Current through P.L. 106-274, approved 9-22-2000 [HSB 5/15/2001 -- includes amendments made by Commodity Futures Modernization Act of 2000]

This subchapter may be cited as the "Securities Act of 1933."

CREDIT(S)

1997 Main Volume

(May 27, 1933, c. 38, Title I, § 1, 48 Stat. 74.)

HISTORICAL AND STATUTORY NOTES 

Short Title

1980 Acts. Pub.L. 96-477, Title VI, § 601, Oct. 21, 1980, 94 Stat. 2294, provided:  "This title [amending sections 77b and 77d of this title] may be cited as the 'Small Business Issuers' Simplification Act of 1980'."

Current through P.L. 106-274, approved 9-22-2000

(a) Definitions

When used in this subchapter, unless the context otherwise requires--

(1) The term "security" means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

(2) The term "person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, any unincorporated organization, or a government or political subdivision thereof.  As used in this paragraph the term "trust" shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security.

(3) The term "sale" or "sell" shall include every contract of sale or disposition of a security or interest in a security, for value.  The term "offer to sell", "offer for sale", or "offer" shall include every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security, for value.  The terms defined in this paragraph and the term "offer to buy" as used in subsection (c) of section 77e of this title shall not include preliminary negotiations or agreements between an issuer (or any person directly or indirectly controlling or controlled by an issuer, or under direct or indirect common control with an issuer) and any underwriter or among underwriters who are or are to be in privity of contract with an issuer (or any person directly or indirectly controlling or controlled by an issuer, or under direct or indirect common control with an issuer).  Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing, shall be conclusively presumed to constitute a part of the subject of such purchase and to have been offered and sold for value.  The issue or transfer of a right or privilege, when originally issued or transferred with a security, giving the holder of such security the right to convert such security into another security of the same issuer or of another person, or giving a right to subscribe to another security of the same issuer or of another person, which right cannot be exercised until some future date, shall not be deemed to be an offer or sale of such other security;  but the issue or transfer of such other security upon the exercise of such right of conversion or subscription shall be deemed a sale of such other security. Any offer or sale of a security futures product by or on behalf of the issuer of the securities underlying the security futures product, an affiliate of the issuer, or an underwriter, shall constitute a contract for sale of, sale of, offer for sale, or offer to sell the underlying securities.

(4) The term "issuer" means every person who issues or proposes to issue any security;  except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates, or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functions) or of the fixed, restricted management, or unit type, the term "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which such securities are issued;  except that in the case of an unincorporated association which provides by its articles for limited liability of any or all of its members, or in the case of a trust, committee, or other legal entity, the trustees or members thereof shall not be individually liable as issuers of any security issued by the association, trust, committee, or other legal entity;  except that with respect to equipment-trust certificates or like securities, the term "issuer" means the person by whom the equipment or property is or is to be used;  and except that with respect to fractional undivided interests in oil, gas, or other mineral rights, the term "issuer" means the owner of any such right or of any interest in such right (whether whole or fractional) who creates fractional interests therein for the purpose of public offering.

(5) The term "Commission" means the Securities and Exchange Commission.

(6) The term "Territory" means Puerto Rico, the Virgin Islands, and the insular possessions of the United States.

(7) The term "interstate commerce" means trade or commerce in securities or any transportation or communication relating thereto among the several States or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia.

(8) The term "registration statement" means the statement provided for in section 77f of this title, and includes any amendment thereto and any report, document, or memorandum filed as part of such statement or incorporated therein by reference.

(9) The term "write" or "written" shall include printed, lithographed, or any means of graphic communication.

(10) The term "prospectus" means any prospectus, notice, circular, advertisement, letter, or communication, written or by radio or television, which offers any security for sale or confirms the sale of any security;  except that (a) a communication sent or given after the effective date of the registration statement (other than a prospectus permitted under subsection (b) of section 77j of this title) shall not be deemed a prospectus if it is proved that prior to or at the same time with such communication a written prospectus meeting the requirements of subsection (a) of section 77j of this title at the time of  [FN1] such communication was sent or given to the person to whom the communication was made, and (b) a notice, circular, advertisement, letter, or communication in respect of a security shall not be deemed to be a prospectus if it states from whom a written prospectus meeting the requirements of section 77j of this title may be obtained and, in addition, does no more than identify the security, state the price thereof, state by whom orders will be executed, and contain such other information as the Commission, by rules or regulations deemed necessary or appropriate in the public interest and for the protection of investors, and subject to such terms and conditions as may be prescribed therein, may permit.

(11) The term "underwriter" means any person who has purchased from an issuer with a view to, or offers or sells for an issuer in connection with, the distribution of any security, or participates or has a direct or indirect participation in any such undertaking, or participates or has a participation in the direct or indirect underwriting of any such undertaking;  but such term shall not include a person whose interest is limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission.  As used in this paragraph the term "issuer" shall include, in addition to an issuer, any person directly or indirectly controlling or controlled by the issuer, or any person under direct or indirect common control with the issuer.

(12) The term "dealer" means any person who engages either for all or part of his time, directly or indirectly, as agent, broker, or principal, in the business of offering, buying, selling, or otherwise dealing or trading in securities issued by another person.

(13) The term "insurance company" means a company which is organized as an insurance company, whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies, and which is subject to supervision by the insurance commissioner, or a similar official or agency, of a State or territory or the District of Columbia;  or any receiver or similar official or any liquidating agent for such company, in his capacity as such.

(14) The term "separate account" means an account established and maintained by an insurance company pursuant to the laws of any State or territory of the United States, the District of Columbia, or of Canada or any province thereof, under which income, gains and losses, whether or not realized, from assets allocated to such account, are, in accordance with the applicable contract, credited to or charged against such account without regard to other income, gains, or losses of the insurance company.

(15) The term "accredited investor" shall mean--

(i) a bank as defined in section 77c(a)(2) of this title whether acting in its individual or fiduciary capacity;  an insurance company as defined in paragraph (13) of this subsection;  an investment company registered under the Investment Company Act of 1940 [15 U.S.C.A. § 80a-1 et seq.] or a business development company as defined in section 2(a)(48) of that Act [15 U.S.C.A.  380a-2(a)(48)];  a Small Business Investment Company licensed by the Small Business Administration;  or an employee benefit plan, including an individual retirement account, which is subject to the provisions of the Employee Retirement Income Security Act of 1974 [29 U.S.C.A. § 1001 et seq.], if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act [29 U.S.C.A. § 1002(21)], which is either a bank, insurance company, or registered investment adviser;  or

(ii) any person who, on the basis of such factors as financial sophistication, net worth, knowledge, and experience in financial matters, or amount of assets under management qualifies as an accredited investor under rules and regulations which the Commission shall prescribe.

(16) The terms "security future", "narrow-based security index", and  "security futures product" have the same meanings as provided in section  3(a)(55) of the Securities Exchange Act of 1934.

(b) Consideration of promotion of efficiency, competition, and capital formation

Whenever pursuant to this subchapter the Commission is engaged in rulemaking and is required to consider or determine whether an action is necessary or appropriate in the public interest, the Commission shall also consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and capital formation.

CREDIT(S)

1997 Main Volume

(May 27, 1933, c. 38, Title I, § 2, 48 Stat. 74;  June 6, 1934, c. 404, §§ 201, 210, 48 Stat. 905, 908;  Aug. 10, 1954, c. 667, Title I, §§ 1 to 4, 68 Stat. 683;  June 25, 1959, Pub.L. 86-70, § 12(a), 73 Stat. 143;  July 12, 1960, Pub.L. 86-624, § 7(a), 74 Stat. 412;  Dec. 14, 1970, Pub.L. 91-547, § 27(a), 84 Stat. 1433;  Oct. 21, 1980, Pub.L. 96-477, Title VI, § 603, 94 Stat. 2294;  Oct. 13, 1982, Pub.L. 97-303, § 1, 96 Stat. 1409;  Dec. 4, 1987, Pub.L. 100-181, Title II, §§ 201, 202, 101 Stat. 1252;  Oct. 11, 1996, Pub.L. 104-290, Title I, § 106(a), 110 Stat. 3424.)

2000 Electronic Update

(As amended Nov. 3, 1998, Pub.L. 105-353, Title III, § 301(a)(1), 112 Stat. 3235.)

[FN1]  So in original.

