15 U.S.C. § 77eee — Securities required to be registered under Securities Act

submitted 93 years ago by ch. 38 to r/title-15-COMMERCE-AND-TRADE · 1,108 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section says what a registration statement for an indenture security must include. It must show the trustee is eligible and explain key indenture terms like default and release of collateral. The SEC can refuse or later rescind that refusal, and the same disclosure rules apply to the prospectus.

(a) Information required A registration statement for a security must include the same information section 7 of the Securities Act of 1933 would require, plus: (1) whatever the SEC requires by rule to determine if the person named as trustee under the indenture is eligible to serve, under subsection (a) of section 77jjj; and (2) an analysis of the indenture's terms covering: (A) what counts as a default and whether security holders get notice of it; (B) how the securities are signed, delivered, and how the proceeds are used; (C) releasing (or releasing and replacing) property that backs the indenture; (D) how the indenture is satisfied and ended; and (E) what proof the borrower must give the trustee that it is following the indenture's terms and promises. The information about the proposed trustee must be in its own signed section of the registration statement. That section counts as a document filed under this subchapter, but sections 11, 12, 17, and 24 of the Securities Act of 1933 do not apply to anything stated or left out of it. (b) Refusal of registration statement (1) Except as paragraph (2) allows, the SEC must issue an order — before the registration would take effect — refusing to let it become effective if it finds either that the security was not or will not be issued under an indenture, or that the named trustee is not eligible under section 77jjj(a). The SEC can only do this after giving notice and a chance for a hearing, following the same timing as refusal orders under section 8(b) of the Securities Act of 1933. Once the SEC decides the problems it found have been fixed, it must cancel the refusal order, and registration takes effect either at the normal time or when the cancellation happens, whichever is later. (2) For securities registered under the Securities Act of 1933 that can be issued or sold later on a delayed basis, the SEC does not have to issue a refusal order just because no eligible trustee is named yet — as long as the issuer files an application, under SEC rules, to determine the trustee's eligibility. The SEC must still issue a refusal order, after notice and a hearing (under the same timing as section 8(b) refusal orders), if it finds the named trustee is not eligible. If the SEC issues such an order, the borrower must appoint an eligible trustee within 5 calendar days; the appointment isn't effective, and the refusal order isn't lifted, until an eligible trustee is in place. If the SEC issues no order, the application takes effect on the 10th day after filing (or an earlier date the SEC sets), based on how complete the information is, the public interest, and investor protection. (c) Information required in a prospectus To the extent the SEC requires by rule for the public interest or investor protection, a prospectus for such a security must include the same written analysis of indenture terms that appears in the registration statement, covering the matters in (a)(2). The SEC may add its own supplementary analysis of those terms if it decides that's necessary or appropriate, after giving notice and — if the issuer asks — a hearing. That order must come before registration takes effect, unless the issuer asked for a hearing, in which case it comes within a reasonable time after the hearing. (d) Applicability of other statutory provisions Sections 11, 12, 17, and 24 of the Securities Act of 1933, and sections 77www and 77yyy of this title, do not apply to statements in, or things left out of, any analysis required under this section or under section 77fff or 77ggg.

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

(a) Information required

Subject to the provisions of section 77ddd of this title, a registration statement relating to a security shall include the following information and documents, as though such inclusion were required by the provisions of section 7 of the Securities Act of 1933 [15 U.S.C. 77g]—

(1)

such information and documents as the Commission may by rules and regulations prescribe in order to enable the Commission to determine whether any person designated to act as trustee under the indenture under which such security has been or is to be issued is eligible to act as such under subsection (a) of section 77jjj of this title; and

(2)

an analysis of any provisions of such indenture with respect to (A) the definition of what shall constitute a default under such indenture, and the withholding of notice to the indenture security holders of any such default, (B) the authentication and delivery of the indenture securities and the application of the proceeds thereof, (C) the release or the release and substitution of any property subject to the lien of the indenture, (D) the satisfaction and discharge of the indenture, and (E) the evidence required to be furnished by the obligor upon the indenture securities to the trustee as to compliance with the conditions and covenants provided for in such indenture.

The information and documents required by paragraph (1) of this subsection with respect to the person designated to act as indenture trustee shall be contained in a separate part of such registration statement, which part shall be signed by such person. Such part of the registration statement shall be deemed to be a document filed pursuant to this subchapter, and the provisions of sections 11, 12, 17, and 24 of the Securities Act of 1933 [15 U.S.C. 77k, 77l, 77q, 77x] shall not apply to statements therein or omissions therefrom.

