U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

Securities Act of 1933
Section 5 and Rule 144

December 1, 2011

Response of the Office of Chief Counsel
Division of Corporation Finance


Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Inc.
Incoming letter dated November 30, 2011

Based on the facts and representations in your letter, the Division’s views are as follows. Capitalized terms have the same meanings as defined in your letter.

You have requested the Division’s views concerning hedging transactions by Bank of America Merrill Lynch in connection with forward or option-based derivative contracts entered into between Bank of America Merrill Lynch and a Rule 144 Shareholder. It is the Division’s view that its position in the 1999 Rule 144 Variable Forward Letter may be applied to transactions involving all of the forward and option-based derivative contracts covered by the 2003 Registered Hedging Letter. In addition, it is the Division’s view that its position in the 2003 Registered Hedging Letter regarding dynamic hedging activities may be applied to dynamic hedging activities when the initial hedging activities are undertaken in accordance with the Division’s position in the 1999 Rule 144 Variable Forward Letter, provided that such dynamic hedging activities are conducted in the same manner and are subject to the same conditions as in the 2003 Registered Hedging Letter and as described in your letter.

In expressing these views, we note your representation that this guidance will help to harmonize market practice as well as your belief that this guidance will result in more transparency and better disclosure to investors through the filing of a Form 144 when the Rule 144 Shareholder is an affiliate of the issuer.

Because this position is based upon the representations made in your letter, any different facts or conditions might require the Division to reach a different conclusion.


Thomas J. Kim
Chief Counsel and Associate Director

Incoming Letter:

The Incoming Letter is in Acrobat format.


Modified: 12/02/2011