US (United States) Code. Title 15. Chapter 2A: Securities and trust indentures

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Commerce and Trade

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-CITE-

15 USC CHAPTER 2A - SECURITIES AND TRUST INDENTURES 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

.

-HEAD-

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

-MISC1-

SUBCHAPTER I - DOMESTIC SECURITIES

Sec.

77a. Short title.

77b. Definitions; promotion of efficiency, competition, and capital

formation.

(a) Definitions.

(b) Consideration of promotion of efficiency,

competition, and capital formation.

77b-1. Swap agreements.

(a) Non-security-based swap agreements.

(b) Security-based swap agreements.

77c. Classes of securities under this subchapter.

(a) Exempted securities.

(b) Additional exemptions.

(c) Securities issued by small investment company.

77d. Exempted transactions.

77e. Prohibitions relating to interstate commerce and the mails.

(a) Sale or delivery after sale of unregistered

securities.

(b) Necessity of prospectus meeting requirements of

section 77j of this title.

(c) Necessity of filing registration statement.

77f. Registration of securities.

(a) Method of registration.

(b) Registration fee.

(c) Time registration effective.

(d) Information available to public.

77g. Information required in registration statement.

77h. Taking effect of registration statements and amendments

thereto.

(a) Effective date of registration statement.

(b) Incomplete or inaccurate registration statement.

(c) Effective date of amendment to registration

statement.

(d) Untrue statements or omissions in registration

statement.

(e) Examination for issuance of stop order.

(f) Notice requirements.

77h-1. Cease-and-desist proceedings.

(a) Authority of Commission.

(b) Hearing.

(c) Temporary order.

(d) Review of temporary orders.

(e) Authority to enter order requiring accounting and

disgorgement.

(f) Authority of the Commission to prohibit persons

from serving as officers or directors.

77i. Court review of orders.

77j. Information required in prospectus.

(a) Information in registration statement; documents

not required.

(b) Summarizations and omissions allowed by rules and

regulations.

(c) Additional information required by rules and

regulations.

(d) Classification of prospectuses.

(e) Information in conspicuous part of prospectus.

(f) Prospectus consisting of radio or television

broadcast.

77k. Civil liabilities on account of false registration statement.

(a) Persons possessing cause of action; persons

liable.

(b) Persons exempt from liability upon proof of

issues.

(c) Standard of reasonableness.

(d) Effective date of registration statement with

regard to underwriters.

(e) Measure of damages; undertaking for payment of

costs.

(f) Joint and several liability; liability of outside

director.

(g) Offering price to public as maximum amount

recoverable.

77l. Civil liabilities arising in connection with prospectuses and

communications.

(a) In general.

(b) Loss causation.

77m. Limitation of actions.

77n. Contrary stipulations void.

77o. Liability of controlling persons.

77p. Additional remedies; limitation on remedies.

(a) Remedies additional.

(b) Class action limitations.

(c) Removal of covered class actions.

(d) Preservation of certain actions.

(e) Preservation of State jurisdiction.

(f) Definitions.

77q. Fraudulent interstate transactions.

(a) Use of interstate commerce for purpose of fraud

or deceit.

(b) Use of interstate commerce for purpose of

offering for sale.

(c) Exemptions of section 77c not applicable to this

section.

(d) Authority with respect to security-based swap

agreements.

77r. Exemption from State regulation of securities offerings.

(a) Scope of exemption.

(b) Covered securities.

(c) Preservation of authority.

(d) Definitions.

77r-1. Preemption of State law.

(a) Authority to purchase, hold, and invest in

securities; securities considered as

obligations of United States.

(b) Exception; validity of contracts under prior law.

(c) Registration and qualification requirements;

exemption; subsequent enactment by State.

(d) Implementation.

77s. Special powers of Commission.

(a) Rules and regulations.

(b) Recognition of accounting standards.

(c) Production of evidence.

(d) Federal and State cooperation.

77t. Injunctions and prosecution of offenses.

(a) Investigation of violations.

(b) Action for injunction or criminal prosecution in

district court.

(c) Writ of mandamus.

(d) Money penalties in civil actions.

(e) Authority of court to prohibit persons from

serving as officers and directors.

(f) Prohibition of attorneys' fees paid from

Commission disgorgement funds.

(g) Authority of a court to prohibit persons from

participating in an offering of penny stock.

77u. Hearings by Commission.

77v. Jurisdiction of offenses and suits.

(a) Federal and State courts; venue; service of

process; review; removal; costs.

(b) Contumacy or refusal to obey subpena; contempt.

77w. Unlawful representations.

77x. Penalties.

77y. Jurisdiction of other Government agencies over securities.

77z. Separability.

77z-1. Private securities litigation.

(a) Private class actions.

(b) Stay of discovery; preservation of evidence.

(c) Sanctions for abusive litigation.

(d) Defendant's right to written interrogatories.

77z-2. Application of safe harbor for forward-looking statements.

(a) Applicability.

(b) Exclusions.

(c) Safe harbor.

(d) Duty to update.

(e) Dispositive motion.

(f) Stay pending decision on motion.

(g) Exemption authority.

(h) Effect on other authority of Commission.

(i) Definitions.

77z-3. General exemptive authority.

77aa. Schedule of information required in registration statement.

SUBCHAPTER II - FOREIGN SECURITIES

77bb. ''Corporation of Foreign Security Holders''; creation;

principal office; branch offices.

77cc. Directors of Corporation; appointment, term of office, and

removal.

77dd. Powers and duties of Corporation, generally.

77ee. Directors of Corporation, powers and duties generally.

77ff. Accounts and annual balance sheet of Corporation; audits.

77gg. Annual report by Corporation; printing and distribution.

77hh. Assessments by Corporation on holders of foreign securities.

77ii. Subscriptions accepted by Corporation as loans; repayment.

77jj. Loans to Corporation from Reconstruction Finance Corporation

authorized.

77kk. Representations by Corporation as acting for Department of

State or United States forbidden; interference with foreign

negotiations forbidden.

77ll. Effective date of subchapter.

77mm. Short title.

SUBCHAPTER III - TRUST INDENTURES

77aaa. Short title.

77bbb. Necessity for regulation.

(a) Practices adversely affecting public.

(b) Declaration of policy.

77ccc. Definitions.

77ddd. Exempted securities and transactions.

(a) Specific securities exempted.

(b) Application of sections 77eee and 77fff.

(c) Securities issued or proposed to be issued under

indenture.

(d) Exemptions in public interest.

(e) Securities issued by small investment company.

77eee. Securities required to be registered under Securities Act.

(a) Information required.

(b) Refusal of registration statement.

(c) Information required in prospectus.

(d) Applicability of other statutory provisions.

77fff. Securities not registered under Securities Act.

(a) Prohibitions affecting unregistered securities

not issued under indenture.

(b) Prohibitions affecting unregistered securities

issued under indenture.

(c) Necessity of issuance under indenture;

application for qualification.

77ggg. Qualification of indentures covering securities not required

to be registered.

(a) Application; information required; availability

of information to public.

(b) Filing of application.

(c) Applicability of other statutory provisions.

77hhh. Integration of procedure with Securities Act and other Acts.

(a) Incorporation by reference.

(b) Consolidation of applications, reports, etc.

77iii. Effective time of qualification.

(a) Effective time of registration or application for

qualification of indenture.

(b) Stop orders after effective time of

qualification.

(c) Effect of subsequent rule or regulation on

qualification.

(d) Liability of trustee under qualified indenture.

(e) Power of Commission to conduct investigation.

77jjj. Eligibility and disqualification of trustee.

(a) Persons eligible for appointment as trustee.

(b) Disqualification of trustee.

(c) Applicability of section.

77kkk. Preferential collection of claims against obligor.

(a) Trustee as creditor of obligor.

(b) Exclusion of creditor relationship arising from

specified classes.

(c) Issue or sale of securities by registered holding

company.

77lll. Bondholders' lists.

(a) Periodic filing of information by obligor with

trustee.

(b) Access of information to security holders.

(c) Disclosure of information deemed not violative of

any law.

77mmm. Reports by indenture trustee.

(a) Report to security holders; time; contents.

(b) Additional reports to security holders.

(c) Additional parties to whom reports to be

transmitted.

(d) Filing of report with stock exchanges.

77nnn. Reports by obligor; evidence of compliance with indenture

provisions.

(a) Periodic reports.

(b) Evidence of recording of indenture.

(c) Evidence of compliance with conditions precedent.

(d) Certificates of fair value.

(e) Recitals as to basis of certificate or opinion.

(f) Parties may provide for additional evidence.

77ooo. Duties and responsibility of the trustee.

(a) Duties prior to default.

(b) Notice of defaults.

(c) Duties of the trustee in case of default.

(d) Responsibility of the trustee.

(e) Undertaking for costs.

77ppp. Directions and waivers by bondholders; prohibition of

impairment of holder's right to payment; record date.

(a) Directions and waivers by bondholders.

(b) Prohibition of impairment of holder's right to

payment.

(c) Record date.

77qqq. Special powers of trustee; duties of paying agents.

77rrr. Effect of prescribed indenture provisions.

(a) Imposed duties to control.

(b) Additional provisions.

(c) Provisions governing qualified indentures.

77sss. Rules, regulations, and orders.

(a) Authority of Commission; subject matter of rules,

etc.

(b) Rules and regulations effective upon publication.

(c) Exemption from liability for any acts taken in

good faith in conformity with rules, etc.

77ttt. Hearings by Commission.

77uuu. Special powers of the Commission.

(a) Investigatory powers.

(b) Availability of reports from other offices;

restrictions.

(c) Investigation of prospective trustees.

(d) Appointment and compensation of employees; lease

and allocation of real property.

77vvv. Judicial review.

(a) Review of orders.

(b) Jurisdiction of offenses and suits.

77www. Liability for misleading statements.

77xxx. Unlawful representations.

77yyy. Penalties.

77zzz. Effect on existing law.

77aaaa. Contrary stipulations void.

77bbbb. Separability.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in section 80a-29 of this title.

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15 USC SUBCHAPTER I - DOMESTIC SECURITIES 01/06/03

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TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

.

-HEAD-

SUBCHAPTER I - DOMESTIC SECURITIES

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 77ccc, 77ddd, 77eee,

77fff, 77ggg, 77hhh, 77vvv, 77www, 77zzz, 78c, 78j-1, 78l, 78m,

78n, 78o, 78o-3, 78s, 78u-2, 78bb, 78lll, 79p, 79t, 79u, 80a-2,

80a-8, 80a-9, 80a-14, 80a-24, 80a-34, 80a-37, 80a-49, 80a-54,

80a-56, 80b-2, 80b-3, 631b, 7201 of this title; title 7 sections

1a, 6m, 12a; title 11 section 101; title 12 sections 635i-6, 1441a,

1441b, 1812, 3012; title 23 section 181; title 25 section 646;

title 42 sections 2297h-2, 2297h-7; title 43 section 1625; title 45

section 1342; title 49 section 41762.

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15 USC Sec. 77a 01/06/03

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TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77a. Short title

-STATUTE-

This subchapter may be cited as the ''Securities Act of 1933''.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 1, 48 Stat. 74.)