HISTORICAL AND STATUTORY NOTES 

Revision Notes and Legislative Reports

1954 Acts. House Report No. 1542 and Conference Report No. 2433, see 1954 U.S. Code Cong. and Adm. News, p. 2973.

1959 Acts. Senate Report No. 331, see 1959 U.S. Code Cong. and Adm. News, p. 1675.

1960 Acts. Senate Report No. 1681, see 1960 U.S. Code Cong. and Adm. News, p. 2963.

1970 Acts. Senate Report No. 91-184 and Conference Report No. 91-1631, see 1970 U.S. Code Cong. and Adm. News, p. 4897.

1980 Acts. House Report No. 96-1341, see 1980 U.S. Code Cong. and Adm. News, p. 4800.

1982 Acts. House Report No. 97-626, see 1982 U.S. Code Cong. and Adm. News, p. 2780.

1987 Acts. Senate Report No. 100-105, see 1987 U.S. Code Cong. and Adm. News, p. 2089.

1996 Acts. House Report No. 104-622 and House Conference Report No. 104-864, see 1996 U.S. Code Cong. and Adm. News, p. 3877.

References in Text

The Investment Company Act of 1940, referred to in subsec. (a)(15)(i), is Title I of Act Aug. 22, 1940, c. 686, 54 Stat. 789, which is classified generally to subchapter I (section 80a-1 et seq.) of chapter 2D of this title.  Section 2(a)(48) of such Act is classified to section 80a-2(a)(48) of this title.  For complete classification of this Act to the Code, see section 80a-51 of this title and Tables.

The Employee Retirement Income Security Act of 1974, referred to in subsec. (a)(15)(i), is Pub.L. 93-406, Sept. 2, 1974, 88 Stat. 832, as amended, which is classified principally to chapter 18 (section 1001 et seq.) of Title 29, Labor.  Section 3(21) of such Act is classified to section 1002(21) of Title 29.  For complete classification of this Act to the Code, see Short Title note set out under section 1001 Title 29 and Tables.

Codifications

Words "Philippine Islands" were deleted from the definition of term "Territory" under authority of Proc.No.2695, eff. July 4, 1946, 11 F.R. 7517, 60 Stat. 1352, which granted independence to the Philippine Islands. Proc.No.2695 was issued pursuant to section 1394 of Title 22, Foreign Relations and Intercourse, and is set out as a note under that section.

Amendments

1998 Amendments. Subsec. (a)(15)(i).  Pub.L. 105-353, § 301(a)(1), added "of this subsection" after "paragraph 13" and made technical corrections which did not affect the text.

1996 Amendments. Subsec. (a).  Pub.L. 104-290, § 106(a)(1), designated existing provisions as subsec. (a) "Definitions".

Subsec. (b).  Pub.L. 104-290, § 106(a)(2), added subsec. (b).

1987 Amendments. Par. (5). Pub.L. 100-181, § 201, substituted "Securities and Exchange Commission" for "Federal Trade Commission".

Par. (6). Pub.L. 100-181, § 202, deleted from definition of term "Territory" reference to "Canal Zone," following "Puerto Rico,".

1982 Amendments. Par. (1). Pub.L. 97-303 inserted "any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency," following "mineral rights,".

1980 Amendments. Par. (15).  Pub.L. 96-477 added par. (15).

1970 Amendments. Pars. (13), (14).  Pub.L. 91-547 added pars. (13) and (14).

1960 Amendments. Par. (6).  Pub.L. 86-624 eliminated reference to Hawaii from par. (6).

1959 Amendments. Par. (6).  Pub.L. 86-70 eliminated reference to Alaska from par. (6).

1954 Amendments. Act Aug. 10, 1954, in pars. (3), (8), (10), and (11), redefined the term "sale" so as to distinguish between "offers" and "sales", clarified the definition of "registration statement", and conformed the definition of "prospectus" to changes made by Act Aug. 10, 1954, to sections 77e and 77j of this title.

1934 Amendments. Act June 6, 1934, § 201, amended pars. (1), (4), and (10).

Effective and Applicability Provisions

1970 Acts. Amendment by Pub.L. 91-547 effective Dec. 14, 1970, see section 30 of Pub.L. 91-547, set out as a note under section 80a-52 of this title.

1954 Acts. Section 501 of Act Aug. 10, 1954, provided that:  "This Act [amending this section, sections 77c to 77e, 77j, 77l, 77q, 77v, 77ccc to 77fff, 77xxx, 78k, 79l, 80a-2 and 80a-24 of this title] shall take effect sixty days after the date of its enactment [Aug. 10, 1954]."

Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to chairman of such commission, see Reorg. Plan No. 10 of 1950,§§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.

Act June 6, 1934, § 210, transferred to Securities and Exchange Commission the powers, duties, and functions of the Federal Trade Commission under this subchapter by substituting the Securities and Exchange Commission for the Federal Trade Commission in the definition of "Commission" in par. (5).

 (a) NON-SECURITY-BASED SWAP AGREEMENTS.--The definition of 'security' in section 2(a)(1) of this title does not include any non-security-based swapagreement (as defined in section 206C of the Gramm-Leach-Bliley Act).
 (b) SECURITY-BASED SWAP AGREEMENTS.--
  (1) The definition of "security" in section 2(a)(1) of this title does not include any security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act).
  (2) The Commission is prohibited from registering, or requiring, recommending, or suggesting, the registration under this title of any security-based swap agreement (as defined in section 206B of the Gramm-Leach- Bliley Act).  If the Commission becomes aware that a registrant has filed a registration statement with respect to such a swap agreement, the Commission shall promptly so notify the registrant.  Any such registration  statement with respect to such a swap agreement shall be void and of no force or effect.
  "(3) The Commission is prohibited from--
   "(A) promulgating, interpreting, or enforcing rules;  or
   "(B) issuing orders of general applicability;
  under this title in a manner that imposes or specifies reporting or recordkeeping requirements, procedures, or standards as prophylactic measures against fraud, manipulation, or insider trading with respect to any security- based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act).
  (4) References in this title to the 'purchase' or 'sale' of a security-based swap agreement shall be deemed to mean the execution, termination (prior to its scheduled maturity date), assignment, exchange, or similar transfer or conveyance of, or extinguishing of rights or obligations under, a security- based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act), as the context may require..
[(a) AMENDMENT.--Title II of the Gramm-Leach-Bliley Act (Public Law 106-102) is amended by inserting after section 206 the following new sections:
"SEC. 206A. SWAP AGREEMENT.
 "(a) IN GENERAL.--Except as provided in subsection (b), as used in this section, the term 'swap agreement' means any agreement, contract, or transaction between eligible contract participants (as defined in section 1a(12) of the Commodity Exchange Act as in effect on the date of the enactment of this section), other than a person that is an eligible contract participant under section 1a(12)(C) of the Commodity Exchange Act, the material terms of which (other than price and quantity) are subject to individual negotiation, and that--
  "(1) is a put, call, cap, floor, collar, or similar option of any kind for the purchase or sale of, or based on the value of, one or more interest or other rates, currencies, commodities, indices, quantitative measures, or other financial or economic interests or property of any kind;
  "(2) provides for any purchase, sale, payment or delivery (other than a dividend on an equity security) that is dependent on the occurrence, non- occurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence;
  "(3) provides on an executory basis for the exchange, on a fixed or contingent basis, of one or more payments based on the value or level of one or more interest or other rates, currencies, commodities, securities, instruments of indebtedness, indices, quantitative measures, or other financial or economic interests or property of any kind, or any interest therein or based on the value thereof, and that transfers, as between the parties to the transaction, in whole or in part, the financial risk associated with a future change in any such value or level without also conveying a current or future direct or indirect ownership interest in an asset (including any enterprise or investment pool) or liability that incorporates the financial risk so transferred, including any such agreement, contract, or transaction commonly known as an interest rate swap, including a rate floor,  rate cap, rate collar, cross-currency rate swap, basis swap, currency swap, equity index swap, equity swap, debt index swap, debt swap, credit spread, credit default swap, credit swap, weather swap, or commodity swap;
  "(4) provides for the purchase or sale, on a fixed or contingent basis, of any commodity, currency, instrument, interest, right, service, good, article, or property of any kind;  or
  "(5) is any combination or permutation of, or option on, any agreement, contract, or transaction described in any of paragraphs (1) through (4).
 "(b) EXCLUSIONS.--The term 'swap agreement' does not include--
  "(1) any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities, including any interest therein or based on the value thereof;
  "(2) any put, call, straddle, option, or privilege entered into on a national securities exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934 relating to foreign currency;
  "(3) any agreement, contract, or transaction providing for the purchase or sale of one or more securities on a fixed basis;
  "(4) any agreement, contract, or transaction providing for the purchase or sale of one or more securities on a contingent basis, unless such agreement, contract, or transaction predicates such purchase or sale on the occurrence of  a bona fide contingency that might reasonably be expected to affect or be affected by the creditworthiness of a party other than a party to the agreement, contract, or transaction;
  "(5) any note, bond, or evidence of indebtedness that is a security as defined in section 2(a)(1) of the Securities Act of 1933 or section 3(a)(10) of the Securities Exchange Act of 1934;  or
  "(6) any agreement, contract, or transaction that is--
   "(A) based on a security;  and
    "(B) entered into directly or through an underwriter (as defined in section 2(a) of the Securities Act of 1933) by the issuer of such security for the purposes of raising capital, unless such agreement, contract, or transaction is entered into to manage a risk associated with capital raising.
 "(c) RULE OF CONSTRUCTION REGARDING MASTER AGREEMENTS.--As used in this section, the term 'swap agreement' shall be construed to include a master agreement that provides for an agreement, contract, or transaction that is a swap agreement pursuant to subsections (a) and (b), together with all supplements to any such master agreement, without regard to whether the master agreement contains an agreement, contract, or transaction that is not a swap agreement pursuant to subsections (a) and (b), except that the master agreement shall be considered to be a swap agreement only with respect to each agreement, contract, or transaction under the master agreement that is a swap agreement pursuant to subsections (a) and (b).
"SEC. 206B. SECURITY-BASED SWAP AGREEMENT.
 "As used in this section, the term 'security-based swap agreement' means a swap agreement (as defined in section 206A) of which a material term is based on the price, yield, value, or volatility of any security or any group or index of securities, or any interest therein.
"SEC. 206C. NON-SECURITY-BASED SWAP AGREEMENT.
 "As used in this section, the term 'non-security-based swap agreement' means any swap agreement (as defined in section 206A) that is not a security-based swap agreement (as defined in section 206B).".
 (b) SECURITY DEFINITION.--As used in the amendment made by subsection (a), the term "security" has the same meaning as in section 2(a)(1) of the Securities Act of 1933 or section 3(a)(10) of the Securities Exchange Act of 1934.]