(b) Refusal of registration statement

(1)

Except as may be permitted by paragraph (2) of this subsection, the Commission shall issue an order prior to the effective date of registration refusing to permit such a registration statement to become effective, if it finds that—

(A)

the security to which such registration statement relates has not been or is not to be issued under an indenture; or

(B)

any person designated as trustee under such indenture is not eligible to act as such under subsection (a) of section 77jjj of this title;

but no such order shall be issued except after notice and opportunity for hearing within the periods and in the manner required with respect to refusal orders pursuant to section 8(b) of the Securities Act of 1933 [15 U.S.C. 77h(b)]. If and when the Commission deems that the objections on which such order was based have been met, the Commission shall enter an order rescinding such refusal order, and the registration shall become effective at the time provided in section 8(a) of the Securities Act of 1933 [15 U.S.C. 77h(a)], or upon the date of such rescission, whichever shall be the later.

(2)

In the case of securities registered under the Securities Act of 1933 [15 U.S.C. 77a et seq.], which securities are eligible to be issued, offered, or sold on a delayed basis by or on behalf of the registrant, the Commission shall not be required to issue an order pursuant to paragraph (1) of subsection (b) of this section for failure to designate a trustee eligible to act under subsection (a) of section 77jjj of this title if, in accordance with such rules and regulations as may be prescribed by the Commission, the issuer of such securities files an application for the purpose of determining such trustee’s eligibility under subsection (a) of section 77jjj of this title. The Commission shall issue an order prior to the effective date of such application refusing to permit the application to become effective, if it finds that any person designated as trustee under such indenture is not eligible to act as such under subsection (a) of section 77jjj of this title, but no order shall be issued except after notice and opportunity for hearing within the periods and in the manner required with respect to refusal orders pursuant to section 8(b) of the Securities Act of 1933 [15 U.S.C. 77h(b)]. If after notice and opportunity for hearing the Commission issues an order under this provision, the obligor shall within 5 calendar days appoint a trustee meeting the requirements of subsection (a) of section 77jjj of this title. No such appointment shall be effective and such refusal order shall not be rescinded by the Commission until a person eligible to act as trustee under subsection (a) of section 77jjj of this title has been appointed. If no order is issued, an application filed pursuant to this paragraph shall be effective the tenth day after filing thereof or such earlier date as the Commission may determine, having due regard to the adequacy of information provided therein, the public interest, and the protection of investors.

A prospectus relating to any such security shall include to the extent the Commission may prescribe by rules and regulations as necessary and appropriate in the public interest or for the protection of investors, as though such inclusion were required by section 10 of the Securities Act of 1933 [15 U.S.C. 77j], a written statement containing the analysis set forth in the registration statement, of any indenture provisions with respect to the matters specified in paragraph (2) of subsection (a) of this section, together with a supplementary analysis, prepared by the Commission, of such provisions and of the effect thereof, if, in the opinion of the Commission, the inclusion of such supplementary analysis is necessary or appropriate in the public interest or for the protection of investors, and the Commission so declares by order after notice and, if demanded by the issuer, opportunity for hearing thereon. Such order shall be entered prior to the effective date of registration, except that if opportunity for hearing thereon is demanded by the issuer such order shall be entered within a reasonable time after such opportunity for hearing.

(d) Applicability of other statutory provisions

The provisions of sections 11, 12, 17, and 24 of the Securities Act of 1933 [15 U.S.C. 77k, 77l, 77q, 77x], and the provisions of sections 77www and 77yyy of this title, shall not apply to statements in or omissions from any analysis required under the provisions of this section or section 77fff or 77ggg of this title.

Source credit: (May 27, 1933, ch. 38, title III, § 305, as added Aug. 3, 1939, ch. 411, 53 Stat. 1154; amended Aug. 10, 1954, ch. 667, title III, § 303, 68 Stat. 687; Pub. L. 101–550, title IV, § 404, Nov. 15, 1990, 104 Stat. 2722.)

history & why it existsrecord from the source credit

1933Enacted · Act of May 27, 1933, ch. 38 · 53 Stat. 1154
1954Amended · Act of Aug. 10, 1954, ch. 667 · 68 Stat. 687
1990Amended · Pub. L. 101-550 · 104 Stat. 2722

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

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