15 U.S.C. § 77ddd — Exempted securities and transactions

(a) Specific securities exempted This subchapter does not apply to the securities listed below. (1) It only covers debt securities — notes, bonds, debentures, or other evidence of debt (secured or not), certificates of interest or participation in them, or temporary certificates or guarantees for them. Any other kind of security is exempt. (2) A certificate of interest or participation in two or more securities that have very different rights, or a temporary certificate for one, is exempt. (3) Repealed by Congress in 1990. (4) Securities that the Securities Act of 1933 already exempts under certain paragraphs of its section 3(a) are exempt here too. This covers both the original exemptions and the version amended by the Employment Security Amendments of 1970. (5) A security issued under a mortgage indenture that carries National Housing Act insurance is exempt, and is treated the same as a security specifically listed in section 3(a)(2) of the Securities Act of 1933. (6) A note, bond, debenture, or other debt security issued or guaranteed by a foreign government or one of its subdivisions, departments, municipalities, agencies, or instrumentalities is exempt. (7) A guarantee of any security exempted under this subsection is itself exempt. (8) A security issued outside of an indenture is exempt, but only up to the dollar limit set in section 3(b) of the Securities Act of 1933 (or a lower limit the SEC sets) for the same issuer in any 12-month period. (9) A security issued under an indenture that caps total outstanding securities at $10,000,000 (or a lower amount the SEC sets) is exempt, but this exemption cannot be used more than once for the same issuer within any 36-month period if it would push the issuer's total past $10,000,000. (10) A security issued under a mortgage or trust deed indenture insured under title XI of the National Housing Act is exempt, and is treated the same as a security listed in the amended section 3(a)(2) of the Securities Act of 1933. When counting an issuer's total under exemptions (8) and (9), leave out any securities that sections 77eee and 77fff would not have covered anyway. (b) Application of sections 77eee and 77fff Sections 77eee and 77fff (the sections requiring registration or qualification of an indenture) do not apply to (1) transactions already exempt from section 5 of the Securities Act of 1933 because of that Act's section 4, or (2) transactions that would be exempt under that section 4 except for the last sentence of section 2(a)(11) of that Act. (c) Securities issued or proposed to be issued under an indenture If an issuer applies and the SEC holds a hearing, the SEC can exempt a security from one or more provisions of this subchapter. This applies to indentures under which securities described in paragraph (3) of subsection (a) (now repealed) were outstanding either when the application was filed or on January 1, 1959. The SEC must find that requiring compliance — for example, through a new supplemental indenture — would either: (1) require the consent of security holders under that indenture, another indenture or agreement made before August 3, 1939, or under some other applicable law; or (2) place an undue burden on the issuer, after weighing the public interest and investors' interests. (d) Exemptions in the public interest On its own, or when someone applies, the SEC may exempt — with or without conditions — any person, registration statement, indenture, security, or transaction, or a whole class of them, from one or more provisions of this subchapter. It can do this whenever the exemption is necessary or appropriate for the public interest and matches investor protection and the goals of this subchapter. The SEC writes rules for how to apply for this kind of exemption, and it may simply refuse to consider an application if it chooses to. (e) Securities issued by a small investment company The SEC may add to the exempt list any class of securities issued by a small business investment company formed under the Small Business Investment Act of 1958. It can do this if, based on that Act's purposes, enforcing this subchapter against those securities is not needed to protect the public or investors.