Current through P.L. 106-274, approved 9-22-2000

(a) Exempted securities

Except as hereinafter expressly provided, the provisions of this subchapter shall not apply to any of the following classes of securities:

(1) Reserved.

(2) Any security issued or guaranteed by the United States or any territory thereof, or by the District of Columbia, or by any State of the United States, or by any political subdivision of a State or territory, or by any public instrumentality of one or more States or territories, or by any person controlled or supervised by and acting as an instrumentality of the Government of the United States pursuant to authority granted by the Congress of the United States;  or any certificate of deposit for any of the foregoing;  or any security issued or guaranteed by any bank;  or any security issued by or representing an interest in or a direct obligation of a Federal Reserve bank;  or any interest or participation in any common trust fund or similar fund maintained by a bank exclusively for the collective investment and reinvestment of assets contributed thereto by such bank in its capacity as trustee, executor, administrator, or guardian;  or any security which is an industrial development bond (as defined in section 103(c)(2) of Title 26) the interest on which is excludable from gross income under section 103(a)(1) of Title 26 if, by reason of the application of paragraph (4) or (6) of section 103(c) of Title 26 (determined as if paragraphs (4)(A), (5), and (7) were not included in such section 103(c) ), paragraph (1) of such section 103(c) does not apply to such security;  or any interest or participation in a single trust fund, or in a collective trust fund maintained by a bank, or any security arising out of a contract issued by an insurance company, which interest, participation, or security is issued in connection with (A) a stock bonus, pension, or profit-sharing plan which meets the requirements for qualification under section 401 of Title 26, (B) an annuity plan which meets the requirements for the deduction of the employer's contributions under section 404(a)(2) of Title 26, or (C) a governmental plan as defined in section 414(d) of Title 26 which has been established by an employer for the exclusive benefit of its employees or their beneficiaries for the purpose of distributing to such employees or their beneficiaries the corpus and income of the funds accumulated under such plan, if under such plan it is impossible, prior to the satisfaction of all liabilities with respect to such employees and their beneficiaries, for any part of the corpus or income to be used for, or diverted to, purposes other than the exclusive benefit of such employees or their beneficiaries, other than any plan described in clause (A), (B), or (C) of this paragraph (i) the contributions under which are held in a single trust fund or in a separate account maintained by an insurance company for a single employer and under which an amount in excess of the employer's contribution is allocated to the purchase of securities (other than interests or participations in the trust or separate account itself) issued by the employer or any company directly or indirectly controlling, controlled by, or under common control with the employer, (ii) which covers employees some or all of whom are employees within the meaning of section 401(c)(1) of Title 26, or (iii) which is a plan funded by an annuity contract described in section 403(b) of Title 26.  The Commission, by rules and regulations or order, shall exempt from the provisions of section 77e of this title any interest or participation issued in connection with a stock bonus, pension, profit-sharing, or annuity plan which covers employees some or all of whom are employees within the meaning of section 401(c)(1) of Title 26, if and to the extent that the Commission determines this to be necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of this subchapter.  For purposes of this paragraph, a security issued or guaranteed by a bank shall not include any interest or participation in any collective trust fund maintained by a bank;  and the term "bank" means any national bank, or any banking institution organized under the laws of any State, territory, or the District of Columbia, the business of which is substantially confined to banking and is supervised by the State or territorial banking commission or similar official;  except that in the case of a common trust fund or similar fund, or a collective trust fund, the term "bank" has the same meaning as in the Investment Company Act of 1940 [15 U.S.C.A. § 80a-1 et seq.];

(3) Any note, draft, bill of exchange, or banker's acceptance which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited;

(4) Any security issued by a person organized and operated exclusively for religious, educational, benevolent, fraternal, charitable, or reformatory purposes and not for pecuniary profit, and no part of the net earnings of which inures to the benefit of any person, private stockholder, or individual;  or any security of a fund that is excluded from the definition of an investment company under section 80a-3(c)(10)(B) of this title;

(5) Any security issued (A) by a savings and loan association, building and loan association, cooperative bank, homestead association, or similar institution, which is supervised and examined by State or Federal authority having supervision over any such institution;  or (B) by (i) a farmer's cooperative organization exempt from tax under section 521 of Title 26, (ii) a corporation described in section 501(c)(16) of Title 26 and exempt from tax under section 501(a) of Title 26, or (iii) a corporation described in section 501(c)(2) of Title 26 which is exempt from tax under section 501(a) of Title 26 and is organized for the exclusive purpose of holding title to property, collecting income therefrom, and turning over the entire amount thereof, less expenses, to an organization or corporation described in clause (i) or (ii);

(6) Any interest in a railroad equipment trust.  For purposes of this paragraph "interest in a railroad equipment trust" means any interest in an equipment trust, lease, conditional sales contract, or other similar arrangement entered into, issued, assumed, guaranteed by, or for the benefit of, a common carrier to finance the acquisition of rolling stock, including motive power;

(7) Certificates issued by a receiver or by a trustee or debtor in possession in a case under Title 11, with the approval of the court;

(8) Any insurance or endowment policy or annuity contract or optional annuity contract, issued by a corporation subject to the supervision of the insurance commissioner, bank commissioner, or any agency or officer performing like functions, of any State or Territory of the United States or the District of Columbia;

(9) Except with respect to a security exchanged in a case under Title 11, any security exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange;

(10) Except with respect to a security exchanged in a case under Title 11, any security which is issued in exchange for one or more bona fide outstanding securities, claims or property interests, or partly in such exchange and partly for cash, where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear, by any court, or by any official or agency of the United States, or by any State or Territorial banking or insurance commission or other governmental authority expressly authorized by law to grant such approval;

(11) Any security which is a part of an issue offered and sold only to persons resident within a single State or Territory, where the issuer of such security is a person resident and doing business within or, if a corporation, incorporated by and doing business within, such State or Territory.

(12) Any equity security issued in connection with the acquisition by a holding company of a bank under section 1842(a) of Title 12 or a savings association under section 1467a(e) of Title 12, if--

(A) the acquisition occurs solely as part of a reorganization in which security holders exchange their shares of a bank or savings association for shares of a newly formed holding company with no significant assets other than securities of the bank or savings association and the existing subsidiaries of the bank or savings association;

(B) the security holders receive, after that reorganization, substantially the same proportional share interests in the holding company as they held in the bank or savings association, except for nominal changes in shareholders' interests resulting from lawful elimination of fractional interests and the exercise of dissenting shareholders' rights under State or Federal law;

(C) the rights and interests of security holders in the holding company are substantially the same as those in the bank or savings association prior to the transaction, other than as may be required by law;  and

(D) the holding company has substantially the same assets and liabilities, on a consolidated basis, as the bank or savings association had prior to the transaction.

