Section 21.53. Sales of securities to be acquired

(a) If any person is entitled, as an incident to his ownership of an issued security and without the payment of consideration, to receive another security ‘‘when issued’’ or ‘‘when distributed,’’ the security to be acquired shall be exempt from the operation of section 302.1(3) of the act (40 P. S. § 422.1(3)) if the following conditions are met:

(1) The sale shall be made subject to the same conditions as those attaching to the right of acquisition.

(2) The person shall exercise reasonable diligence to deliver the security to the purchaser promptly after his right of acquisition matures.

(3) The person shall report the sale on the appropriate form for reporting transactions by persons subject to section 302.1(1) of the act (40 P. S. § 422.1).

(b) Subsection (a) of this section shall not be construed as exempting transactions involving both a sale of a security ‘‘when issued’’ or ‘‘when distributed’’ and a sale of the security by virtue of which the seller expects to receive the ‘‘when issued’’ or ‘‘when distributed’’ security, if the two transactions combined result in a sale of more units than the aggregate of those owned by the seller, plus those to be received by him pursuant to his right of acquisition.