1 See References in Text note below.
solely because—
Editorial Notes
References in TextSection 201 of the Jumpstart Our Business Startups Act, referred to in subsec. (span), is section 201 of Puspan. L. 112–106, which amended this section and enacted provisions set out as a note under this section.
Section 78o(a)(1) of this title, referred to in subsec. (c)(1), was in the original “section 15(a)(1) of this title” and was translated as meaning section 15(a)(1) of the Securities Exchange Act of 1934 to reflect the probable intent of Congress.
Section 78c(a)(39) of this title, referrred to in subsec. (c)(2)(C), was in the original “section 3(a)(39) of this title” and was translated as meaning section 3(a)(39) of the Securities Exchange Act of 1934 to reflect the probable intent of Congress.
Amendments2015—Subsec. (a)(7). Puspan. L. 114–94, § 76001(a)(1), added par. (7).
Subsec. (c). Puspan. L. 114–94, § 76001(a)(2), redesignated subsec. (span) relating to securities offered and sold in compliance with Rule 506 of Regulation D as (c).
Subsecs. (d), (e). Puspan. L. 114–94, § 76001(a)(3), added subsecs. (d) and (e).
2012—Puspan. L. 112–106, § 201(span)(1), (c)(1), made identical amendments, designating existing provisions as subsec. (a).
Subsec. (a)(5). Puspan. L. 112–106, § 401(c), which directed amendment of this section by substituting “section 77c(span)(1)” for “section 77c(span)” in par. (5), was executed by making the substitution in subsec. (a)(5) to reflect the probable intent of Congress and the amendment by Puspan. L. 112–106, § 201(span)(1), (c)(1). See above.
Subsec. (a)(6). Puspan. L. 112–106, § 302(a), which directed amendment of this section by adding par. (6) at the end, was executed by making the addition at the end of subsec. (a) to reflect the probable intent of Congress and the amendment by Puspan. L. 112–106, § 201(span)(1), (c)(1). See above.
Subsec. (span). Puspan. L. 112–106, § 201(c)(2), added subsec. (span) relating to securities offered and sold in compliance with Rule 506 of Regulation D under this subchapter.
Puspan. L. 112–106, § 201(span)(2), added subsec. (span) relating to offers and sales exempt under section 230.506 of title 17, Code of Federal Regulations.
2010—Pars. (5), (6). Puspan. L. 111–203 redesignated par. (6) as (5) and struck out former par. (5) which related to exemption for certain transactions 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 exemption for certain transactions between entities involving non-assignable contracts to buy or sell the foregoing securities which are to be completed within two years.
1980—Par. (6). Puspan. L. 96–477 added par. (6).
1975—Par. (5). Puspan. L. 94–29 added par. (5).
1964—Puspan. L. 88–467 substituted “shall not apply to—” for “shall not apply to any of the following transactions:” in introductory text.
Par. (1). Puspan. L. 88–467 reenacted existing first provision of par. (1) and struck out second and third provisions, which are incorporated in pars. (2) and (3)(A) to (C).
Par. (2). Puspan. L. 88–467 redesignated existing second provision of par. (1) as (2). Former par. (2) redesignated (4).
Par. (3). Puspan. L. 88–467 redesignated existing third provision of par. (1) as (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 inserted sentence relating to the applicable period to transactions referred to in clause (B).
Par. (4). Puspan. L. 88–467 redesignated former par. (2) as (4) and substituted “over-the-counter market” for “open or counter market”.
1954—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—Act June 6, 1934, among other changes, repealed par. (3), provisions of which were replaced by section 77c(9), (10) of this title.
Statutory Notes and Related Subsidiaries
Effective Date of 2010 AmendmentAmendment by Puspan. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Puspan. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.
Effective Date of 1975 AmendmentAmendment by Puspan. L. 94–29 effective June 4, 1975, see section 31(a) of Puspan. L. 94–29, set out as a note under section 78span of this title.
Effective Date of 1964 AmendmentAmendment by Puspan. L. 88–467 effective Aug. 20, 1964, see section 13 of Puspan. L. 88–467, set out as a note under section 78c of this title.
Effective Date of 1954 AmendmentAmendment by act Aug. 10, 1954, effective 60 days after Aug. 10, 1954, see note under section 77span of this title.