For purposes of this paragraph, the term "savings association" means a savings association (as defined in section 1813(b) of Title 12) the deposits of which are insured by the Federal Deposit Insurance Corporation.

(13) Any security issued by or any interest or participation in any church plan, company or account that is excluded from the definition of an investment company under section 80a-3(c)(14) of this title.

(14) Any security futures product that is--
   (A) cleared by a clearing agency registered under section 17A of the Securities Exchange Act of 1934 or exempt from registration under subsection (b)(7) of such section 17A;  and
   (B) traded on a national securities exchange or a national securities association registered pursuant to section 15A(a) of the Securities Exchange Act of 1934.

(b) Additional exemptions

The Commission may from time to time by its rules and regulations, and subject to such terms and conditions as may be prescribed therein, add any class of securities to the securities exempted as provided in this section, if it finds that the enforcement of this subchapter with respect to such securities is not necessary in the public interest and for the protection of investors by reason of the small amount involved or the limited character of the public offering;  but no issue of securities shall be exempted under this subsection where the aggregate amount at which such issue is offered to the public exceeds $5,000,000.

(c) Securities issued by small investment company

The Commission may from time to time by its rules and regulations and subject to such terms and conditions as may be prescribed therein, add to the securities exempted as provided in this section any class of securities issued by a small business investment company under the Small Business Investment Act of 1958 [15 U.S.C.A. § 661 et seq.] if it finds, having regard to the purposes of that Act, that the enforcement of this subchapter with respect to such securities is not necessary in the public interest and for the protection of investors.

CREDIT(S)

1997 Main Volume

(May 27, 1933, c. 38, Title I, § 3, 48 Stat. 75;  June 6, 1934, c. 404, Title II, § 202, 48 Stat. 906;  Feb. 4, 1887, c. 104, Title II, § 214, as added Aug. 9, 1935, c. 498, 49 Stat. 557, and amended June 29, 1938, c. 811, § 15, 52 Stat. 1240;  May 15, 1945, c. 122, 59 Stat. 167;  Aug. 10, 1954, c. 667, Title I, § 5, 68 Stat. 684;  Aug. 21, 1958, Pub.L. 85-699, Title III, § 307(a), 72 Stat. 694;  Aug. 10, 1970, Pub.L. 91-373, Title IV, § 401(a), 84 Stat. 718;  Dec. 14, 1970, Pub.L. 91-547, § 27(b), (c), 84 Stat. 1434;  Dec. 19, 1970, Pub.L. 91-565, 84 Stat. 1480;  Dec. 22, 1970, Pub.L. 91-567, § 6(a), 84 Stat. 1498;  Feb. 5, 1976, Pub.L. 94-210, Title III, § 308(a)(1), (3), 90 Stat. 56, 57;  May 21, 1978, Pub.L. 95-283, § 18, 92 Stat. 275;  Oct. 6, 1978, Pub.L. 95-425, § 2, 92 Stat. 962;  Nov. 6, 1978, Pub.L. 95-598, Title III, § 306, 92 Stat. 2674;  Oct. 21, 1980, Pub.L. 96-477, Title III, § 301, Title VII, § 701, 94 Stat. 2291, 2294;  Sept. 20, 1982, Pub.L. 97-261, § 19(d), 96 Stat. 1121;  Dec. 4, 1987, Pub.L. 100-181, Title II, §§ 203, 204, 101 Stat. 1252;  Sept. 23, 1994, Pub.L. 103-325, Title III, § 320, 108 Stat. 2225;  Dec. 8, 1995, Pub.L. 104-62, § 3, 109 Stat. 684;  Oct. 11, 1996, Pub.L. 104-290, Title V, § 508(b), 110 Stat. 3447.)

TEXT

AMENDMENT OF SUBSECTION (A)(2)

< Pub.L. 106-102, Title II, §§ 221(a), 225, Nov. 12, 1999, 113 Stat. 1401, 1402, provided that, effective 18 months after November 12, 1999, subsec. (a)(2) of this section is amended by striking ";  or any interest or participation in any common trust fund or similar fund maintained by a bank exclusively for the collective investment and reinvestment of assets contributed thereto by such bank in its capacity as trustee, executor, administrator, or guardian;" and inserting ";  or any interest or participation in any common trust fund or similar fund that is excluded from the definition of the term 'investment company' under section 80a-3(c)(3) of this title;". >

HISTORICAL AND STATUTORY NOTES 

Revision Notes and Legislative Reports

1954 Acts. House Report No. 1542 and Conference Report No. 2433, see 1954 U.S. Code Cong. and Adm. News, p. 2973.

1958 Acts. House Report No. 2060 and Conference Report No. 2492, see 1958 U.S. Code Cong. and Adm. News, p. 3678.

1970 Acts. Senate Report No. 91-184 and Conference Report No. 91-1631, see 1970 U.S. Code Cong. and Adm. News, p. 4897.

House Report No. 91-1654, see 1970 U.S. Code Cong. and Adm. News, p. 5023.

House Report No. 91-1655, see 1970 U.S. Code Cong. and Adm. News, p. 5025.

1976 Acts. Senate Report No. 94-499 and Senate Conference Report No. 94-595, see 1976 U.S. Code Cong. and Adm. News, p. 14.

1978 Acts. Senate Report No. 95-763, see 1978 U.S. Code Cong. and Adm. News, p. 764.

Senate Report No. 95-1057, see 1978 U.S. Code Cong. and Adm. News, p. 2421.

Senate Report No. 95-989 and House Report No. 95-595, see 1978 U.S. Code Cong. and Adm. News, p. 5787.

1980 Acts. House Report No. 96-1341, see 1980 U.S. Code Cong. and Adm. News, p. 4800.

1982 Acts. Senate Report No. 97-411 and House Conference Report No. 97-780, see 1982 U.S. Code Cong. and Adm. News, p. 2308.

1987 Acts. Senate Report No. 100-105, see 1987 U.S. Code Cong. and Adm. News, p. 2089.

1994 Acts. Senate Report No. 103-169 and House Conference Report No. 103-652, see 1994 U.S. Code Cong. and Adm. News, p. 1881.

1995 Acts. House Report No. 104-333, see 1995 U.S. Code Cong. and Adm. News, p. 619.

1996 Acts. House Report No. 104-622 and House Conference Report No. 104-864, see 1996 U.S. Code Cong. and Adm. News, p. 3877.

1999 Acts. House Conference Report No. 106-434, see 1999 U.S. Code Cong. and Adm. News, p. 245.

References in Text

Section 103 of Title 26, referred to in subsec. (a)(2), which related to interest on certain governmental obligations was amended generally by Pub.L. 99-514, Title XIII, § 1301(a), Oct. 22, 1986, 100 Stat. 2602, and as so amended relates to interest on State and local bonds.  Section 103(b)(2) (formerly section 103(c)(2)), which prior to the general amendment defined industrial development bond, relates to the applicability of the interest exclusion to arbitrage bonds.

The Investment Company Act of 1940, referred to in subsec. (a)(2), (4), is Title I of Act Aug. 22, 1940, c. 686, 54 Stat. 789, as amended, which is classified generally to subchapter I (section 80a-1 et seq.) of chapter 2D of this title.  Section 3(c)(10)(B) of such Act is classified to section 80a-3(c)(10)(B) of this title.  For complete classification of this Act to the Code, see section 80a-51 of this title and Tables.

The Small Business Investment Act of 1958, referred to in subsec. (c), is Pub.L. 85-699, Aug. 21, 1958, 72 Stat. 689, which is classified generally to chapter 14B (section 661 et seq.) of this title.  For complete classification of this Act to the Code, see Short Title note set out under section 661 of this title and Tables.

Amendments

1999 Amendments. Subsec. (a)(2). Pub.L. 106-102, § 221(a), substituted ";  or any interest or participation in any common trust fund or similar fund that is excluded from the definition of the term 'investment company' under section 80a-3(c)(3) of this title;" for ";  or any interest or participation in any common trust fund or similar fund maintained by a bank exclusively for the collective investment and reinvestment of assets contributed thereto by such bank in its capacity as trustee, executor, administrator, or guardian;".

1996 Amendments. Subsec. (a)(13).  Pub.L. 104-290, § 508(b), added par. (13).

1995 Amendments. Subsec. (a)(4).  Pub.L. 104-62, § 3, inserted "or any security of a fund that is excluded from the definition of an investment company under section 3(c)(10)(B) of the Investment Company Act of 1940".

1994 Amendments. Subsec. (a)(12).  Pub.L. 103-325, § 320, added par. (12).

1987 Amendments. Subsec. (a)(1).  Pub.L. 100-181, § 203, substituted "Reserved." for "Any security which, prior to or within sixty days after May 27, 1933, has been sold or disposed of by the issuer or bona fide offered to the public, but this exemption shall not apply to any new offering of any such security by an issuer or underwriter subsequent to such sixty days.".