-MISC1-

SHORT TITLE OF 1980 AMENDMENT

Pub. L. 96-477, title VI, Sec. 601, Oct. 21, 1980, 94 Stat. 2294,

provided that: ''This title (amending sections 77b and 77d of this

title) may be cited as the 'Small Business Issuers' Simplification

Act of 1980'.''

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15 USC Sec. 77b 01/06/03

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TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77b. Definitions; promotion of efficiency, competition, and

capital formation

-STATUTE-

(a) Definitions

When used in this subchapter, unless the context otherwise

requires -

(1) The term ''security'' means any note, stock, treasury

stock, security future, bond, debenture, evidence of

indebtedness, certificate of interest or participation in any

profit-sharing agreement, collateral-trust certificate,

preorganization certificate or subscription, transferable share,

investment contract, voting-trust certificate, certificate of

deposit for a security, fractional undivided interest in oil,

gas, or other mineral rights, any put, call, straddle, option, or

privilege on any security, certificate of deposit, or group or

index of securities (including any interest therein or based on

the value thereof), or any put, call, straddle, option, or

privilege entered into on a national securities exchange relating

to foreign currency, or, in general, any interest or instrument

commonly known as a ''security'', or any certificate of interest

or participation in, temporary or interim certificate for,

receipt for, guarantee of, or warrant or right to subscribe to or

purchase, any of the foregoing.

(2) The term ''person'' means an individual, a corporation, a

partnership, an association, a joint-stock company, a trust, any

unincorporated organization, or a government or political

subdivision thereof. As used in this paragraph the term

''trust'' shall include only a trust where the interest or

interests of the beneficiary or beneficiaries are evidenced by a

security.

(3) The term ''sale'' or ''sell'' shall include every contract

of sale or disposition of a security or interest in a security,

for value. The term ''offer to sell'', ''offer for sale'', or

''offer'' shall include every attempt or offer to dispose of, or

solicitation of an offer to buy, a security or interest in a

security, for value. The terms defined in this paragraph and the

term ''offer to buy'' as used in subsection (c) of section 77e of

this title shall not include preliminary negotiations or

agreements between an issuer (or any person directly or

indirectly controlling or controlled by an issuer, or under

direct or indirect common control with an issuer) and any

underwriter or among underwriters who are or are to be in privity

of contract with an issuer (or any person directly or indirectly

controlling or controlled by an issuer, or under direct or

indirect common control with an issuer). Any security given or

delivered with, or as a bonus on account of, any purchase of

securities or any other thing, shall be conclusively presumed to

constitute a part of the subject of such purchase and to have

been offered and sold for value. The issue or transfer of a

right or privilege, when originally issued or transferred with a

security, giving the holder of such security the right to convert

such security into another security of the same issuer or of

another person, or giving a right to subscribe to another

security of the same issuer or of another person, which right

cannot be exercised until some future date, shall not be deemed

to be an offer or sale of such other security; but the issue or

transfer of such other security upon the exercise of such right

of conversion or subscription shall be deemed a sale of such

other security. Any offer or sale of a security futures product

by or on behalf of the issuer of the securities underlying the

security futures product, an affiliate of the issuer, or an

underwriter, shall constitute a contract for sale of, sale of,

offer for sale, or offer to sell the underlying securities.

(4) The term ''issuer'' means every person who issues or

proposes to issue any security; except that with respect to

certificates of deposit, voting-trust certificates, or

collateral-trust certificates, or with respect to certificates of

interest or shares in an unincorporated investment trust not

having a board of directors (or persons performing similar

functions) or of the fixed, restricted management, or unit type,

the term ''issuer'' means the person or persons performing the

acts and assuming the duties of depositor or manager pursuant to

the provisions of the trust or other agreement or instrument

under which such securities are issued; except that in the case

of an unincorporated association which provides by its articles

for limited liability of any or all of its members, or in the

case of a trust, committee, or other legal entity, the trustees

or members thereof shall not be individually liable as issuers of

any security issued by the association, trust, committee, or

other legal entity; except that with respect to equipment-trust

certificates or like securities, the term ''issuer'' means the

person by whom the equipment or property is or is to be used; and

except that with respect to fractional undivided interests in

oil, gas, or other mineral rights, the term ''issuer'' means the

owner of any such right or of any interest in such right (whether

whole or fractional) who creates fractional interests therein for

the purpose of public offering.

(5) The term ''Commission'' means the Securities and Exchange

Commission.

(6) The term ''Territory'' means Puerto Rico, the Virgin

Islands, and the insular possessions of the United States.

(7) The term ''interstate commerce'' means trade or commerce in

securities or any transportation or communication relating

thereto among the several States or between the District of

Columbia or any Territory of the United States and any State or

other Territory, or between any foreign country and any State,

Territory, or the District of Columbia, or within the District of

Columbia.

(8) The term ''registration statement'' means the statement

provided for in section 77f of this title, and includes any

amendment thereto and any report, document, or memorandum filed

as part of such statement or incorporated therein by reference.

(9) The term ''write'' or ''written'' shall include printed,

lithographed, or any means of graphic communication.

(10) The term ''prospectus'' means any prospectus, notice,

circular, advertisement, letter, or communication, written or by

radio or television, which offers any security for sale or

confirms the sale of any security; except that (a) a

communication sent or given after the effective date of the

registration statement (other than a prospectus permitted under

subsection (b) of section 77j of this title) shall not be deemed

a prospectus if it is proved that prior to or at the same time

with such communication a written prospectus meeting the

requirements of subsection (a) of section 77j of this title at

the time of (FOOTNOTE 1) such communication was sent or given to

the person to whom the communication was made, and (b) a notice,

circular, advertisement, letter, or communication in respect of a

security shall not be deemed to be a prospectus if it states from

whom a written prospectus meeting the requirements of section 77j

of this title may be obtained and, in addition, does no more than

identify the security, state the price thereof, state by whom

orders will be executed, and contain such other information as

the Commission, by rules or regulations deemed necessary or

appropriate in the public interest and for the protection of

investors, and subject to such terms and conditions as may be

prescribed therein, may permit.

(FOOTNOTE 1) So in original.

(11) The term ''underwriter'' means any person who has

purchased from an issuer with a view to, or offers or sells for

an issuer in connection with, the distribution of any security,

or participates or has a direct or indirect participation in any

such undertaking, or participates or has a participation in the

direct or indirect underwriting of any such undertaking; but such

term shall not include a person whose interest is limited to a

commission from an underwriter or dealer not in excess of the

usual and customary distributors' or sellers' commission. As

used in this paragraph the term ''issuer'' shall include, in

addition to an issuer, any person directly or indirectly

controlling or controlled by the issuer, or any person under

direct or indirect common control with the issuer.

(12) The term ''dealer'' means any person who engages either

for all or part of his time, directly or indirectly, as agent,

broker, or principal, in the business of offering, buying,

selling, or otherwise dealing or trading in securities issued by

another person.

(13) The term ''insurance company'' means a company which is

organized as an insurance company, whose primary and predominant

business activity is the writing of insurance or the reinsuring

of risks underwritten by insurance companies, and which is

subject to supervision by the insurance commissioner, or a

similar official or agency, of a State or territory or the

District of Columbia; or any receiver or similar official or any

liquidating agent for such company, in his capacity as such.

(14) The term ''separate account'' means an account established

and maintained by an insurance company pursuant to the laws of

any State or territory of the United States, the District of

Columbia, or of Canada or any province thereof, under which

income, gains and losses, whether or not realized, from assets

allocated to such account, are, in accordance with the applicable

contract, credited to or charged against such account without

regard to other income, gains, or losses of the insurance

company.

(15) The term ''accredited investor'' shall mean -

(i) a bank as defined in section 77c(a)(2) of this title

whether acting in its individual or fiduciary capacity; an

insurance company as defined in paragraph (13) of this

subsection; an investment company registered under the

Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or a

business development company as defined in section 2(a)(48) of

that Act (15 U.S.C. 80a-2(a)(48)); a Small Business Investment

Company licensed by the Small Business Administration; or an

employee benefit plan, including an individual retirement

account, which is subject to the provisions of the Employee

Retirement Income Security Act of 1974 (29 U.S.C. 1001 et

seq.), if the investment decision is made by a plan fiduciary,

as defined in section 3(21) of such Act (29 U.S.C. 1002(21)),

which is either a bank, insurance company, or registered

investment adviser; or

(ii) any person who, on the basis of such factors as

financial sophistication, net worth, knowledge, and experience

in financial matters, or amount of assets under management

qualifies as an accredited investor under rules and regulations

which the Commission shall prescribe.

(16) The terms ''security future'', ''narrow-based security

index'', and ''security futures product'' have the same meanings

as provided in section 78c(a)(55) of this title.

(b) Consideration of promotion of efficiency, competition, and

capital formation

Whenever pursuant to this subchapter the Commission is engaged in

rulemaking and is required to consider or determine whether an

action is necessary or appropriate in the public interest, the

Commission shall also consider, in addition to the protection of

investors, whether the action will promote efficiency, competition,

and capital formation.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 2, 48 Stat. 74; June 6, 1934,

ch. 404, title II, Sec. 201, 48 Stat. 905; Aug. 10, 1954, ch. 667,

title I, Sec. 1-4, 68 Stat. 683, 684; Pub. L. 86-70, Sec. 12(a),

June 25, 1959, 73 Stat. 143; Pub. L. 86-624, Sec. 7(a), July 12,

1960, 74 Stat. 412; Pub. L. 91-547, Sec. 27(a), Dec. 14, 1970, 84

Stat. 1433; Pub. L. 96-477, title VI, Sec. 603, Oct. 21, 1980, 94

Stat. 2294; Pub. L. 97-303, Sec. 1, Oct. 13, 1982, 96 Stat. 1409;

Pub. L. 100-181, title II, Sec. 201, 202, Dec. 4, 1987, 101 Stat.

1252; Pub. L. 104-290, title I, Sec. 106(a), Oct. 11, 1996, 110

Stat. 3424; Pub. L. 105-353, title III, Sec. 301(a)(1), Nov. 3,

1998, 112 Stat. 3235; Pub. L. 106-554, Sec. 1(a)(5) (title II, Sec.

208(a)(1)), Dec. 21, 2000, 114 Stat. 2763, 2763A-434.)

-REFTEXT-

REFERENCES IN TEXT

The Investment Company Act of 1940, referred to in subsec.

(a)(15)(i), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789,

as amended, which is classified generally to subchapter I (Sec.

80a-1 et seq.) of chapter 2D of this title. For complete

classification of this Act to the Code, see section 80a-51 of this

title and Tables.

The Employee Retirement Income Security Act of 1974, referred to

in subsec. (a)(15)(i), is Pub. L. 93-406, Sept. 2, 1974, 88 Stat.

829, as amended, which is classified principally to chapter 18

(Sec. 1001 et seq.) of Title 29, Labor. For complete classification

of this Act to the Code, see Short Title note set out under section

1001 of Title 29 and Tables.

-COD-

CODIFICATION

Words ''Philippine Islands'' deleted from definition of term

''Territory'' under authority of Proc. No. 2695, eff. July 4,

1946, 11 F.R. 7517, 60 Stat. 1352, which granted independence to

the Philippine Islands. Proc. No. 2695 was issued pursuant to

section 1394 of Title 22, Foreign Relations and Intercourse, and is

set out as a note under that section.

