The issuer must disclose to the seller or his broker the approximate asset coverage of the subject securities. The purchase must be made without undue preference. If the security is a stock, notice of intention to buy must have been given to the stockholders at large. The purpose of these rules is to eliminate unfair discrimination and to prevent overreaching conduct. Before the stock market's collapse in 1929, repurchases were generally effected to "support, peg, fix, or stabilize" prices. After 1929, repurchases of bond issues were often made to prevent defaults arising out of so-called touch-off provisions contained in many bond indentures.


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