15 U.S.C. § 77e — Prohibitions relating to interstate commerce and the mails

submitted 93 years ago by ch. 38 to r/title-15-COMMERCE-AND-TRADE · 540 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section bans selling unregistered securities through the mail or interstate commerce. It also requires a proper prospectus before mailing a covered security or prospectus. Special rules cover early talks with big investors and swaps sold to non-eligible participants.

(a) Sale or delivery after sale of unregistered securities Unless a registration statement is in effect for a security, no one may (1) use interstate mail or commerce to sell it through a prospectus or any other way, or (2) mail or ship it, or have it mailed or shipped, in order to sell it or deliver it after a sale. (b) Necessity of a prospectus that meets section 77j No one may (1) use interstate mail or commerce to send a prospectus about a security whose registration statement has been filed, unless that prospectus meets the requirements of section 77j, or (2) mail or ship that security for sale or delivery after sale unless it comes with a prospectus that meets section 77j(a). (c) Necessity of filing a registration statement No one may use interstate mail or commerce to offer to sell or offer to buy a security — through a prospectus or otherwise — unless a registration statement has been filed for it. This also applies while the registration is under a refusal order, a stop order, or (before the registration takes effect) a public hearing or examination under section 77h. (d) Limitation Despite the rules above, an emerging growth company (or someone acting for one) may talk — by mouth or in writing — with potential investors who are qualified institutional buyers or accredited institutions, to gauge interest in a planned offering. This is allowed either before or after a registration statement is filed, as long as it follows subsection (b)(2)'s prospectus rule. (e) Security-based swaps Unless a registration statement meeting section 77j(a) is in effect, no one may use interstate mail or commerce to offer to sell, offer to buy, or actually buy or sell a security-based swap with someone who is not an "eligible contract participant" as defined in section 1a(18) of title 7. This rule applies even though sections 77c and 77d might otherwise allow it.

the actual law source: uscode.house.gov ↗public domain

(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.

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.

(d) Limitation

Notwithstanding any other provision of this section, an emerging growth company or any person authorized to act on behalf of an emerging growth company may engage in oral or written communications with potential investors that are qualified institutional buyers or institutions that are accredited investors, as such terms are respectively defined in section 230.144A and section 230.501(a) of title 17, Code of Federal Regulations, or any successor thereto, to determine whether such investors might have an interest in a contemplated securities offering, either prior to or following the date of filing of a registration statement with respect to such securities with the Commission, subject to the requirement of subsection (b)(2).

(e) Security-based swaps

Notwithstanding the provisions of section 77c or 77d of this title, unless a registration statement meeting the requirements of section 77j(a) of this title is in effect as to a security-based swap, 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, offer to buy or purchase or sell a security-based swap to any person who is not an eligible contract participant as defined in section 1a(18) of title 7.

Source credit: (May 27, 1933, ch. 38, title I, § 5, 48 Stat. 77; June 6, 1934, ch. 404, title II, § 204, 48 Stat. 906; Aug. 10, 1954, ch. 667, title I, § 7, 68 Stat. 684; Pub. L. 111–203, title VII, § 768(b), July 21, 2010, 124 Stat. 1801; Pub. L. 112–106, title I, § 105(c), Apr. 5, 2012, 126 Stat. 311.)

history & why it existsrecord from the source credit

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
2010Amended · Pub. L. 111-203 · 124 Stat. 1801
2012Amended · Pub. L. 112-106 · 126 Stat. 311

A history note hasn’t been published yet. The record shows enactment by ch. 38 on 1933-05-27.

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