-MISC3-

AMENDMENTS

2000 - Subsec. (a)(1). Pub. L. 106-554, Sec. 1(a)(5) (title II,

Sec. 208(a)(1)(A)), inserted ''security future,'' after ''treasury

stock,''.

Subsec. (a)(3). Pub. L. 106-554, Sec. 1(a)(5) (title II, Sec.

208(a)(1)(B)), inserted at end ''Any offer or sale of a security

futures product by or on behalf of the issuer of the securities

underlying the security futures product, an affiliate of the

issuer, or an underwriter, shall constitute a contract for sale of,

sale of, offer for sale, or offer to sell the underlying

securities.''

Subsec. (a)(16). Pub. L. 106-554, Sec. 1(a)(5) (title II, Sec.

208(a)(1)(C)), added par. (16).

1998 - Subsec. (a)(15)(i). Pub. L. 105-353 made technical

amendment to reference in original act which appears in text as

reference to section 77c(a)(2) of this title and inserted ''of this

subsection'' after ''paragraph (13)''.

1996 - Pub. L. 104-290 designated existing provisions as subsec.

(a), inserted heading, and added subsec. (b).

1987 - Par. (5). Pub. L. 100-181, Sec. 201, substituted

''Securities and Exchange Commission'' for ''Federal Trade

Commission''.

Par. (6). Pub. L. 100-181, Sec. 202, struck out reference to

Canal Zone.

1982 - Par. (1). Pub. L. 97-303 inserted ''any put, call,

straddle, option, or privilege on any security, certificate of

deposit, or group or index of securities (including any interest

therein or based on the value thereof), or any put, call, straddle,

option, or privilege entered into on a national securities exchange

relating to foreign currency,'' after ''mineral rights,''.

1980 - Par. (15). Pub. L. 96-477 added par. (15).

1970 - Pars. (13), (14). Pub. L. 91-547 added pars. (13) and

(14).

1960 - Par. (6). Pub. L. 86-624 struck out reference to Hawaii.

1959 - Par. (6). Pub. L. 86-70 struck out reference to Alaska.

1954 - Act Aug. 10, 1954, in pars. (3), (8), (10), and (11),

redefined term ''sale'' so as to distinguish between ''offers'' and

''sales'', clarified definition of ''registration statement'', and

conformed definition of ''prospectus'' to changes made by act Aug.

10, 1954, to sections 77e and 77j of this title.

1934 - Act June 6, 1934, amended pars. (1), (4), and (10).

EFFECTIVE DATE OF 1970 AMENDMENT

Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section

30 of Pub. L. 91-547, set out as a note under section 80a-52 of

this title.

EFFECTIVE DATE OF 1954 AMENDMENT

Section 501 of act Aug. 10, 1954, provided that: ''This Act

(amending this section and sections 77c to 77e, 77j, 77l, 77q, 77v,

77ccc to 77fff, 77xxx, 78k, 78l, 80a-2 and 80a-24 of this title)

shall take effect sixty days after the date of its enactment (Aug.

10, 1954).''

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77b-1, 77r, 77ccc, 77ddd,

78c, 80a-6, 7004 of this title; title 7 sections 1a, 2; title 11

section 1145; title 12 section 1451; title 29 section 1002; title

42 section 12704.

-CITE-

15 USC Sec. 77b-1 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77b-1. Swap agreements

-STATUTE-

(a) Non-security-based swap agreements

The definition of ''security'' in section 77b(a)(1) of this title

does not include any non-security-based swap agreement (as defined

in section 206C of the Gramm-Leach-Bliley Act).

(b) Security-based swap agreements

(1) The definition of ''security'' in section 77b(a)(1) of this

title does not include any security-based swap agreement (as

defined in section 206B of the Gramm-Leach-Bliley Act).

(2) The Commission is prohibited from registering, or requiring,

recommending, or suggesting, the registration under this subchapter

of any security-based swap agreement (as defined in section 206B of

the Gramm-Leach-Bliley Act). If the Commission becomes aware that a

registrant has filed a registration statement with respect to such

a swap agreement, the Commission shall promptly so notify the

registrant. Any such registration statement with respect to such a

swap agreement shall be void and of no force or effect.

(3) The Commission is prohibited from -

(A) promulgating, interpreting, or enforcing rules; or

(B) issuing orders of general applicability;

under this subchapter in a manner that imposes or specifies

reporting or recordkeeping requirements, procedures, or standards

as prophylactic measures against fraud, manipulation, or insider

trading with respect to any security-based swap agreement (as

defined in section 206B of the Gramm-Leach-Bliley Act).

(4) References in this subchapter to the ''purchase'' or ''sale''

of a security-based swap agreement shall be deemed to mean the

execution, termination (prior to its scheduled maturity date),

assignment, exchange, or similar transfer or conveyance of, or

extinguishing of rights or obligations under, a security-based swap

agreement (as defined in section 206B of the Gramm-Leach-Bliley

Act), as the context may require.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 2A, as added Pub. L. 106-554,

Sec. 1(a)(5) (title III, Sec. 302(a)), Dec. 21, 2000, 114 Stat.

2763, 2763A-451.)

-REFTEXT-

REFERENCES IN TEXT

Sections 206B and 206C of the Gramm-Leach-Bliley Act, referred to

in text, are sections 206B and 206C of Pub. L. 106-102 which are

set out in a note under section 78c of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 77q of this title.

-CITE-

15 USC Sec. 77c 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77c. Classes of securities under this subchapter

-STATUTE-

(a) Exempted securities

Except as hereinafter expressly provided, the provisions of this

subchapter shall not apply to any of the following classes of

securities:

(1) Reserved.

(2) Any security issued or guaranteed by the United States or

any territory thereof, or by the District of Columbia, or by any

State of the United States, or by any political subdivision of a

State or territory, or by any public instrumentality of one or

more States or territories, or by any person controlled or

supervised by and acting as an instrumentality of the Government

of the United States pursuant to authority granted by the

Congress of the United States; or any certificate of deposit for

any of the foregoing; or any security issued or guaranteed by any

bank; or any security issued by or representing an interest in or

a direct obligation of a Federal Reserve bank; or any interest or

participation in any common trust fund or similar fund that is

excluded from the definition of the term ''investment company''

under section 3(c)(3) of the Investment Company Act of 1940 (15

U.S.C. 80a-3(c)(3)); or any security which is an industrial

development bond (as defined in section 103(c)(2) (FOOTNOTE 1) of

title 26) the interest on which is excludable from gross income

under section 103(a)(1) (FOOTNOTE 1) of title 26 if, by reason of

the application of paragraph (4) or (6) of section 103(c)

(FOOTNOTE 1) of title 26 (determined as if paragraphs (4)(A),

(5), and (7) were not included in such section 103(c)), (FOOTNOTE

1) paragraph (1) of such section 103(c) (FOOTNOTE 1) does not

apply to such security; or any interest or participation in a

single trust fund, or in a collective trust fund maintained by a

bank, or any security arising out of a contract issued by an

insurance company, which interest, participation, or security is

issued in connection with (A) a stock bonus, pension, or

profit-sharing plan which meets the requirements for

qualification under section 401 of title 26, (B) an annuity plan

which meets the requirements for the deduction of the employer's

contributions under section 404(a)(2) of title 26, or (C) a

governmental plan as defined in section 414(d) of title 26 which

has been established by an employer for the exclusive benefit of

its employees or their beneficiaries for the purpose of

distributing to such employees or their beneficiaries the corpus

and income of the funds accumulated under such plan, if under

such plan it is impossible, prior to the satisfaction of all

liabilities with respect to such employees and their

beneficiaries, for any part of the corpus or income to be used

for, or diverted to, purposes other than the exclusive benefit of

such employees or their beneficiaries, other than any plan

described in clause (A), (B), or (C) of this paragraph (i) the

contributions under which are held in a single trust fund or in a

separate account maintained by an insurance company for a single

employer and under which an amount in excess of the employer's

contribution is allocated to the purchase of securities (other

than interests or participations in the trust or separate account

itself) issued by the employer or any company directly or

indirectly controlling, controlled by, or under common control

with the employer, (ii) which covers employees some or all of

whom are employees within the meaning of section 401(c)(1) of

title 26, or (iii) which is a plan funded by an annuity contract

described in section 403(b) of title 26. The Commission, by rules

and regulations or order, shall exempt from the provisions of

section 77e of this title any interest or participation issued in

connection with a stock bonus, pension, profit-sharing, or

annuity plan which covers employees some or all of whom are

employees within the meaning of section 401(c)(1) of title 26, if

and to the extent that the Commission determines this to be

necessary or appropriate in the public interest and consistent

with the protection of investors and the purposes fairly intended

by the policy and provisions of this subchapter. For purposes of

this paragraph, a security issued or guaranteed by a bank shall

not include any interest or participation in any collective trust

fund maintained by a bank; and the term ''bank'' means any

national bank, or banking institution organized under the laws of

any State, territory, or the District of Columbia, the business

of which is substantially confined to banking and is supervised

by the State or territorial banking commission or similar

official; except that in the case of a common trust fund or

similar fund, or a collective trust fund, the term ''bank'' has

the same meaning as in the Investment Company Act of 1940 (15

U.S.C. 80a-1 et seq.);

(FOOTNOTE 1) See References in Text note below.

(3) Any note, draft, bill of exchange, or banker's acceptance

which arises out of a current transaction or the proceeds of

which have been or are to be used for current transactions, and

which has a maturity at the time of issuance of not exceeding

nine months, exclusive of days of grace, or any renewal thereof

the maturity of which is likewise limited;

(4) Any security issued by a person organized and operated

exclusively for religious, educational, benevolent, fraternal,

charitable, or reformatory purposes and not for pecuniary profit,

and no part of the net earnings of which inures to the benefit of

any person, private stockholder, or individual; or any security

of a fund that is excluded from the definition of an investment

company under section 3(c)(10)(B) of the Investment Company Act

of 1940 (15 U.S.C. 80a-3(c)(10)(B));

(5) Any security issued (A) by a savings and loan association,

building and loan association, cooperative bank, homestead

association, or similar institution, which is supervised and

examined by State or Federal authority having supervision over

any such institution; or (B) by (i) a farmer's cooperative

organization exempt from tax under section 521 of title 26, (ii)

a corporation described in section 501(c)(16) of title 26 and

exempt from tax under section 501(a) of title 26, or (iii) a

corporation described in section 501(c)(2) of title 26 which is

exempt from tax under section 501(a) of title 26 and is organized

for the exclusive purpose of holding title to property,

collecting income therefrom, and turning over the entire amount

thereof, less expenses, to an organization or corporation

described in clause (i) or (ii);

(6) Any interest in a railroad equipment trust. For purposes

of this paragraph ''interest in a railroad equipment trust''

means any interest in an equipment trust, lease, conditional

sales contract, or other similar arrangement entered into,

issued, assumed, guaranteed by, or for the benefit of, a common

carrier to finance the acquisition of rolling stock, including

motive power;

(7) Certificates issued by a receiver or by a trustee or debtor

in possession in a case under title 11, with the approval of the

court;

(8) Any insurance or endowment policy or annuity contract or

optional annuity contract, issued by a corporation subject to the

supervision of the insurance commissioner, bank commissioner, or

any agency or officer performing like functions, of any State or

Territory of the United States or the District of Columbia;

(9) Except with respect to a security exchanged in a case under

title 11, any security exchanged by the issuer with its existing

security holders exclusively where no commission or other

remuneration is paid or given directly or indirectly for

soliciting such exchange;

(10) Except with respect to a security exchanged in a case

under title 11, any security which is issued in exchange for one

or more bona fide outstanding securities, claims or property

interests, or partly in such exchange and partly for cash, where

the terms and conditions of such issuance and exchange are

approved, after a hearing upon the fairness of such terms and

conditions at which all persons to whom it is proposed to issue

securities in such exchange shall have the right to appear, by

any court, or by any official or agency of the United States, or

by any State or Territorial banking or insurance commission or

other governmental authority expressly authorized by law to grant

such approval;

(11) Any security which is a part of an issue offered and sold

only to persons resident within a single State or Territory,

where the issuer of such security is a person resident and doing

business within or, if a corporation, incorporated by and doing

business within, such State or Territory.

