquiring person to designate the acquired person to do the valuation (like we have done for purposes of determining the size-of-transaction). Although 801.10 is titled "Value of voting securities and assets to be acquired", the section on fair market valuation does not specify that its instructions are limited only to determining the value of assets to be acquired. Any time a fair market valuation is required by the rules the instructions provided in 801.10(c) should be adhered to.