Subsec. (a)(5)(A).  Pub.L. 100-181, § 204, struck out exception provision following "any such institution" reading ", except that the foregoing exemption shall not apply with respect to any such security where the issuer takes from the total amount paid or deposited by the purchaser, by way of any fee, cash value or other device whatsoever, either upon termination of the investment at maturity or before maturity, an aggregate amount in excess of 3 per centum of the face value of such security".

1982 Amendments. Subsec. (a)(6). Pub.L. 97-261 struck out "security issued by a motor carrier the issuance of which is subject to the provisions of section 11302 of Title 49, or any" after "Any".

1980 Amendments. Subsec. (a)(2).  Pub.L. 96-477, § 701, provided that single trust funds did not have to be maintained by banks in order to qualify for exemption from the provisions of this subchapter, substituted provisions relating to securities arising out of contracts issued by insurance companies for provisions relating to separate accounts maintained by insurance companies, provided that an interest, participation, or security could be issued in connection with certain governmental plans as defined in section 414(d) of Title 26 and qualify for exemption from the provisions of this subchapter, and excluded from exemption plans described in cls. (A), (B), or (C) of par. (2) which were funded by annuity contracts described in section 403(b) of Title 26.

Subsec. (b). Pub.L. 96-477, § 301, substituted "$5,000,000" for "$2,000,000".

1978 Amendments. Subsec. (a)(7).  Pub.L. 95-598, § 306(a), substituted "or debtor in possession in a case under Title 11" for "in bankruptcy".

Subsec. (a)(9), (10). Pub.L. 95-598, § 306(b), substituted "Except with respect to a security exchanged in a case under Title 11, any" for "Any".

Subsec. (b). Pub.L. 95-425 substituted "$2,000,000" for "$1,500,000".

Pub.L. 95-283 substituted "$1,500,000" for "$500,000".

1976 Amendments. Subsec. (a)(6).  Pub.L. 94-210, § 308(a)(1), (3), substituted provisions relating to any security issued by a motor carrier, subject to the provisions of section 314 of Title 49, or any interest in a railroad equipment trust, and provisions defining "interest in a railroad equipment trust", for provisions relating to any security issued by a common or contract carrier, subject to the provisions of section 20a of Title 49.

1970 Amendments. Subsec. (a)(2).  Pub.L. 91-567 exempted any interest or participation in any common trust fund or similar fund maintained by a bank exclusively for the collective investment and reinvestment of assets contributed thereto by such bank in its capacity as trustee, executor, administrator, or guardian, any security which is an industrial development bond the interest on which is excludable from gross income under section 103(a)(1) of Title 26, any interest or participation in a single or collective trust fund maintained by a bank or in a separate account maintained by an insurance company which interest or participation is issued in connection with a stock bonus, pension, or profit-sharing plan which meets the requirements for qualification under section 401 of Title 26, or an annuity plan which meets the requirements for the deduction of the employer's contribution under section 404(a)(2) of Title 26, directed the Commission to exempt from the provisions of section 77e of this title any interest or participation issued in connection with a stock bonus, pension, profit-sharing, or annuity plan which covers employees some or all of whom are employees within the meaning of section 401(c)(1) of Title 26 if and to the extent that the Commission determines this to be necessary or appropriate in the public interest and consistent with the protection of investors, and provided that for the purposes of this paragraph a security issued or guaranteed by a bank shall not include any interest or participation in any collective trust fund maintained by a bank, and that in the case of a common trust fund or similar fund, or a collective trust fund, the term "bank" has the same meaning as in the Investment Company Act of 1940.

Pub.L. 91-547, § 27(b), deleted following security of a Federal Reserve bank reference to industrial development bonds the interest on which is excludable from gross income under section 103(a)(1) of Title 26, and exempted from registration provisions interests or participations in common trust funds maintained by a bank for collective investment of assets held by it in a fiduciary capacity;  interests or participations in bank collective trust funds maintained for funding of employees' stock bonus, pension, or profit-sharing plans;  interests or participations in separate accounts maintained by insurance companies for funding certain stock-bonus, pension, or profit-sharing plans which meet the requirements for qualification under section 401 of Title 26;  and interests or participations issued by bank collective trust funds or insurance company separate accounts for funding certain stock-bonus, pension, profit-sharing, or annuity plans when the Commission by rule, regulation, or order determines this to be necessary in the public interest;  provided that a security issued or guaranteed by a bank shall not include any interest or participation in any collective trust fund maintained by a bank;  substituted where first appearing "security issued or guaranteed by any bank" for "security issued or guaranteed by any national bank, or by any banking institution organized under the laws of any State or Territory or the District of Columbia, the business of which is substantially confined to banking and is supervised by the State or Territorial banking commission or similar official", the latter provision now incorporated in a separate definition of term "bank";  and made the Investment Company Act definition of bank applicable as in the case of a common trust fund or similar fund, or a collective trust fund.

Pub.L. 91-373 added reference to industrial development bonds the interest on which is excludable from gross income under section 103(a)(1) of Title 26.

Subsec. (a)(5). Pub.L. 91-547, § 27(c), designated existing provisions as cl. (A), included cooperative bank issues, required the issuer to be an institution which is supervised and examined by State or Federal authority having supervision over such institution, deleted provision following "similar institution" reading "substantially all the business of which is confined to the making of loans to members" and substituted provisions designated as cl. (B) for prior provision relating to a security issued by a farmers' cooperative association as defined in paragraphs (12), (13), and (14) of section 103 of the Revenue Act of 1932.

Subsec. (b). Pub.L. 91-565 substituted "$500,000" for "$300,000."

1958 Amendments. Subsec. (c).  Pub.L. 85-699 added subsec. (c).

1954 Amendments. Subsec. (a)(11).  Act Aug. 10, 1954 inserted "offered and" preceding "sold".

1945 Amendments. Subsec. (b).  Act May 15, 1945 substituted "$300,000" for "$100,000".

1938 Amendments. Subsec. (a)(6).  Act June 29, 1938 reenacted par. (6) without change.

1935 Amendments. Subsec. (a)(6).  Act Feb. 4, 1887 as added by Act Aug. 9, 1935, included a security issued by a contract carrier.

1934 Amendments. Subsec. (a).  Act June 6, 1934 amended pars. (2), (4), and (8) and added pars. (9), (10), and (11).

Effective and Applicability Provisions

1999 Acts. Pub.L. 106-102, Title II, § 225, Nov. 12, 1999, 113 Stat. 1402, provided that:  "This subtitle [Subtitle B of Title II (§§ 211 to 225) of Pub.L. 106-102, Nov. 12, 1999, 113 Stat. 1396 to 1402;  enacting section 80b-10a of this title, amending sections 77c, 78c, 80a-2, 80a-3, 80a-9, 80a-10, 80a-17, 80a-26, 80a-34, and 80b-2 of this title, and enacting this note] shall take effect 18 months after the date of the enactment of this Act [Nov. 12, 1999]."

1995 Acts. Section 7 of Pub.L. 104-62 provided that:  "This Act and the amendments made by this Act [enacting section 80a-3a of this title and amending this section and sections 78c, 78l, 80a-3, 80a-7, and 80b-3 of this title] shall apply in all administrative and judicial actions pending on or commenced after the date of enactment of this Act [Dec. 8, 1995], as a defense to any claim that any person, security, interest, or participation of the type described in this Act and the amendments made by this Act [enacting section 80a-3a of this title and amending this section and sections 78c, 78l, 80a-3, 80a-7, and 80b-3 of this title] is subject to the provisions of the Securities Act of 1933 [section 77a et seq. of this title], the Securities Exchange Act of 1934 [section 78a et seq. of this title], the Investment Company Act of 1940 [section 80a-1 et seq. of this title], or the Investment Advisers Act of 1940 [section 80b-1 et seq. of this title], or any State statute or regulation preempted as provided in section 6 of this Act [section 80a-3a of this title], except as otherwise specifically provided in such Acts or State law."

1982 Acts. Amendment by Pub.L. 97-261 to subsec. (a)(6) of this section effective the 60th day after Sept. 20, 1982, see section 31(a) of Pub.L. 97-261.

1978 Acts. Amendment of subsec. (a)(7), (9), and (10) effective Oct. 1, 1979, see section 402(a) of Pub.L. 95-598, set out as a note preceding section 101 of Title 11, Bankruptcy.