(12) Any equity security issued in connection with the

acquisition by a holding company of a bank under section 1842(a)

of title 12 or a savings association under section 1467a(e) of

title 12, if -

(A) the acquisition occurs solely as part of a reorganization

in which security holders exchange their shares of a bank or

savings association for shares of a newly formed holding

company with no significant assets other than securities of the

bank or savings association and the existing subsidiaries of

the bank or savings association;

(B) the security holders receive, after that reorganization,

substantially the same proportional share interests in the

holding company as they held in the bank or savings

association, except for nominal changes in shareholders'

interests resulting from lawful elimination of fractional

interests and the exercise of dissenting shareholders' rights

under State or Federal law;

(C) the rights and interests of security holders in the

holding company are substantially the same as those in the bank

or savings association prior to the transaction, other than as

may be required by law; and

(D) the holding company has substantially the same assets and

liabilities, on a consolidated basis, as the bank or savings

association had prior to the transaction.

For purposes of this paragraph, the term ''savings association''

means a savings association (as defined in section 1813(b) of

title 12) the deposits of which are insured by the Federal

Deposit Insurance Corporation.

(13) Any security issued by or any interest or participation in

any church plan, company or account that is excluded from the

definition of an investment company under section 3(c)(14) of the

Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(14)).

(14) Any security futures product that is -

(A) cleared by a clearing agency registered under section

78q-1 of this title or exempt from registration under

subsection (b)(7) of such section 78q-1; and

(B) traded on a national securities exchange or a national

securities association registered pursuant to section 78o-3(a)

of this title.

(b) Additional exemptions

The Commission may from time to time by its rules and

regulations, and subject to such terms and conditions as may be

prescribed therein, add any class of securities to the securities

exempted as provided in this section, if it finds that the

enforcement of this subchapter with respect to such securities is

not necessary in the public interest and for the protection of

investors by reason of the small amount involved or the limited

character of the public offering; but no issue of securities shall

be exempted under this subsection where the aggregate amount at

which such issue is offered to the public exceeds $5,000,000.

(c) Securities issued by small investment company

The Commission may from time to time by its rules and regulations

and subject to such terms and conditions as may be prescribed

therein, add to the securities exempted as provided in this section

any class of securities issued by a small business investment

company under the Small Business Investment Act of 1958 (15 U.S.C.

661 et seq.) if it finds, having regard to the purposes of that

Act, that the enforcement of this subchapter with respect to such

securities is not necessary in the public interest and for the

protection of investors.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 3, 48 Stat. 75; June 6, 1934,

ch. 404, title II, Sec. 202, 48 Stat. 906; Feb. 4, 1887, ch. 104,

title II, Sec. 214, as added Aug. 9, 1935, ch. 498, 49 Stat. 557;

amended June 29, 1938, ch. 811, Sec. 15, 52 Stat. 1240; May 15,

1945, ch. 122, 59 Stat. 167; Aug. 10, 1954, ch. 667, title I, Sec.

5, 68 Stat. 684; Pub. L. 85-699, title III, Sec. 307(a), Aug. 21,

1958, 72 Stat. 694; Pub. L. 91-373, title IV, Sec. 401(a), Aug. 10,

1970, 84 Stat. 718; Pub. L. 91-547, Sec. 27(b), (c), Dec. 14, 1970,

84 Stat. 1434; Pub. L. 91-565, Dec. 19, 1970, 84 Stat. 1480; Pub.

L. 91-567, Sec. 6(a), Dec. 22, 1970, 84 Stat. 1498; Pub. L. 94-210,

title III, Sec. 308(a)(1), (3), Feb. 5, 1976, 90 Stat. 56, 57; Pub.

L. 95-283, Sec. 18, May 21, 1978, 92 Stat. 275; Pub. L. 95-425,

Sec. 2, Oct. 6, 1978, 92 Stat. 962; Pub. L. 95-598, title III, Sec.

306, Nov. 6, 1978, 92 Stat. 2674; Pub. L. 96-477, title III, Sec.

301, title VII, Sec. 701, Oct. 21, 1980, 94 Stat. 2291, 2294; Pub.

L. 97-261, Sec. 19(d), Sept. 20, 1982, 96 Stat. 1121; Pub. L.

99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 100-181,

title II, Sec. 203, 204, Dec. 4, 1987, 101 Stat. 1252; Pub. L.

103-325, title III, Sec. 320, Sept. 23, 1994, 108 Stat. 2225; Pub.

L. 104-62, Sec. 3, Dec. 8, 1995, 109 Stat. 684; Pub. L. 104-290,

title V, Sec. 508(b), Oct. 11, 1996, 110 Stat. 3447; Pub. L.

106-102, title II, Sec. 221(a), Nov. 12, 1999, 113 Stat. 1401; Pub.

L. 106-554, Sec. 1(a)(5) (title II, Sec. 208(a)(2)), Dec. 21, 2000,

114 Stat. 2763, 2763A-435.)

-REFTEXT-

REFERENCES IN TEXT

Section 103 of title 26, referred to in subsec. (a)(2), which

related to interest on certain governmental obligations was amended

generally by Pub. L. 99-514, title XIII, Sec. 1301(a), Oct. 22,

1986, 100 Stat. 2602, and as so amended relates to interest on

State and local bonds. Section 103(b)(2) (formerly section

103(c)(2)), which prior to the general amendment defined industrial

development bond, relates to the applicability of the interest

exclusion to arbitrage bonds.

The Investment Company Act of 1940, referred to in subsec.

(a)(2), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, as

amended, which is classified generally to subchapter I (Sec. 80a-1

et seq.) of chapter 2D of this title. For complete classification

of this Act to the Code, see section 80a-51 of this title and

Tables.

The Small Business Investment Act of 1958, referred to in subsec.

(c), is Pub. L. 85-699, Aug. 21, 1958, 72 Stat. 689, as amended,

which is classified principally to chapter 14B (Sec. 661 et seq.)

of this title. For complete classification of this Act to the

Code, see Short Title note set out under section 661 of this title

and Tables.

-MISC2-

AMENDMENTS

2000 - Subsec. (a)(14). Pub. L. 106-554 added par. (14).

1999 - Subsec. (a)(2). Pub. L. 106-102 substituted ''or any

interest or participation in any common trust fund or similar fund

that is excluded from the definition of the term 'investment

company' under section 3(c)(3) of the Investment Company Act of

1940'' for ''or any interest or participation in any common trust

fund or similar fund maintained by a bank exclusively for the

collective investment and reinvestment of assets contributed

thereto by such bank in its capacity as trustee, executor,

administrator, or guardian''.

1996 - Subsec. (a)(13). Pub. L. 104-290 added par. (13).

1995 - Subsec. (a)(4). Pub. L. 104-62 inserted at end ''or any

security of a fund that is excluded from the definition of an

investment company under section 3(c)(10)(B) of the Investment

Company Act of 1940;''.

1994 - Subsec. (a)(12). Pub. L. 103-325 added par. (12).

1987 - Subsec. (a)(1). Pub. L. 100-181, Sec. 203, substituted

''Reserved.'' for ''Any security which, prior to or within sixty

days after May 27, 1933, has been sold or disposed of by the issuer

or bona fide offered to the public, but this exemption shall not

apply to any new offering of any such security by an issuer or

underwriter subsequent to such sixty days;''.

Subsec. (a)(5)(A). Pub. L. 100-181, Sec. 204, struck out '',

except that the foregoing exemption shall not apply with respect to

any such security where the issuer takes from the total amount paid

or deposited by the purchaser, by way of any fee, cash value or

other device whatsoever, either upon termination of the investment

at maturity or before maturity, an aggregate amount in excess of 3

per centum of the face value of such security'' after ''any such

institution''.

1986 - Subsec. (a)(2), (5). Pub. L. 99-514 substituted ''Internal

Revenue Code of 1986'' for ''Internal Revenue Code of 1954''

wherever appearing, which for purposes of codification was

translated as ''title 26'' thus requiring no change in text.

1982 - Subsec. (a)(6). Pub. L. 97-261 struck out provisions

relating to any security issued by a motor carrier subject to

provisions of section 314 (11302) of title 49.

1980 - Subsec. (a)(2). Pub. L. 96-477, Sec. 701, provided that

single trust funds did not have to be maintained by banks in order

to qualify for exemption from the provisions of this subchapter,

substituted provisions relating to securities arising out of

contracts issued by insurance companies for provisions relating to

separate accounts maintained by insurance companies, provided that

an interest, participation, or security could be issued in

connection with certain governmental plans as defined in section

414(d) of title 26 and qualify for exemption from the provisions of

this subchapter, and excluded from exemption plans described in

cls. (A), (B), or (C) of par. (2) which were funded by annuity

contracts described in section 403(b) of title 26.

Subsec. (b). Pub. L. 96-477, Sec. 301, substituted ''$5,000,000''

for ''$2,000,000''.

1978 - Subsec. (a)(7). Pub. L. 95-598, Sec. 306(a), substituted

''or debtor in possession in a case under title 11'' for ''in

bankruptcy''.

Subsec. (a)(9), (10). Pub. L. 95-598, Sec. 306(b), substituted

''Except with respect to a security exchanged in a case under title

11, any'' for ''Any''.

Subsec. (b). Pub. L. 95-425 substituted ''$2,000,000'' for

''$1,500,000''.

Pub. L. 95-283 substituted ''$1,500,000'' for ''$500,000''.

1976 - Subsec. (a)(6). Pub. L. 94-210 substituted provisions

relating to any security issued by a motor carrier subject to the

provisions of section 314 of title 49 or any interest in a railroad

equipment trust, and provisions defining ''interest in a railroad

equipment trust'', for provisions relating to any security issued

by a common or contract carrier, subject to the provisions of

section 20a of title 49.