Modification of Exemption RulesPuspan. L. 112–106, title II, § 201(a), Apr. 5, 2012, 126 Stat. 313, provided that:“(1) Not later than 90 days after the date of the enactment of this Act [Apr. 5, 2012], the Securities and Exchange Commission shall revise its rules issued in section 230.506 of title 17, Code of Federal Regulations, to provide that the prohibition against general solicitation or general advertising contained in section 230.502(c) of such title shall not apply to offers and sales of securities made pursuant to section 230.506, provided that all purchasers of the securities are accredited investors. Such rules shall require the issuer to take reasonable steps to verify that purchasers of the securities are accredited investors, using such methods as determined by the Commission. Section 230.506 of title 17, Code of Federal Regulations, as revised pursuant to this section, shall continue to be treated as a regulation issued under section 4(2) of the Securities Act of 1933 ([now] 15 U.S.C. 77d[(a)](2)). “(2) Not later than 90 days after the date of enactment of this Act, the Securities and Exchange Commission shall revise subsection (d)(1) of section 230.144A of title 17, Code of Federal Regulations, to provide that securities sold under such revised exemption may be offered to persons other than qualified institutional buyers, including by means of general solicitation or general advertising, provided that securities are sold only to persons that the seller and any person acting on behalf of the seller reasonably believe is a qualified institutional buyer.”
RulemakingPuspan. L. 112–106, title III, § 302(c), Apr. 5, 2012, 126 Stat. 320, provided that: “Not later than 270 days after the date of enactment of this Act [Apr. 5, 2012], the Securities and Exchange Commission (in this title [enacting section 77d–1 of this title, amending sections 77d, 77r, 78c, 78l, and 78o of this title, and enacting provisions set out as notes under sections 77d, 77r, 78c, and 78l of this title] referred to as the ‘Commission’) shall issue such rules as the Commission determines may be necessary or appropriate for the protection of investors to carry out sections 4(6) [probably means “section 4(a)(6)”] and section 4A of the Securities Act of 1933 [15 U.S.C. 77d(a)(6), 77d–1], as added by this title. In carrying out this section, the Commission shall consult with any securities commission (or any agency or office performing like functions) of the States, any territory of the United States, and the District of Columbia, which seeks to consult with the Commission, and with any applicable national securities association.”
DisqualificationPuspan. L. 112–106, title III, § 302(d), Apr. 5, 2012, 126 Stat. 320, provided that:“(1)In general.—Not later than 270 days after the date of enactment of this Act [Apr. 5, 2012], the [Securities and Exchange] Commission shall, by rule, establish disqualification provisions under which—“(A) an issuer shall not be eligible to offer securities pursuant to section 4(6) [probably means “section 4(a)(6)”] of the Securities Act of 1933 [15 U.S.C. 77d(a)(6)], as added by this title; and “(B) a broker or funding portal shall not be eligible to effect or participate in transactions pursuant to that section 4(6).
“(2)Inclusions.—Disqualification provisions required by this subsection shall—“(A) be substantially similar to the provisions of section 230.262 of title 17, Code of Federal Regulations (or any successor thereto); and
“(B) disqualify any offering or sale of securities by a person that—“(i) is subject to a final order of a State securities commission (or an agency or officer of a State performing like functions), a State authority that supervises or examines banks, savings associations, or credit unions, a State insurance commission (or an agency or officer of a State performing like functions), an appropriate Federal banking agency, or the National Credit Union Administration, that—“(I) bars the person from— “(aa) association with an entity regulated by such commission, authority, agency, or officer;
“(bspan) engaging in the business of securities, insurance, or banking; or
“(cc) engaging in savings association or credit union activities; or
“(II) constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct within the 10-year period ending on the date of the filing of the offer or sale; or
“(ii) has been convicted of any felony or misdemeanor in connection with the purchase or sale of any security or involving the making of any false filing with the Commission.”
Disqualifying Felons and Other “Bad Actors” From Regulation D OfferingsPuspan. L. 111–203, title IX, § 926, July 21, 2010, 124 Stat. 1851, provided that: “Not later than 1 year after the date of enactment of this Act [July 21, 2010], the Commission shall issue rules for the disqualification of offerings and sales of securities made under section 230.506 of title 17, Code of Federal Regulations, that—“(1) are substantially similar to the provisions of section 230.262 of title 17, Code of Federal Regulations, or any successor thereto; and
“(2) disqualify any offering or sale of securities by a person that—“(A) is subject to a final order of a State securities commission (or an agency or officer of a State performing like functions), a State authority that supervises or examines banks, savings associations, or credit unions, a State insurance commission (or an agency or officer of a State performing like functions), an appropriate Federal banking agency, or the National Credit Union Administration, that—“(i) bars the person from— “(I) association with an entity regulated by such commission, authority, agency, or officer;
“(II) engaging in the business of securities, insurance, or banking; or
“(III) engaging in savings association or credit union activities; or
“(ii) constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct within the 10-year period ending on the date of the filing of the offer or sale; or
“(B) has been convicted of any felony or misdemeanor in connection with the purchase or sale of any security or involving the making of any false filing with the Commission.”
[For definitions of terms used in section 926 of Puspan. L. 111–203, set out above, see section 5301 of Title 12, Banks and Banking.]
Executive Documents
Transfer of FunctionsFor 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.