1976 Acts. Section 308(d)(1) of Pub.L. 94-210 provided that:  "The amendments made by subsection (a) of this section [amending subsec. (a)(6) of this section and section 77s of this title and section 314 of Title 49, Transportation] shall take effect on the 60th day after the date of enactment of this Act [Feb. 5, 1976], but shall not apply to any bona fide offering of a security made by the issuer, or by or through an underwriter, before such 60th day."

1970 Acts. Section 6(d) of Pub.L. 91-567 provided that:  "The amendments made by this section [to subsec. (a)(2) of this section and sections 77ddd(a)(4) and 78c(a)(12) of this title] shall apply with respect to securities sold after January 1, 1970."

Amendment of subsec. (a)(2) and (5) of this section and enactment of note provisions hereunder by Pub.L. 91-547 effective Dec. 14, 1970, see section 30 of Pub.L. 91-547, set out as a note under section 80a-52 of this title.

Section 401(c) of Pub.L. 91-373 provided that:  "The amendments made by this section [amending this section and section 78c(a)(12) of this title] shall apply with respect to securities sold after January 1, 1970."

1954 Acts. Amendment effective 60 days after Aug. 10, 1954, see section 501 of Act Aug. 10, 1954, set out as a note under section 77b of this title.

Repeals

Act Feb. 14, 1887, c. 104, Title II, § 214, as added Aug. 9, 1935, c. 498, 49 Stat. 557, cited as a credit to this section, was repealed by Pub.L. 97-449,§ 7(b), Jan. 12, 1983, 96 Stat. 2443.

Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to chairman of such commission, see Reorg. Plan No. 10 of 1950,§§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.

Securities and Investment Company Provisions Inapplicable to Certain Life Insurance Benefits Issued Prior to March 23, 1959

Section 29 of Pub.L. 91-547 provided that:  "The provisions of the Securities Act of 1933 [this subchapter] and the Investment Company Act of 1940 [section 80a-1 et seq. of this title] shall not apply, except for purposes of definition of terms used in this section, to any interest or participation (including any separate account or other fund providing for the sharing of income or gains and losses, and any interest or participation in such account or fund) in any contract, certificate, or policy providing for life insurance benefits which was issued prior to March 23, 1959, by an insurance company, if (1) the form of such contract, certificate, or policy was approved by the insurance commissioner, or similar official or agency, of a State, territory or the District of Columbia, and (2) under such contract, certificate, or policy not to exceed 49 per centum of the gross premiums or other consideration paid was to be allocated to a separate account or other fund providing for the sharing of income or gains and losses.  Nothing herein contained shall be taken to imply that any such interest or participation constitutes a 'security' under any other laws of the United States."

Current through P.L. 106-274, approved 9-22-2000

The provisions of section 77e of this title shall not apply to--

(1) transactions by any person other than an issuer, underwriter, or dealer.

(2) transactions by an issuer not involving any public offering.

(3) transactions by a dealer (including an underwriter no longer acting as an underwriter in respect of the security involved in such transaction), except--

(A) transactions taking place prior to the expiration of forty days after the first date upon which the security was bona fide offered to the public by the issuer or by or through an underwriter,

(B) transactions in a security as to which a registration statement has been filed taking place prior to the expiration of forty days after the effective date of such registration statement or prior to the expiration of forty days after the first date upon which the security was bona fide offered to the public by the issuer or by or through an underwriter after such effective date, whichever is later (excluding in the computation of such forty days any time during which a stop order issued under section 77h of this title is in effect as to the security), or such shorter period as the Commission may specify by rules and regulations or order, and

(C) transactions as to securities constituting the whole or a part of an unsold allotment to or subscription by such dealer as a participant in the distribution of such securities by the issuer or by or through an underwriter.

With respect to transactions referred to in clause (B), if securities of the issuer have not previously been sold pursuant to an earlier effective registration statement the applicable period, instead of forty days, shall be ninety days, or such shorter period as the Commission may specify by rules and regulations or order.

(4) brokers' transactions executed upon customers' orders on any exchange or in the over-the-counter market but not the solicitation of such orders.

(5)(A) Transactions  [FN1] involving offers or sales of one or more promissory notes directly secured by a first lien on a single parcel of real estate upon which is located a dwelling or other residential or commercial structure, and participation interests in such notes--

(i) where such securities are originated by a savings and loan association, savings bank, commercial bank, or similar banking institution which is supervised and examined by a Federal or State authority, and are offered and sold subject to the following conditions:

(a) the minimum aggregate sales price per purchaser shall not be less than $250,000;

(b) the purchaser shall pay cash either at the time of the sale or within sixty days thereof;  and

(c) each purchaser shall buy for his own account only;  or

(ii) where such securities are originated by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 1709 and 1715b of Title 12 and are offered or sold subject to the three conditions specified in subparagraph (A)(i) to any institution described in such subparagraph or to any insurance company subject to the supervision of the insurance commissioner, or any agency or officer performing like function, of any State or territory of the United States or the District of Columbia, or the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Government National Mortgage Association.

(B) Transactions  [FN1] between any of the entities described in subparagraph (A)(i) or (A)(ii) involving non-assignable contracts to buy or sell the foregoing securities which are to be completed within two years, where the seller of the foregoing securities pursuant to any such contract is one of the parties described in subparagraph (A)(i) or (A)(ii) who may originate such securities and the purchaser of such securities pursuant to any such contract is any institution described in subparagraph (A)(i) or any insurance company described in subparagraph (A)(ii), the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, or the Government National Mortgage Association and where the foregoing securities are subject to the three conditions for sale set forth in subparagraphs (A)(i)(a) through (c).

(C) The  [FN1] exemption provided by subparagraphs (A) and (B) shall not apply to resales of the securities acquired pursuant thereto, unless each of the conditions for sale contained in subparagraphs (A)(i)(a) through (c) are satisfied.

(6) transactions involving offers or sales by an issuer solely to one or more accredited investors, if the aggregate offering price of an issue of securities offered in reliance on this paragraph does not exceed the amount allowed under section 77c(b) of this title, if there is no advertising or public solicitation in connection with the transaction by the issuer or anyone acting on the issuer's behalf, and if the issuer files such notice with the Commission as the Commission shall prescribe.

CREDIT(S)

1997 Main Volume

(May 27, 1933, c. 38, Title I, § 4, 48 Stat. 77;  June 6, 1934, c. 404, Title II, § 203, 48 Stat. 906;  Aug. 10, 1954, c. 667, Title I, § 6, 68 Stat. 684;  Aug. 20, 1964, Pub.L. 88-467, § 12, 78 Stat. 580;  June 4, 1975, Pub.L. 94-29,§ 30, 89 Stat. 169;  Oct. 21, 1980, Pub.L. 96-477, Title VI, § 602, 94 Stat. 2294.)

[FN1]  So in original.  Probably should not be capitalized.

HISTORICAL AND STATUTORY NOTES 

Revision Notes and Legislative Reports

1954 Acts. House Report No. 1542 and Conference Report No. 2433, see 1954 U.S. Code Cong. and Adm. News, p. 2973.

1964 Acts. House Report No. 1418, see 1964 U.S. Code Cong. and Adm. News, p. 3013.

1975 Acts. Senate Report No. 94-75 and House Conference Report No. 94-229, see 1975 U.S. Code Cong. and Adm. News, p. 179.

1980 Acts. House Report No. 96-1341, see 1980 U.S. Code Cong. and Adm. News, p. 4800.

Amendments

1980 Amendments. Par. (6).  Pub.L. 96-477 added par. (6).

1975 Amendments. Par. (5).  Pub.L. 94-29 added par. (5).

1964 Amendments. Pub.L. 88-467 substituted in the introductory statement "shall not apply to--" for "shall not apply to any of the following transactions:".

Par. (1). Pub.L. 88-467 reenacted the existing first provision of par. (1) and eliminated the second and third provisions, which are now incorporated in pars. (2) and (3)(A) to (C).

Par. (2). Pub.L. 88-467 redesignated the second provision of former par. (1) as par. (2).  Former par. (2) redesignated par. (4).

Par. (3). Pub.L. 88-467 redesignated the third provision of former par. (1) as par. (3), designated the excepted transactions as cls. (A) to (C), inserted in cl. (B) "or such shorter period as the Commission may specify by rules and regulations or order" and added the sentence relating to the applicable period to transactions referred to in cl. (B).

Par. (4). Pub.L. 88-467 redesignated former par. (2) as par. (4) and substituted "over-the-counter market" for "open or counter market".

1954 Amendments. Act Aug. 10, 1954 reduced from 1 year to 40 days the period during which the delivery of a prospectus is required in trading transactions as distinguished from initial distribution of the new securities.