1970 - Subsec. (a)(2). Pub. L. 91-567 exempted any interest or

participation in any common trust fund or similar fund maintained

by a bank exclusively for the collective investment and

reinvestment of assets contributed thereto by such bank in its

capacity as trustee, executor, administrator, or guardian, any

security which is an industrial development bond the interest on

which is excludable from gross income under section 103(a)(1) of

title 26, any interest or participation in a single or collective

trust fund maintained by a bank or in a separate account maintained

by an insurance company which interest or participation is issued

in connection with a stock bonus, pension, or profit-sharing plan

which meets the requirements for qualification under section 401 of

title 26, or an annuity plan which meets the requirements for the

deduction of the employer's contribution under section 404(a)(2) of

title 26, directed the Commission to exempt from the provisions of

section 77e of this title any interest or participation issued in

connection with a stock bonus, pension, profit-sharing, or annuity

plan which covers employees some or all of whom are employees

within the meaning of section 401(c)(1) of title 26 if and to the

extent that the Commission determines this to be necessary or

appropriate in the public interest and consistent with the

protection of investors, and provided that for the purposes of this

paragraph a security issued or guaranteed by a bank shall not

include any interest or participation in any collective trust fund

maintained by a bank, and that in the case of a common trust fund

or similar fund, or a collective trust fund, the term ''bank'' has

the same meaning as in the Investment Company Act of 1940.

Pub. L. 91-547, Sec. 27(b), struck out reference to industrial

development bonds the interest on which is excludable from gross

income under section 103(a)(1) of title 26; and exempted from

registration provisions interests or participations in common trust

funds maintained by a bank for collective investment of assets held

by it in a fiduciary capacity interests or participations in bank

collective trust funds maintained for funding of employees' stock

bonus, pension, or profit-sharing plans; interests or

participations in separate accounts maintained by insurance

companies for funding certain stock-bonus, pension, or

profit-sharing plans which meet the requirements for qualification

under section 401 of title 26; and interests or participations

issued by bank collective trust funds or insurance company separate

accounts for funding certain stock-bonus, pension, profit-sharing,

or annuity plans when the Commission by rule, regulation, or order

determines this to be necessary in the public interest; provided

that a security issued or guaranteed by a bank shall not include

any interest or participation in any collective trust fund

maintained by a bank; substituted where first appearing ''security

issued or guaranteed by any bank'' for ''security issued or

guaranteed by any national bank, or by any banking institution

organized under the laws of any State or Territory or the District

of Columbia, the business of which is substantially confined to

banking and is supervised by the State or Territorial banking

commission or similar official'', the latter provision now

incorporated in a separate definition of term ''bank''; and made

the Investment Company Act definition of bank applicable as in the

case of a common trust fund or similar fund, or a collective trust

fund.

Pub. L. 91-373 inserted reference to industrial development bonds

the interest on which is excludable from gross income under section

103(a)(1) of title 26.

Subsec. (a)(5). Pub. L. 91-547, Sec. 27(c), designated existing

provisions as cl. (A), included cooperative bank issues, required

the issuer to be an institution which is supervised and examined by

State or Federal authority having supervision over such

institution, struck out ''substantially all the business of which

is confined to the making of loans to members'' after ''similar

institution'' and substituted provisions designated as cl. (B) for

prior provision relating to a security issued by a farmers'

cooperative association as defined in paragraphs (12), (13), and

(14) of section 103 of the Revenue Act of 1932.

Subsec. (b). Pub. L. 91-565 substituted ''$500,000'' for

''$300,000''.

1958 - Subsec. (c). Pub. L. 85-699 added subsec. (c).

1954 - Subsec. (a)(11). Act Aug. 10, 1954, inserted ''offered

and'' before ''sold''.

1945 - Subsec. (b). Act May 15, 1945, substituted ''$300,000''

for ''$100,000''.

1938 - Subsec. (a)(6). Act June 29, 1938, reenacted par. (6)

without change.

1935 - Subsec. (a)(6). Act Feb. 4, 1887, as added by act Aug. 9,

1935, included a security issued by a contract carrier.

1934 - Subsec. (a). Act June 6, 1934, amended pars. (2), (4), and

(8) and added pars. (9) to (11).

EFFECTIVE DATE OF 1999 AMENDMENT

Pub. L. 106-102, title II, Sec. 225, Nov. 12, 1999, 113 Stat.

1402, provided that: ''This subtitle (subtitle B (Sec. 211-225) of

title II of Pub. L. 106-102, enacting section 80b-10a of this title

and amending this section and sections 78c, 80a-2, 80a-3, 80a-9,

80a-10, 80a-17, 80a-26, 80a-34, and 80b-2 of this title) shall take

effect 18 months after the date of the enactment of this Act (Nov.

12, 1999).''

EFFECTIVE DATE OF 1995 AMENDMENT

Section 7 of Pub. L. 104-62 provided that: ''This Act (enacting

section 80a-3a of this title, amending this section and sections

78c, 78l, 80a-3, 80a-7, and 80b-3 of this title, and enacting

provisions set out as a note under section 80a-51 of this title)

and the amendments made by this Act shall apply in all

administrative and judicial actions pending on or commenced after

the date of enactment of this Act (Dec. 8, 1995), as a defense to

any claim that any person, security, interest, or participation of

the type described in this Act and the amendments made by this Act

is subject to the provisions of the Securities Act of 1933 (15

U.S.C. 77a et seq.), the Securities Exchange Act of 1934 (15 U.S.C.

78a et seq.), the Investment Company Act of 1940 (15 U.S.C. 80a-1

et seq.), or the Investment Advisers Act of 1940 (15 U.S.C. 80b-1

et seq.), or any State statute or regulation preempted as provided

in section 6 of this Act (enacting section 80a-3a of this title),

except as otherwise specifically provided in such Acts or State

law.''

EFFECTIVE DATE OF 1982 AMENDMENT

Section 31 of Pub. L. 97-261 provided that:

''(a) Except as provided in subsections (b) and (c) of this

section, this Act (see Tables for classification) shall take effect

on the 60th day after the date of enactment of this Act (Sept. 20,

1982).

''(b) The amendment made by section 10(e)(4) of this Act

(amending provisions set out as a note under former section 10706

of Title 49, Transportation) shall take effect on October 1, 1982.

''(c) The provisions of sections 6(g) and 30 of this Act

(amending former sections 10922 and 10525 of Title 49,

respectively) shall take effect on the date of enactment of this

Act (Sept. 20, 1982).''

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-598 effective Oct. 1, 1979, see section

402(a) of Pub. L. 95-598 set out as an Effective Date note

preceding section 101 of Title 11, Bankruptcy.

EFFECTIVE DATE OF 1976 AMENDMENT

Section 308(d)(1) of Pub. L. 94-210 provided that: ''The

amendments made by subsection (a) of this section (amending this

section, section 77s of this title, and section 314 of former Title

49, Transportation) shall take effect on the 60th day after the

date of enactment of this Act (Feb. 5, 1976), but shall not apply

to any bona fide offering of a security made by the issuer, or by

or through an underwriter, before such 60th day.''

EFFECTIVE DATE OF 1970 AMENDMENTS

Section 6(d) of Pub. L. 91-567 provided that: ''The amendments

made by this section (amending this section and sections 77ddd and

78c of this title) shall apply with respect to securities sold

after January 1, 1970.''

Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section

30 of Pub. L. 91-547, set out as a note under section 80a-52 of

this title.

Section 401(c) of Pub. L. 91-373 provided that: ''The amendments

made by this section (amending this section and section 78c of this

title) shall apply with respect to securities sold after January 1,

1970.''

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

REPEALS

Section 214 of act Feb. 4, 1887 (the Interstate Commerce Act), as

added Aug. 9, 1935, ch. 498, 49 Stat. 557, cited as a credit to

this section, was repealed by Pub. L. 97-449, Sec. 7(b), Jan. 12,

1983, 96 Stat. 2443, 2444.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-MISC5-

SECURITIES AND INVESTMENT COMPANY PROVISIONS INAPPLICABLE TO

CERTAIN LIFE INSURANCE BENEFITS ISSUED PRIOR TO MARCH 23, 1959

Section 29 of Pub. L. 91-547 provided that: ''The provisions of

the Securities Act of 1933 (this subchapter) and the Investment

Company Act of 1940 (section 80a-1 et seq. of this title) shall not

apply, except for purposes of definition of terms used in this

section, to any interest or participation (including any separate

account or other fund providing for the sharing of income or gains

and losses, and any interest or participation in such account or

fund) in any contract, certificate, or policy providing for life

insurance benefits which was issued prior to March 23, 1959, by an

insurance company, if (1) the form of such contract, certificate,

or policy was approved by the insurance commissioner, or similar

official or agency, of a State, territory or the District of

Columbia, and (2) under such contract, certificate, or policy not

to exceed 49 per centum of the gross premiums or other

consideration paid was to be allocated to a separate account or

other fund providing for the sharing of income or gains and

losses. Nothing herein contained shall be taken to imply that any

such interest or participation constitutes a 'security' under any

other laws of the United States.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77b, 77d, 77l, 77q, 77r,

77ddd, 78c, 78o-3, 80a-3, 80a-24 of this title; title 7 section 2;

title 11 section 101; title 12 sections 1813, 2279aa-12, 2290;

title 22 sections 282k, 283h, 283ii, 285h, 286k-1, 290i-9, 290l-7,

290m, 290o-7; title 25 section 646.

-CITE-

15 USC Sec. 77d 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77d. Exempted transactions

-STATUTE-

The provisions of section 77e of this title shall not apply to -

(1) transactions by any person other than an issuer,

underwriter, or dealer.

(2) transactions by an issuer not involving any public

offering.

(3) transactions by a dealer (including an underwriter no

longer acting as an underwriter in respect of the security

involved in such transaction), except -

(A) 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,

(B) 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

(C) 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.

(4) brokers' transactions executed upon customers' orders on

any exchange or in the over-the-counter market but not the

solicitation of such orders.

(5)(A) Transactions (FOOTNOTE 1) 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 participation

interests in such notes -

(FOOTNOTE 1) So in original. Probably should not be

capitalized.

(i) where such securities are originated by a savings and

loan association, savings bank, commercial bank, or similar

banking institution which is supervised and examined by a

Federal or State authority, and are offered and sold subject to

the following conditions:

(a) the minimum aggregate sales price per purchaser shall

not be less than $250,000;

(b) the purchaser shall pay cash either at the time of the

sale or within sixty days thereof; and

(c) each purchaser shall buy for his own account only; or

(ii) where such securities are originated by a mortgagee

approved by the Secretary of Housing and Urban Development

pursuant to sections 1709 and 1715b of title 12 and are offered

or sold subject to the three conditions specified in

subparagraph (A)(i) to any institution described in such

subparagraph or to any insurance company subject to the

supervision of the insurance commissioner, or any agency or

officer performing like function, of any State or territory of

the United States or the District of Columbia, or the Federal

Home Loan Mortgage Corporation, the Federal National Mortgage

Association, or the Government National Mortgage Association.

(B) Transactions (FOOTNOTE 1) between any of the entities

described in subparagraph (A)(i) or (A)(ii) involving

non-assignable contracts to buy or sell the foregoing securities

which are to be completed within two years, where the seller of

the foregoing securities pursuant to any such contract is one of

the parties described in subparagraph (A)(i) or (A)(ii) who may

originate such securities and the purchaser of such securities

pursuant to any such contract is any institution described in

subparagraph (A)(i) or any insurance company described in

subparagraph (A)(ii), the Federal Home Loan Mortgage Corporation,

Federal National Mortgage Association, or the Government National

Mortgage Association and where the foregoing securities are

subject to the three conditions for sale set forth in

subparagraphs (A)(i)(a) through (c).

