15 U.S.C. § 77d — Exempted transactions
submitted 93 years ago by ch. 38 to r/title-15-COMMERCE-AND-TRADE · 2,010 words · no verdicts yet
This law lists transactions that do not need SEC registration under section 77e. Exemptions cover casual resales, private placements, routine dealer trades, and small offerings to accredited investors. It also sets detailed rules for certain accredited-investor resales and for offerings that use general solicitation.
The provisions of section 77e of this title shall not apply to—
transactions by any person* other than an issuer, underwriter, or dealer.
transactions by an issuer not involving any public offering.
transactions by a dealer (including an underwriter no longer acting as an underwriter in respect of the security* involved in such transaction), except—
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,
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
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.
brokers’ transactions executed upon customers’ orders on any exchange or in the over-the-counter market but not the solicitation of such orders.
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)(1) 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.
transactions involving the offer or sale of securities by an issuer (including all entities controlled by or under common control with the issuer), provided that—
the aggregate amount sold to all investors by the issuer, including any amount sold in reliance on the exemption provided under this paragraph during the 12-month period preceding the date of such transaction, is not more than $1,000,000;
the aggregate amount sold to any investor by an issuer, including any amount sold in reliance on the exemption provided under this paragraph during the 12-month period preceding the date of such transaction, does not exceed—
the greater of $2,000 or 5 percent of the annual income or net worth of such investor, as applicable, if either the annual income or the net worth of the investor is less than $100,000; and
10 percent of the annual income or net worth of such investor, as applicable, not to exceed a maximum aggregate amount sold of $100,000, if either the annual income or net worth of the investor is equal to or more than $100,000;
the transaction is conducted through a broker or funding portal that complies with the requirements of section 77d–1(a) of this title; and
the issuer complies with the requirements of section 77d–1(b) of this title.
transactions meeting the requirements of subsection (d).
Offers and sales exempt under section 230.506 of title 17, Code of Federal Regulations (as revised pursuant to section 201 of the Jumpstart Our Business Startups Act) shall not be deemed public offerings under the Federal securities laws as a result of general advertising or general solicitation.
With respect to securities offered and sold in compliance with Rule 506 of Regulation D under this subchapter, no person who meets the conditions set forth in paragraph (2) shall be subject to registration as a broker or dealer pursuant to section 78o(a)(1) of this title,1 solely because—
that person maintains a platform or mechanism that permits the offer, sale, purchase, or negotiation of or with respect to securities, or permits general solicitations, general advertisements, or similar or related activities by issuers of such securities, whether online, in person, or through any other means;
that person or any person associated with that person co-invests in such securities; or
that person or any person associated with that person provides ancillary services with respect to such securities.
The exemption provided in paragraph (1) shall apply to any person described in such paragraph if—
such person and each person associated with that person receives no compensation in connection with the purchase or sale of such security;
such person and each person associated with that person does not have possession of customer funds or securities in connection with the purchase or sale of such security; and
such person is not subject to a statutory disqualification as defined in section 78c(a)(39) of this title1 and does not have any person associated with that person subject to such a statutory disqualification.
For the purposes of this subsection, the term “ancillary services” means—
the provision of due diligence services, in connection with the offer, sale, purchase, or negotiation of such security, so long as such services do not include, for separate compensation, investment advice or recommendations to issuers or investors; and
the provision of standardized documents to the issuers and investors, so long as such person or entity does not negotiate the terms of the issuance for and on behalf of third parties and issuers are not required to use the standardized documents as a condition of using the service.
The transactions referred to in subsection (a)(7) are transactions meeting the following requirements:
Each purchaser is an accredited investor, as that term is defined in section 230.501(a) of title 17, Code of Federal Regulations (or any successor regulation).
Neither the seller, nor any person acting on the seller’s behalf, offers or sells securities by any form of general solicitation or general advertising.
In the case of a transaction involving the securities of an issuer that is neither subject to section 78m or 78o(d) of this title, nor exempt from reporting pursuant to section 240.12g3–2(b) of title 17, Code of Federal Regulations, nor a foreign government (as defined in section 230.405 of title 17, Code of Federal Regulations) eligible to register securities under Schedule B, the seller and a prospective purchaser designated by the seller obtain from the issuer, upon request of the seller, and the seller in all cases makes available to a prospective purchaser, the following information (which shall be reasonably current in relation to the date of resale under this section):
The exact name of the issuer and the issuer’s predecessor (if any).
The address of the issuer’s principal executive offices.
The exact title and class of the security.
The par or stated value of the security.
The number of shares or total amount of the securities outstanding as of the end of the issuer’s most recent fiscal year.