1934 Amendments. Act June 6, 1934, among other changes, repealed a former par. (3), provisions of which are now covered by section 77c(9), (10) of this title.

Effective and Applicability Provisions

1975 Acts. Amendment by Pub.L. 94-29 effective June 4, 1975, see section 31(a) of Pub.L. 94-29, set out as a note under section 78b of this title.

1964 Acts. Amendment by Pub.L. 88-467 effective Aug. 20, 1964, see section 13 of Pub.L. 88-467, set out as a note under section 78c of this title.

1954 Acts. Amendment by Act Aug. 10, 1954, effective 60 days after Aug. 10, 1954, see section 501 of Act Aug. 10, 1954, set out as a note under section 77b of this title.

Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to chairman of such commission, see Reorg.Plan No. 10 of 1950,§§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.

Current through P.L. 106-274, approved 9-22-2000

(a) Sale or delivery after sale of unregistered securities

Unless a registration statement is in effect as to a security, it shall be unlawful for any person, directly or indirectly--

(1) to make use of any means or instruments of transportation or communication in interstate commerce or of the mails to sell such security through the use or medium of any prospectus or otherwise;  or

(2) to carry or cause to be carried through the mails or in interstate commerce, by any means or instruments of transportation, any such security for the purpose of sale or for delivery after sale.

(b) Necessity of prospectus meeting requirements of section 77j of this title

It shall be unlawful for any person, directly or indirectly--

(1) to make use of any means or instruments of transportation or communication in interstate commerce or of the mails to carry or transmit any prospectus relating to any security with respect to which a registration statement has been filed under this subchapter, unless such prospectus meets the requirements of section 77j of this title;  or

(2) to carry or cause to be carried through the mails or in interstate commerce any such security for the purpose of sale or for delivery after sale, unless accompanied or preceded by a prospectus that meets the requirements of subsection (a) of section 77j of this title.

(c) Necessity of filing registration statement

It shall be unlawful for any person, directly or indirectly, to make use of any means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell or offer to buy through the use or medium of any prospectus or otherwise any security, unless a registration statement has been filed as to such security, or while the registration statement is the subject of a refusal order or stop order or (prior to the effective date of the registration statement) any public proceeding or examination under section 77h of this title.

CREDIT(S)

1997 Main Volume

(May 27, 1933, c. 38, Title I, § 5, 48 Stat. 77;  June 6, 1934, c. 404, Title II, § 204, 48 Stat. 906;  Aug. 10, 1954, c. 667, Title I, § 7, 68 Stat. 684.)

HISTORICAL AND STATUTORY NOTES 

Revision Notes and Legislative Reports

1954 Acts. House Report No. 1542 and Conference Report No. 2433, see 1954 U.S. Code Cong. and Adm. News, p. 2973.

Amendments

1954 Amendments. Subsec. (a)(1).  Act Aug. 10, 1954 deleted "or offer to buy" following "to sell".

Subsec. (b).  Act Aug. 10, 1954, in par. (1), substituted "with respect to which a registration statement has been filed" for "registered" and in par. (2) omitted "to" following "to carry or" and added "subsection (a) of" preceding "section 77j of this title".

Subsec. (c).  Act Aug. 10, 1954 added subsec. (c).

1934 Amendments. Subsec. (c).  Act June 6, 1934 repealed subsec. (c), the provisions of which were replaced by section 77c(a)(11) of this title.

Effective and Applicability Provisions

1954 Acts. Amendment effective 60 days after Aug. 10, 1954, see section 501 of Act Aug. 10, 1954, set out as a note under section 77b of this title.

Increased Access to Foreign Business Information

Pub.L. 104-290, Title I, § 109, Oct. 11, 1996, 110 Stat. 3426, provided that:  "Not later than 1 year after the date of enactment of this Act [Oct. 11, 1996], the Commission shall adopt rules under the Securities Act of 1933 [this subchapter] concerning the status under the registration provisions of the Securities Act of 1933 of foreign press conferences and foreign press releases by persons engaged in the offer and sale of securities."

Current through P.L. 106-274, approved 9-22-2000

(a) Method of registration

Any security may be registered with the Commission under the terms and conditions hereinafter provided, by filing a registration statement in triplicate, at least one of which shall be signed by each issuer, its principal executive officer or officers, its principal financial officer, its comptroller or principal accounting officer, and the majority of its board of directors or persons performing similar functions (or, if there is no board of directors or persons performing similar functions, by the majority of the persons or board having the power of management of the issuer), and in case the issuer is a foreign or Territorial person by its duly authorized representative in the United States;  except that when such registration statement relates to a security issued by a foreign government, or political subdivision thereof, it need be signed only by the underwriter of such security.  Signatures of all such persons when written on the said registration statements shall be presumed to have been so written by authority of the person whose signature is so affixed and the burden of proof, in the event such authority shall be denied, shall be upon the party denying the same.  The affixing of any signature without the authority of the purported signer shall constitute a violation of this subchapter.  A registration statement shall be deemed effective only as to the securities specified therein as proposed to be offered.

(b) Registration fee

(1) Recovery of cost of services

The Commission shall, in accordance with this subsection, collect registration fees that are designed to recover the costs to the government of the securities registration process, and costs related to such process, including enforcement activities, policy and rulemaking activities, administration, legal services, and international regulatory activities.

(2) Fee payment required

At the time of filing a registration statement, the applicant shall pay to the Commission a fee that shall be equal to the sum of the amounts (if any) determined under the rates established by paragraphs (3) and (4).  The Commission shall publish in the Federal Register notices of the fee rates applicable under this section for each fiscal year.

(3) General revenue fees

The rate determined under this paragraph is a rate equal to $200 per $1,000,000 of the maximum aggregate price at which such securities are proposed to be offered, except that during fiscal year 2007 and any succeeding fiscal year such rate is equal to $67 per $1,000,000 of the maximum aggregate price at which such securities are proposed to be offered.  Fees collected during any fiscal year pursuant to this paragraph shall be deposited and credited as general revenues of the Treasury.

(4) Offsetting collection fees

(A) In general

Except as provided in subparagraphs (B) and (C), the rate determined under this paragraph is a rate equal to the following amount per $1,000,000 of the maximum aggregate price at which such securities are proposed to be offered:

(i) $95 during fiscal year 1998;

(ii) $78 during fiscal year 1999;

(iii) $64 during fiscal year 2000;

(iv) $50 during fiscal year 2001;

(v) $39 during fiscal year 2002;

(vi) $28 during fiscal year 2003;

(vii) $9 during fiscal year 2004;

(viii) $5 during fiscal year 2005;  and

(ix) $0 during fiscal year 2006 or any succeeding fiscal year.

(B) Limitation;  deposit

Except as provided in subparagraph (C), no amounts shall be collected pursuant to this paragraph (4) for any fiscal year except to the extent provided in advance in appropriations Acts.  Fees collected during any fiscal year pursuant to this paragraph shall be deposited and credited as offsetting collections in accordance with appropriations Acts.

(C) Lapse of appropriations

If on the first day of a fiscal year a regular appropriation to the Commission has not been enacted, the Commission shall continue to collect fees (as offsetting collections) under this paragraph at the rate in effect during the preceding fiscal year, until such a regular appropriation is enacted.

(5) Pro rata application of rates

The rates required by this subsection shall be applied pro rata to amounts and balances equal to less than $1,000,000.

(c) Time registration effective

The filing with the Commission of a registration statement, or of an amendment to a registration statement, shall be deemed to have taken place upon the receipt thereof, but the filing of a registration statement shall not be deemed to have taken place unless it is accompanied by a United States postal money order or a certified bank check or cash for the amount of the fee required under subsection (b) of this section.

(d) Information available to public

The information contained in or filed with any registration statement shall be made available to the public under such regulations as the Commission may prescribe, and copies thereof, photostatic or otherwise, shall be furnished to every applicant at such reasonable charge as the Commission may prescribe.

CREDIT(S)

1997 Main Volume

(May 27, 1933, c. 38, Title I, § 6, 48 Stat. 78;  Oct. 22, 1965, Pub.L. 89-289,§ 1, 79 Stat. 1051;  Dec. 4, 1987, Pub.L. 100-181, Title II, § 205, 101 Stat. 1252;  Oct. 11, 1996, Pub.L. 104-290, Title IV, § 404, 110 Stat. 3441.)

HISTORICAL AND STATUTORY NOTES 

Revision Notes and Legislative Reports

1965 Acts. House Report No. 1015, see 1965 U.S. Code Cong. and Adm. News, p. 3762.

1987 Acts. Senate Report No. 100-105, see 1987 U.S. Code Cong. and Adm. News, p. 2089.

1996 Acts. House Report No. 104-622 and House Conference Report No. 104-864, see 1996 U.S. Code Cong. and Adm. News, p. 3877.