(C) The (FOOTNOTE 1) exemption provided by subparagraphs (A)

and (B) shall not apply to resales of the securities acquired

pursuant thereto, unless each of the conditions for sale

contained in subparagraphs (A)(i)(a) through (c) are satisfied.

(6) 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)

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.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 4, 48 Stat. 77; June 6, 1934,

ch. 404, title II, Sec. 203, 48 Stat. 906; Aug. 10, 1954, ch. 667,

title I, Sec. 6, 68 Stat. 684; Pub. L. 88-467, Sec. 12, Aug. 20,

1964, 78 Stat. 580; Pub. L. 94-29, Sec. 30, June 4, 1975, 89 Stat.

169; Pub. L. 96-477, title VI, Sec. 602, Oct. 21, 1980, 94 Stat.

2294.)

-MISC1-

AMENDMENTS

1980 - Par. (6). Pub. L. 96-477 added par. (6).

1975 - Par. (5). Pub. L. 94-29 added par. (5).

1964 - Pub. L. 88-467 substituted ''shall not apply to - '' for

''shall not apply to any of the following transactions:'' in

introductory text.

Par. (1). Pub. 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). Pub. L. 88-467 redesignated existing second provision

of par. (1) as (2). Former par. (2) redesignated (4).

Par. (3). Pub. 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). Pub. 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.

EFFECTIVE DATE OF 1975 AMENDMENT

Amendment by Pub. L. 94-29 effective June 4, 1975, see section

31(a) of Pub. L. 94-29, set out as a note under section 78b of this

title.

EFFECTIVE DATE OF 1964 AMENDMENT

Amendment by Pub. L. 88-467 effective Aug. 20, 1964, see section

13 of Pub. L. 88-467, set out as a note under section 78c of this

title.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77p, 77r, 77r-1, 78c,

78o-3, 78bb, 80a-24 of this title; title 12 sections 24, 1464,

1757; title 26 section 67.

-CITE-

15 USC Sec. 77e 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77e. Prohibitions relating to interstate commerce and the

mails

-STATUTE-

(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.

(c) Necessity of filing registration statement

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.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 5, 48 Stat. 77; June 6, 1934,

ch. 404, title II, Sec. 204, 48 Stat. 906; Aug. 10, 1954, ch. 667,

title I, Sec. 7, 68 Stat. 684.)

-MISC1-

AMENDMENTS

1954 - Subsec. (a)(1). Act Aug. 10, 1954, struck out ''or offer

to buy'' after ''to sell''.

Subsec. (b). Act Aug. 10, 1954, in par. (1) substituted ''with

respect to which a registration statement has been filed'' for

''registered'' and in par. (2) omitted ''to'' after ''to carry or''

and inserted ''subsection (a) of'' before ''section 77j of this

title''.

Subsec. (c). Act Aug. 10, 1954, added subsec. (c).

1934 - Act June 6, 1934, repealed subsec. (c), the provisions of

which were replaced by section 77c(a)(11) of this title.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

INCREASED ACCESS TO FOREIGN BUSINESS INFORMATION

Pub. L. 104-290, title I, Sec. 109, Oct. 11, 1996, 110 Stat.

3426, provided that: ''Not later than 1 year after the date of

enactment of this Act (Oct. 11, 1996), the Commission shall adopt

rules under the Securities Act of 1933 (15 U.S.C. 77a et seq.)

concerning the status under the registration provisions of the

Securities Act of 1933 of foreign press conferences and foreign

press releases by persons engaged in the offer and sale of

securities.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77b, 77c, 77d, 77j, 77l,

77ddd, 80a-3, 80a-24, 3904 of this title; title 11 sections 364,

1129, 1145; title 42 section 9675; title 45 section 791.

-CITE-

15 USC Sec. 77f 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77f. Registration of securities

-STATUTE-

(a) Method of registration

Any security may be registered with the Commission under the

terms and conditions hereinafter provided, by filing a registration

statement in triplicate, at least one of which shall be signed by

each issuer, its principal executive officer or officers, its

principal financial officer, its comptroller or principal

accounting officer, and the majority of its board of directors or

persons performing similar functions (or, if there is no board of

directors or persons performing similar functions, by the majority

of the persons or board having the power of management of the

issuer), and in case the issuer is a foreign or Territorial person

by its duly authorized representative in the United States; except

that when such registration statement relates to a security issued

by a foreign government, or political subdivision thereof, it need

be signed only by the underwriter of such security. Signatures of

all such persons when written on the said registration statements

shall be presumed to have been so written by authority of the

person whose signature is so affixed and the burden of proof, in

the event such authority shall be denied, shall be upon the party

denying the same. The affixing of any signature without the

authority of the purported signer shall constitute a violation of

this subchapter. A registration statement shall be deemed

effective only as to the securities specified therein as proposed

to be offered.

(b) Registration fee

(1) Recovery of cost of services

The Commission shall, in accordance with this subsection,

collect registration fees that are designed to recover the costs

to the government of the securities registration process, and

costs related to such process, including enforcement activities,

policy and rulemaking activities, administration, legal services,

and international regulatory activities.

(2) Fee payment required

At the time of filing a registration statement, the applicant

shall pay to the Commission a fee at a rate that shall be equal

to $92 per $1,000,000 of the maximum aggregate price at which

such securities are proposed to be offered, except that during

fiscal year 2003 and any succeeding fiscal year such fee shall be

adjusted pursuant to paragraph (5) or (6).

(3) Offsetting collections

Fees collected pursuant to this subsection for any fiscal year

-

(A) shall be deposited and credited as offsetting collections

to the account providing appropriations to the Commission; and

(B) except as provided in paragraph (9), shall not be

collected for any fiscal year except to the extent provided in

advance in appropriation Acts.

(4) General revenues prohibited

No fees collected pursuant to this subsection for fiscal year

2002 or any succeeding fiscal year shall be deposited and

credited as general revenue of the Treasury.

(5) Annual adjustment

For each of the fiscal years 2003 through 2011, the Commission

shall by order adjust the rate required by paragraph (2) for such

fiscal year to a rate that, when applied to the baseline estimate

of the aggregate maximum offering prices for such fiscal year, is

reasonably likely to produce aggregate fee collections under this

subsection that are equal to the target offsetting collection

amount for such fiscal year.

(6) Final rate adjustment

For fiscal year 2012 and all of the succeeding fiscal years,

the Commission shall by order adjust the rate required by

paragraph (2) for all of such fiscal years to a rate that, when

applied to the baseline estimate of the aggregate maximum

offering prices for fiscal year 2012, is reasonably likely to

produce aggregate fee collections under this subsection in fiscal

year 2012 equal to the target offsetting collection amount for

fiscal year 2011.

(7) Pro rata application

The rates per $1,000,000 required by this subsection shall be

applied pro rata to amounts and balances of less than $1,000,000.

(8) Review and effective date

In exercising its authority under this subsection, the

Commission shall not be required to comply with the provisions of

section 553 of title 5. An adjusted rate prescribed under

paragraph (5) or (6) and published under paragraph (10) shall not

be subject to judicial review. Subject to paragraphs (3)(B) and

(9) -

(A) an adjusted rate prescribed under paragraph (5) shall

take effect on the later of -

(i) the first day of the fiscal year to which such rate

applies; or

(ii) five days after the date on which a regular

appropriation to the Commission for such fiscal year is

enacted; and

(B) an adjusted rate prescribed under paragraph (6) shall

take effect on the later of -

(i) the first day of fiscal year 2012; or

(ii) five days after the date on which a regular

appropriation to the Commission for fiscal year 2012 is

enacted.

(9) Lapse of appropriation

If on the first day of a fiscal year a regular appropriation to

the Commission has not been enacted, the Commission shall

continue to collect fees (as offsetting collections) under this

subsection at the rate in effect during the preceding fiscal

year, until 5 days after the date such a regular appropriation is

enacted.

(10) Publication

The Commission shall publish in the Federal Register notices of

the rate applicable under this subsection and under sections

78m(e) and 78n(g) (FOOTNOTE 1) of this title for each fiscal year

not later than April 30 of the fiscal year preceding the fiscal

year to which such rate applies, together with any estimates or

projections on which such rate is based.

(FOOTNOTE 1) See References in Text note below.

(11) Definitions

For purposes of this subsection:

(A) Target offsetting collection amount

The target offsetting collection amount for each of the

fiscal years 2002 through 2011 is determined according to the

following table:

Target offsetting

Fiscal year: collection amount

2002 $377,000,000

2003 $435,000,000

2004 $467,000,000

2005 $570,000,000

2006 $689,000,000

2007 $214,000,000

2008 $234,000,000

2009 $284,000,000

2010 $334,000,000

2011 $394,000,000

(B) Baseline estimate of the aggregate maximum offering prices

The baseline estimate of the aggregate maximum offering

prices for any fiscal year is the baseline estimate of the

aggregate maximum offering price at which securities are

proposed to be offered pursuant to registration statements

filed with the Commission during such fiscal year as determined

by the Commission, after consultation with the Congressional

Budget Office and the Office of Management and Budget, using

the methodology required for projections pursuant to section

907 of title 2.

(c) Time registration effective

The filing with the Commission of a registration statement, or of

an amendment to a registration statement, shall be deemed to have

taken place upon the receipt thereof, but the filing of a

registration statement shall not be deemed to have taken place

unless it is accompanied by a United States postal money order or a

certified bank check or cash for the amount of the fee required

under subsection (b) of this section.

(d) Information available to public

The information contained in or filed with any registration

statement shall be made available to the public under such

regulations as the Commission may prescribe, and copies thereof,

photostatic or otherwise, shall be furnished to every applicant at

such reasonable charge as the Commission may prescribe.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 6, 48 Stat. 78; Pub. L.

89-289, Sec. 1, Oct. 22, 1965, 79 Stat. 1051; Pub. L. 100-181,

title II, Sec. 205, Dec. 4, 1987, 101 Stat. 1252; Pub. L. 104-290,

title IV, Sec. 404, Oct. 11, 1996, 110 Stat. 3441; Pub. L. 107-123,

Sec. 4, Jan. 16, 2002, 115 Stat. 2393.)

-REFTEXT-

REFERENCES IN TEXT

Sections 78m(e) and 78n(g) of this title, referred to in subsec.

(b)(10), were in the original, ''sections 13(e) and 14(g)'' and

were translated as meaning sections 13(e) and 14(g) of the

Securities Exchange Act of 1934 to reflect the probable intent of

Congress.

-MISC2-

AMENDMENTS

2002 - Subsec. (b)(2) to (11). Pub. L. 107-123 added pars. (2) to

(11) and struck out former pars. (2) to (5), which required fee

payment, set out rates for general revenue and offsetting

collection fees, and required pro rata rates for amounts and

balances equal to less than $1,000,000.