The name and address of the transfer agent, corporate secretary, or other person responsible for transferring shares and stock certificates.
A statement of the nature of the business of the issuer and the products and services it offers, which shall be presumed reasonably current if the statement is as of 12 months before the transaction date.
The names of the officers and directors of the issuer.
The names of any persons registered as a broker, dealer, or agent that shall be paid or given, directly or indirectly, any commission or remuneration for such person’s participation in the offer or sale of the securities.
The issuer’s most recent balance sheet and profit and loss statement and similar financial statements, which shall—
be for such part of the 2 preceding fiscal years as the issuer has been in operation;
be prepared in accordance with generally accepted accounting principles or, in the case of a foreign private issuer, be prepared in accordance with generally accepted accounting principles or the International Financial Reporting Standards issued by the International Accounting Standards Board;
be presumed reasonably current if—
with respect to the balance sheet, the balance sheet is as of a date less than 16 months before the transaction date; and
with respect to the profit and loss statement, such statement is for the 12 months preceding the date of the issuer’s balance sheet; and
if the balance sheet is not as of a date less than 6 months before the transaction date, be accompanied by additional statements of profit and loss for the period from the date of such balance sheet to a date less than 6 months before the transaction date.
To the extent that the seller is a control person with respect to the issuer, a brief statement regarding the nature of the affiliation, and a statement certified by such seller that they have no reasonable grounds to believe that the issuer is in violation of the securities laws or regulations.
The transaction is not for the sale of a security where the seller is an issuer or a subsidiary, either directly or indirectly, of the issuer.
Neither the seller, nor any person that has been or will be paid (directly or indirectly) remuneration or a commission for their participation in the offer or sale of the securities, including solicitation of purchasers for the seller is subject to an event that would disqualify an issuer or other covered person under Rule 506(d)(1) of Regulation D (17 CFR 230.506(d)(1)) or is subject to a statutory disqualification described under section 78c(a)(39) of this title.
The issuer is engaged in business, is not in the organizational stage or in bankruptcy or receivership, and is not a blank check, blind pool, or shell company that has no specific business plan or purpose or has indicated that the issuer’s primary business plan is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person.
The transaction is not with respect to a security that constitutes the whole or part of an unsold allotment to, or a subscription or participation by, a broker or dealer as an underwriter of the security or a redistribution.
The transaction is with respect to a security of a class that has been authorized and outstanding for at least 90 days prior to the date of the transaction.
With respect to an exempted transaction described under subsection (a)(7):
Securities acquired in such transaction shall be deemed to have been acquired in a transaction not involving any public offering.
Such transaction shall be deemed not to be a distribution for purposes of section 77b(a)(11) of this title.
Securities involved in such transaction shall be deemed to be restricted securities within the meaning of Rule 144 (17 CFR 230.144).
The exemption provided by subsection (a)(7) shall not be the exclusive means for establishing an exemption from the registration requirements of section 77e of this title.
Source credit: (May 27, 1933, ch. 38, title I, § 4, 48 Stat. 77; June 6, 1934, ch. 404, title II, § 203, 48 Stat. 906; Aug. 10, 1954, ch. 667, title I, § 6, 68 Stat. 684; Pub. L. 88–467, § 12, Aug. 20, 1964, 78 Stat. 580; Pub. L. 94–29, § 30, June 4, 1975, 89 Stat. 169; Pub. L. 96–477, title VI, § 602, Oct. 21, 1980, 94 Stat. 2294; Pub. L. 111–203, title IX, § 944(a), July 21, 2010, 124 Stat. 1897; Pub. L. 112–106, title II, § 201(b), (c), title III, § 302(a), title IV, § 401(c), Apr. 5, 2012, 126 Stat. 314, 315, 325; Pub. L. 114–94, div. G, title LXXVI, § 76001(a), Dec. 4, 2015, 129 Stat. 1787.)
- 1933Enacted · Act of May 27, 1933, ch. 38 · 48 Stat. 77
- 1934Amended · Act of June 6, 1934, ch. 404 · 48 Stat. 906
- 1954Amended · Act of Aug. 10, 1954, ch. 667 · 68 Stat. 684
- 1964Amended · Pub. L. 88-467 · 78 Stat. 580
- 1975Amended · Pub. L. 94-29 · 89 Stat. 169
- 1980Amended · Pub. L. 96-477 · 94 Stat. 2294
- 2010Amended · Pub. L. 111-203 · 124 Stat. 1897
- 2012Amended · Pub. L. 112-106 · 126 Stat. 314, 315, 325
- 2015Amended · Pub. L. 114-94 · 129 Stat. 1787
A history note hasn’t been published yet. The record shows enactment by ch. 38 on 1933-05-27.
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