Amendments

1996 Amendments. Subsec. (b).  Pub.L. 104-290, § 404, substituted provisions set out as pars. (1) to (5) relating to recovery of cost of services, fee payment required, general revenue fees, offsetting collection fees, and pro rata application of rates, respectively, for provisions providing that applicant pay fee of one-fiftieth of 1 per centum of the maximum aggregate price at which securities are proposed to be offered, but not less than $100.

1987 Amendments. Subsec. (e). Pub.L. 100-181 struck out the subsection which had originally provided that no registration statement should be filed within the first 40 days following May 27, 1933.

1965 Amendments. Subsec. (b).  Pub.L. 89-289 substituted "one-fiftieth" for "one one-hundredth" and "$100" for "$25".

Effective and Applicability Provisions

1965 Acts. Section 2 of Pub.L. 89-289 provided that:  "The amendment made by the first section of this Act [amending this section] shall take effect January 1, 1966."

Transfer of Functions

For transfer of the functions of the Securities and Exchange Commission, with certain exceptions, to the chairman of such commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.

Availability of Funds Collected Under Fee Rate and Offsetting Collection Authority

Pub.L. 105-46, § 113, Sept. 30, 1997, 111 Stat. 1156, provided that:  "Notwithstanding any other provision of this joint resolution [H.J. Res. 94, which was enacted as Pub.L. 105-46], except section 106 [section 106 of Pub.L. 105-46 was not classified to the Code], the amount made available to the Securities and Exchange Commission, under the heading Salaries and Expenses, shall include, in addition to direct appropriations, the amount it collects under the fee rate and offsetting collection authority contained in Public Law 104-208 [set out as the "Increase in Fees" note under this section], which fee rate and offsetting collection authority shall remain in effect during the period of this joint resolution."

Similar provisions were contained in the following continuing Appropriations Acts:

Pub.L. 104-99, Title II, § 209, Jan. 26, 1996, 110 Stat. 37.

Pub.L. 104-56, § 119, Nov. 20, 1995, 109 Stat. 552.

Pub.L. 104-54, § 119, Jan. 4, 1995, 109 Stat. 544.

Pub.L. 104-31, § 120, Sept. 30, 1995, 109 Stat. 282.

Increase in Fees

Pub.L. 104-208, Div. A, Title I, § 101(a) [Title V], Sept. 30, 1996, 110 Stat. 3009-___, provided in part:  "That immediately upon enactment of this Act [Pub.L. 104-208, 110 Stat. 3009, which was approved Sept. 30, 1996], the rate of fees under section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) [subsec. (b) of this section] shall increase from one-fiftieth of one percentum to one-thirty-third of one percentum, and such increase shall be deposited as an offsetting collection to this appropriation, to remain available until expended, to recover costs of services of the securities registration process."

Similar provisions were contained in the following prior Appropriations Act:

Pub.L. 104-134, Title I, § 101[(a)] [Title V], Apr. 26, 1996, 110 Stat. 1321-60;  renumbered Title I Pub.L. 104-140, § 1(a), May 2, 1996, 110 Stat. 1327.

Increase in Registration Fees and Deposit Into Treasury

Pub.L. 103-352, Oct. 10, 1994, 108 Stat. 3148, provided that:

"Section 1. Continued collection of revenues authorized.

"During fiscal year 1995, the rate of fees under section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) [subsec. (b) of this section] shall remain at 1/29 of 1 percent.

"Sec. 2. Deposit of collections.

"The fees collected under section 6(b) of the Securities Act of 1933 [subsec. (b) of this section] (to the extent attributable to a rate in excess of 1/50 of 1 percent by reason of section 1 of this Act) shall be deposited as an offsetting collection to the amounts appropriated to the Securities and Exchange Commission for fiscal year 1995, to remain available until expended."

Similar Provisions

Similar provisions were contained in the following prior Appropriations Acts:

Pub.L. 103-121, Title I, Oct. 27, 1993, 197 Stat. 1168.

Pub.L. 102-395, Title I, Oct. 6, 1992, 106 Stat. 1848.

Pub.L. 102-140, Title I, Oct. 28, 1991, 105 Stat. 798.

Pub.L. 101-515, Title V, Nov. 5, 1990, 104 Stat. 2139.

Pub.L. 101-162, Title V, Nov. 21, 1989, 103 Stat. 1022.

Current through P.L. 106-274, approved 9-22-2000

(a) The registration statement, when relating to a security other than a security issued by a foreign government, or political subdivision thereof, shall contain the information, and be accompanied by the documents, specified in Schedule A of section 77aa of this title, and when relating to a security issued by a foreign government, or political subdivision thereof, shall contain the information, and be accompanied by the documents, specified in Schedule B of section 77aa of this title;  except that the Commission may by rules or regulations provide that any such information or document need not be included in respect of any class of issuers or securities if it finds that the requirement of such information or document is inapplicable to such class and that disclosure fully adequate for the protection of investors is otherwise required to be included within the registration statement.  If any accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him, is named as having prepared or certified any part of the registration statement, or is named as having prepared or certified a report or valuation for use in connection with the registration statement, the written consent of such person shall be filed with the registration statement.  If any such person is named as having prepared or certified a report or valuation (other than a public official document or statement) which is used in connection with the registration statement, but is not named as having prepared or certified such report or valuation for use in connection with the registration statement, the written consent of such person shall be filed with the registration statement unless the Commission dispenses with such filing as impracticable or as involving undue hardship on the person filing the registration statement.  Any such registration statement shall contain such other information, and be accompanied by such other documents, as the Commission may by rules or regulations require as being necessary or appropriate in the public interest or for the protection of investors.

(b)(1) The Commission shall prescribe special rules with respect to registration statements filed by any issuer that is a blank check company.  Such rules may, as the Commission determines necessary or appropriate in the public interest or for the protection of investors--

(A) require such issuers to provide timely disclosure, prior to or after such statement becomes effective under section 77h of this title, of (i) information regarding the company to be acquired and the specific application of the proceeds of the offering, or (ii) additional information necessary to prevent such statement from being misleading;

(B) place limitations on the use of such proceeds and the distribution of securities by such issuer until the disclosures required under subparagraph (A) have been made;  and

(C) provide a right of rescission to shareholders of such securities.

(2) The Commission may, as it determines consistent with the public interest and the protection of investors, by rule or order exempt any issuer or class of issuers from the rules prescribed under paragraph (1).

(3) For purposes of paragraph (1) of this subsection, the term "blank check company" means any development stage company that is issuing a penny stock (within the meaning of section 78c(a)(51) of this title) and that--

(A) has no specific business plan or purpose;  or

(B) has indicated that its business plan is to merge with an unidentified company or companies.

CREDIT(S)

1997 Main Volume

(May 27, 1933, c. 38, Title I, § 7, 48 Stat. 78;  Oct. 15, 1990, Pub.L. 101-429, Title V, § 508, 104 Stat. 956.)

HISTORICAL AND STATUTORY NOTES 

Revision Notes and Legislative Reports

1990 Acts. House Report Nos. 101-616 and 101-617, see U.S. Code Cong. and Adm. News, p. 1379.

Amendments

1990 Amendments. Subsec. (a).  Pub.L. 101-429, § 508(1), designated existing provision as subsec. (a).

Subsec. (b).  Pub.L. 101-429, § 508(2), added subsec. (b).

Effective and Applicability Provisions

1990 Acts. Section 1(c) of Pub.L. 101-429 provided that:

"(1) In general.--Except as provided in paragraphs (2) and (3), the amendments made by this Act [enacting sections 77h-1, 78q-2, 78u-2, and 78u-3 of this title, amending sections 77g, 77t, 78c, 78o, 78o-3, 78o-4, 78q-1, 78u, 78u-1, 78w, 78cc, 80a-9, 80a-41, 80b-3, 80b-9, and 80b-14 of this title, and enacting provisions set out as notes under sections 78a, 78o, and 78s of this title] shall be effective upon enactment [Oct. 15, 1990].

"(2) Civil penalties.--

"(A) In general.--No civil penalty may be imposed pursuant to the amendments made by this Act on the basis of conduct occurring before the date of enactment of this Act [Oct. 15, 1990].

"(B) Accounting and disgorgement.--Subparagraph (A) shall not operate to preclude the Securities and Exchange Commission from ordering an accounting or disgorgement pursuant to the amendments made by this Act.

"(3) Special rules for Title V.--

"(A) Sections 503 and 504.--Except as provided in subparagraph (C), sections 503 [enacting section 78c(a)(51)