1996 - Subsec. (b). Pub. L. 104-290 inserted heading and amended

text of subsec. (b) generally. Prior to amendment, text read as

follows: ''At the time of filing a registration statement the

applicant shall pay to the Commission a fee of one-fiftieth of 1

per centum of the maximum aggregate price at which such securities

are proposed to be offered, but in no case shall such fee be less

than $100.''

1987 - Subsec. (e). Pub. L. 100-181 struck out subsec. (e) which

provided that no registration statement should be filed within the

first 40 days following May 27, 1933.

1965 - Subsec. (b). Pub. L. 89-289 substituted ''one-fiftieth''

for ''one one-hundredth'' and ''$100'' for ''$25''.

EFFECTIVE DATE OF 2002 AMENDMENT

Amendment by Pub. L. 107-123 effective Oct. 1, 2001, except that

authorities provided by subsec. (b)(9) of this section to not apply

until Oct. 1, 2002, see section 11 of Pub. L. 107-123, set out as a

note under section 78ee of this title.

EFFECTIVE DATE OF 1965 AMENDMENT

Section 2 of Pub. L. 89-289 provided that: ''The amendment made

by the first section of this Act (amending this section) shall take

effect January 1, 1966.''

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-MISC5-

INCREASE IN REGISTRATION FEES AND DEPOSIT INTO TREASURY

Pub. L. 105-46, Sec. 113, Sept. 30, 1997, 111 Stat. 1156,

provided that the amount made available to the Securities and

Exchange Commission, under the heading Salaries and Expenses, was

to include, in addition to direct appropriations, the amount

collected under the fee rate and offsetting collection authority

contained in Public Law 104-208, which fee rate and offsetting

collection authority was to remain in effect during the period of

Pub. L. 105-46 which provided continuing appropriations for fiscal

year 1998.

Pub. L. 104-208, div. A, title I, Sec. 101(a) (title V), Sept.

30, 1996, 110 Stat. 3009, 3009-61, which provided in part that on

Sept. 30, 1996, the rate of fees under subsec. (b) of this section

were increased from one-fiftieth of one percentum to

one-thirty-third of one percentum, and such increase was to be

deposited as an offsetting collection to this appropriation, to

remain available until expended, to recover costs of services of

the securities registration process, was from the Departments of

Commerce, Justice, and State, the Judiciary, and Related Agencies

Appropriations Act, 1997, and was not repeated in subsequent

appropriations acts. Similar provisions were contained in the

following prior appropriation acts:

Pub. L. 104-134, title I, Sec. 101((a)) (title V), Apr. 26, 1996,

110 Stat. 1321, 1321-60; renumbered title I, Pub. L. 104-140, Sec.

1(a), May 2, 1996, 110 Stat. 1327.

Pub. L. 104-99, title II, Sec. 209, Jan. 26, 1996, 110 Stat. 37.

Pub. L. 104-56, Sec. 119, Nov. 20, 1995, 109 Stat. 552.

Pub. L. 104-54, Sec. 119, Nov. 19, 1995, 109 Stat. 544.

Pub. L. 104-31, Sec. 120, Sept. 30, 1995, 109 Stat. 282.

Pub. L. 103-352, Oct. 10, 1994, 108 Stat. 3148.

Pub. L. 103-121, title I, Oct. 27, 1993, 107 Stat. 1168.

Pub. L. 102-395, title I, Oct. 6, 1992, 106 Stat. 1848.

Pub. L. 102-140, title I, Oct. 28, 1991, 105 Stat. 798.

Pub. L. 101-515, title V, Nov. 5, 1990, 104 Stat. 2139.

Pub. L. 101-162, title V, Nov. 21, 1989, 103 Stat. 1022.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77b, 78m, 78n, 80a-24 of

this title.

-CITE-

15 USC Sec. 77g 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77g. Information required in registration statement

-STATUTE-

(a) The registration statement, when relating to a security other

than a security issued by a foreign government, or political

subdivision thereof, shall contain the information, and be

accompanied by the documents, specified in Schedule A of section

77aa of this title, and when relating to a security issued by a

foreign government, or political subdivision thereof, shall contain

the information, and be accompanied by the documents, specified in

Schedule B of section 77aa of this title; except that the

Commission may by rules or regulations provide that any such

information or document need not be included in respect of any

class of issuers or securities if it finds that the requirement of

such information or document is inapplicable to such class and that

disclosure fully adequate for the protection of investors is

otherwise required to be included within the registration

statement. If any accountant, engineer, or appraiser, or any

person whose profession gives authority to a statement made by him,

is named as having prepared or certified any part of the

registration statement, or is named as having prepared or certified

a report or valuation for use in connection with the registration

statement, the written consent of such person shall be filed with

the registration statement. If any such person is named as having

prepared or certified a report or valuation (other than a public

official document or statement) which is used in connection with

the registration statement, but is not named as having prepared or

certified such report or valuation for use in connection with the

registration statement, the written consent of such person shall be

filed with the registration statement unless the Commission

dispenses with such filing as impracticable or as involving undue

hardship on the person filing the registration statement. Any such

registration statement shall contain such other information, and be

accompanied by such other documents, as the Commission may by rules

or regulations require as being necessary or appropriate in the

public interest or for the protection of investors.

(b)(1) The Commission shall prescribe special rules with respect

to registration statements filed by any issuer that is a blank

check company. Such rules may, as the Commission determines

necessary or appropriate in the public interest or for the

protection of investors -

(A) require such issuers to provide timely disclosure, prior to

or after such statement becomes effective under section 77h of

this title, of (i) information regarding the company to be

acquired and the specific application of the proceeds of the

offering, or (ii) additional information necessary to prevent

such statement from being misleading;

(B) place limitations on the use of such proceeds and the

distribution of securities by such issuer until the disclosures

required under subparagraph (A) have been made; and

(C) provide a right of rescission to shareholders of such

securities.

(2) The Commission may, as it determines consistent with the

public interest and the protection of investors, by rule or order

exempt any issuer or class of issuers from the rules prescribed

under paragraph (1).

(3) For purposes of paragraph (1) of this subsection, the term

''blank check company'' means any development stage company that is

issuing a penny stock (within the meaning of section 78c(a)(51) of

this title) and that -

(A) has no specific business plan or purpose; or

(B) has indicated that its business plan is to merge with an

unidentified company or companies.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 7, 48 Stat. 78; Pub. L.

101-429, title V, Sec. 508, Oct. 15, 1990, 104 Stat. 956.)

-MISC1-

AMENDMENTS

1990 - Pub. L. 101-429 designated existing provision as subsec.

(a) and added subsec. (b).

EFFECTIVE DATE OF 1990 AMENDMENT

Section 1(c) of Pub. L. 101-429 provided that:

''(1) In general. - Except as provided in paragraphs (2) and (3),

the amendments made by this Act (enacting sections 77h-1, 78q-2,

78u-2, and 78u-3 of this title, amending this section and sections

77t, 78c, 78o, 78o-3, 78o-4, 78q-1, 78u, 78u-1, 78w, 78cc, 80a-9,

80a-41, 80b-3, 80b-9, and 80b-14 of this title, and enacting

provisions set out as notes under sections 78a, 78o, and 78s of

this title) shall be effective upon enactment (Oct. 15, 1990).

''(2) Civil penalties. -

''(A) In general. - No civil penalty may be imposed pursuant to

the amendments made by this Act on the basis of conduct occurring

before the date of enactment of this Act (Oct. 15, 1990).

''(B) Accounting and disgorgement. - Subparagraph (A) shall not

operate to preclude the Securities and Exchange Commission from

ordering an accounting or disgorgement pursuant to the amendments

made by this Act.

''(3) Special rules for title v. -

''(A) Sections 503 and 504. - Except as provided in

subparagraph (C), sections 503 (amending section 78c of this

title) and 504 (amending section 78o of this title and enacting

provisions set out as a note under section 78o of this title)

shall be effective 12 months after the date of enactment of this

Act (Oct. 15, 1990) or upon the issuance of final regulations

initially implementing such section, whichever is earlier.

''(B) Sections 505 and 508. - Except as provided in

subparagraph (C), sections 505 (amending section 78o of this

title) and 508 (amending this section) shall be effective 18

months after the date of enactment of this Act or upon the

issuance of final regulations initially implementing such

sections, whichever is earlier.

''(C) Commencement of rulemaking. - Not later than 180 days

after the date of enactment of this Act, the Commission shall

commence rulemaking proceedings to implement sections 503, 505,

and 508.''

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77eee, 79g of this title;

title 16 section 824c.

-CITE-

15 USC Sec. 77h 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77h. Taking effect of registration statements and amendments

thereto

-STATUTE-

(a) Effective date of registration statement

Except as hereinafter provided, the effective date of a

registration statement shall be the twentieth day after the filing

thereof or such earlier date as the Commission may determine,

having due regard to the adequacy of the information respecting the

issuer theretofore available to the public, to the facility with

which the nature of the securities to be registered, their

relationship to the capital structure of the issuer and the rights

of holders thereof can be understood, and to the public interest

and the protection of investors. If any amendment to any such

statement is filed prior to the effective date of such statement,

the registration statement shall be deemed to have been filed when

such amendment was filed; except that an amendment filed with the

consent of the Commission, prior to the effective date of the

registration statement, or filed pursuant to an order of the

Commission, shall be treated as a part of the registration

statement.

(b) Incomplete or inaccurate registration statement

If it appears to the Commission that a registration statement is

on its face incomplete or inaccurate in any material respect, the

Commission may, after notice by personal service or the sending of

confirmed telegraphic notice not later than ten days after the

filing of the registration statement, and opportunity for hearing

(at a time fixed by the Commission) within ten days after such

notice by personal service or the sending of such telegraphic

notice, issue an order prior to the effective date of registration

refusing to permit such statement to become effective until it has

been amended in accordance with such order. When such statement

has been amended in accordance with such order the Commission shall

so declare and the registration shall become effective at the time

provided in subsection (a) of this section or upon the date of such

declaration, whichever date is the later.

(c) Effective date of amendment to registration statement

An amendment filed after the effective date of the registration

statement, if such amendment, upon its face, appears to the

Commission not to be incomplete or inaccurate in any material

respect, shall become effective on such date as the Commission may

determine, having due regard to the public interest and the

protection of investors.

(d) Untrue statements or omissions in registration statement

If it appears to the Commission at any time that the registration

statement includes any untrue statement of a material fact or omits

to state any material fact required to be stated therein or

necessary to make the statements therein not misleading, the

Commission may, after notice by personal service or the sending of

confirmed telegraphic notice, and after opportunity for hearing (at

a time fixed by the Commission) within fifteen days after such

notice by personal service or the sending of such telegraphic

notice, issue a stop order suspending the effectiveness of the

registration statement. When such statement has been amended in

accordance with such stop order, the Commission shall so declare

and thereupon the stop order shall cease to be effective.

(e) Examination for issuance of stop order

The Commission is empowered to make an examination in any case in

order to determine whether a stop order should issue under

subsection (d) of this section. In making such examination the

Commission or any officer or officers designated by it shall have

access to and may demand the production of any books and papers of,

and may administer oaths and affirmations to and examine, the

issuer, underwriter, or any other person, in respect of any matter

relevant to the examination, and may, in its discretion, require

the production of a balance sheet exhibiting the assets and

liabilities of the issuer, or its income statement, or both, to be

certified to by a public or certified accountant approved by the

Commission. If the issuer or underwriter shall fail to cooperate,

or shall obstruct or refuse to permit the making of an examination,

such conduct shall be proper ground for the issuance of a stop

order.

(f) Notice requirements

Any notice required under this section shall be sent to or served

on the issuer, or, in case of a foreign government or political

subdivision thereof, to or on the underwriter, or, in the case of a

foreign or Territorial person, to or on its duly authorized

representative in the United States named in the registration

statement, properly directed in each case of telegraphic notice to

the address given in such statement.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 8, 48 Stat. 79; Aug. 22, 1940,

ch. 686, title III, Sec. 301, 54 Stat. 857.)

-MISC1-

AMENDMENTS

1940 - Subsec. (a). Act Aug. 22, 1940, amended subsec. (a)

generally.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77d, 77e, 77g, 77eee,

77ggg, 77iii, 78d-1, 80a-24 of this title.

-CITE-

15 USC Sec. 77h-1 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77h-1. Cease-and-desist proceedings

-STATUTE-

(a) Authority of Commission

If the Commission finds, after notice and opportunity for

hearing, that any person is violating, has violated, or is about to

violate any provision of this subchapter, or any rule or regulation

thereunder, the Commission may publish its findings and enter an

order requiring such person, and any other person that is, was, or

would be a cause of the violation, due to an act or omission the

person knew or should have known would contribute to such

violation, to cease and desist from committing or causing such

violation and any future violation of the same provision, rule, or

regulation. Such order may, in addition to requiring a person to

cease and desist from committing or causing a violation, require

such person to comply, or to take steps to effect compliance, with

such provision, rule, or regulation, upon such terms and conditions

and within such time as the Commission may specify in such order.

Any such order may, as the Commission deems appropriate, require

future compliance or steps to effect future compliance, either

permanently or for such period of time as the Commission may

specify, with such provision, rule, or regulation with respect to

any security, any issuer, or any other person.

(b) Hearing

The notice instituting proceedings pursuant to subsection (a) of

this section shall fix a hearing date not earlier than 30 days nor

later than 60 days after service of the notice unless an earlier or

a later date is set by the Commission with the consent of any

respondent so served.

(c) Temporary order

(1) In general

Whenever the Commission determines that the alleged violation

or threatened violation specified in the notice instituting

proceedings pursuant to subsection (a) of this section, or the

continuation thereof, is likely to result in significant

dissipation or conversion of assets, significant harm to

investors, or substantial harm to the public interest, including,

but not limited to, losses to the Securities Investor Protection

Corporation, prior to the completion of the proceedings, the

Commission may enter a temporary order requiring the respondent

to cease and desist from the violation or threatened violation

and to take such action to prevent the violation or threatened

violation and to prevent dissipation or conversion of assets,

significant harm to investors, or substantial harm to the public

interest as the Commission deems appropriate pending completion

of such proceeding. Such an order shall be entered only after

notice and opportunity for a hearing, unless the Commission

determines that notice and hearing prior to entry would be

impracticable or contrary to the public interest. A temporary

order shall become effective upon service upon the respondent

and, unless set aside, limited, or suspended by the Commission or

a court of competent jurisdiction, shall remain effective and

enforceable pending the completion of the proceedings.

(2) Applicability

This subsection shall apply only to a respondent that acts, or,

at the time of the alleged misconduct acted, as a broker, dealer,

investment adviser, investment company, municipal securities

dealer, government securities broker, government securities

dealer, or transfer agent, or is, or was at the time of the

alleged misconduct, an associated person of, or a person seeking

to become associated with, any of the foregoing.

(d) Review of temporary orders

(1) Commission review

At any time after the respondent has been served with a

temporary cease-and-desist order pursuant to subsection (c) of

this section, the respondent may apply to the Commission to have

the order set aside, limited, or suspended. If the respondent

has been served with a temporary cease-and-desist order entered

without a prior Commission hearing, the respondent may, within 10

days after the date on which the order was served, request a

hearing on such application and the Commission shall hold a

hearing and render a decision on such application at the earliest

possible time.

(2) Judicial review

Within -

(A) 10 days after the date the respondent was served with a

temporary cease-and-desist order entered with a prior

Commission hearing, or

(B) 10 days after the Commission renders a decision on an

application and hearing under paragraph (1), with respect to

any temporary cease-and-desist order entered without a prior

Commission hearing,

the respondent may apply to the United States district court for

the district in which the respondent resides or has its principal

place of business, or for the District of Columbia, for an order

setting aside, limiting, or suspending the effectiveness or

enforcement of the order, and the court shall have jurisdiction

to enter such an order. A respondent served with a temporary

cease-and-desist order entered without a prior Commission hearing

may not apply to the court except after hearing and decision by

the Commission on the respondent's application under paragraph

(1) of this subsection.

(3) No automatic stay of temporary order

The commencement of proceedings under paragraph (2) of this

subsection shall not, unless specifically ordered by the court,

operate as a stay of the Commission's order.

(4) Exclusive review

Section 77i(a) of this title shall not apply to a temporary

order entered pursuant to this section.

(e) Authority to enter order requiring accounting and disgorgement

In any cease-and-desist proceeding under subsection (a) of this

section, the Commission may enter an order requiring accounting and

disgorgement, including reasonable interest. The Commission is

authorized to adopt rules, regulations, and orders concerning

payments to investors, rates of interest, periods of accrual, and

such other matters as it deems appropriate to implement this

subsection.

(f) Authority of the Commission to prohibit persons from serving as

officers or directors

In any cease-and-desist proceeding under subsection (a) of this

section, the Commission may issue an order to prohibit,

conditionally or unconditionally, and permanently or for such

period of time as it shall determine, any person who has violated

section 77q(a)(1) of this title or the rules or regulations

thereunder, from acting as an officer or director of any issuer

that has a class of securities registered pursuant to section 78l

of this title, or that is required to file reports pursuant to

section 78o(d) of this title, if the conduct of that person

demonstrates unfitness to serve as an officer or director of any

such issuer.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 8A, as added Pub. L. 101-429,

title I, Sec. 102, Oct. 15, 1990, 104 Stat. 933; amended Pub. L.

107-204, title XI, Sec. 1105(b), July 30, 2002, 116 Stat. 809.)

-MISC1-

AMENDMENTS

2002 - Subsec. (f). Pub. L. 107-204 added subsec. (f).

EFFECTIVE DATE

Section effective Oct. 15, 1990, with provisions relating to

civil penalties and accounting and disgorgement, see section

1(c)(1) and (2) of Pub. L. 101-429, set out in an Effective Date of

1990 Amendment note under section 77g of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77t, 78w of this title.

-CITE-

15 USC Sec. 77i 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77i. Court review of orders

-STATUTE-

(a) Any person aggrieved by an order of the Commission may obtain

a review of such order in the court of appeals of the United

States, within any circuit wherein such person resides or has his

principal place of business, or in the United States Court of

Appeals for the District of Columbia, by filing in such Court,

within sixty days after the entry of such order, a written petition

praying that the order of the Commission be modified or be set

aside in whole or in part. A copy of such petition shall be

forthwith transmitted by the clerk of the court to the Commission,

and thereupon the Commission shall file in the court the record

upon which the order complained of was entered, as provided in

section 2112 of title 28. No objection to the order of the

Commission shall be considered by the court unless such objection

shall have been urged before the Commission. The finding of the

Commission as to the facts, if supported by evidence, shall be

conclusive. If either party shall apply to the court for leave to

adduce additional evidence, and shall show to the satisfaction of

the court that such additional evidence is material and that there

were reasonable grounds for failure to adduce such evidence in the

hearing before the Commission, the court may order such additional

evidence to be taken before the Commission and to be adduced upon

the hearing in such manner and upon such terms and conditions as to

the court may seem proper. The Commission may modify its findings

as to the facts, by reason of the additional evidence so taken, and

it shall file such modified or new findings, which, if supported by

evidence, shall be conclusive, and its recommendation, if any, for

the modification or setting aside of the original order. The

jurisdiction of the court shall be exclusive and its judgment and

decree, affirming, modifying, or setting aside, in whole or in

part, any order of the Commission, shall be final, subject to

review by the Supreme Court of the United States upon certiorari or

certification as provided in section 1254 of title 28.

(b) The commencement of proceedings under subsection (a) of this

section shall not, unless specifically ordered by the court,

operate as a stay of the Commission's order.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 9, 48 Stat. 80; Pub. L.

85-791, Sec. 9, Aug. 28, 1958, 72 Stat. 945; Pub. L. 100-181, title

II, Sec. 206, Dec. 4, 1987, 101 Stat. 1252.)

-MISC1-

AMENDMENTS

1987 - Subsec. (a). Pub. L. 100-181 substituted ''court of

appeals'' for ''Circuit Court of Appeals'', ''United States Court

of Appeals for the District of Columbia, by filing in such Court''

for ''Court of Appeals of the District of Columbia, by filing in

such court'', and ''section 1254 of title 28'' for ''sections 239

and 240 of the Judicial Code, as amended (U.S.C., title 28, secs.

346 and 347)''.

1958 - Subsec. (a). Pub. L. 85-791, in second sentence,

substituted ''transmitted by the clerk of the court to'' for

''served upon'', struck out ''certify and'' before ''file in the

court'', struck out ''a transcript of'' after ''file in the

court'', and inserted ''as provided in section 2112 of title 28''.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77h-1, 77vvv of this

title.

-CITE-

15 USC Sec. 77j 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77j. Information required in prospectus

-STATUTE-

(a) Information in registration statement; documents not required

Except to the extent otherwise permitted or required pursuant to

this subsection or subsections (c), (d), or (e) of this section -

(1) a prospectus relating to a security other than a security

issued by a foreign government or political subdivision thereof,

shall contain the information contained in the registration

statement, but it need not include the documents referred to in

paragraphs (28) to (32), inclusive, of schedule A of section 77aa

of this title;

(2) a prospectus relating to a security issued by a foreign

government or political subdivision thereof shall contain the

information contained in the registration statement, but it need

not include the documents referred to in paragraphs (13) and (14)

of schedule B of section 77aa of this title;

(3) notwithstanding the provisions of paragraphs (1) and (2) of

this subsection when a prospectus is used more than nine months

after the effective date of the registration statement, the

information contained therein shall be as of a date not more than

sixteen months prior to such use, so far as such information is

known to the user of such prospectus or can be furnished by such

user without unreasonable effort or expense;

(4) there may be omitted from any prospectus any of the

information required under this subsection which the Commission

may by rules or regulations designate as not being necessary or

appropriate in the public interest or for the protection of

investors.

(b) Summarizations and omissions allowed by rules and regulations

In addition to the prospectus permitted or required in subsection

(a) of this section, the Commission shall by rules or regulations

deemed necessary or appropriate in the public interest or for the

protection of investors permit the use of a prospectus for the

purposes of subsection (b)(1) of section 77e of this title which

omits in part or summarizes information in the prospectus specified

in subsection (a) of this section. A prospectus permitted under

this subsection shall, except to the extent the Commission by rules

or regulations deemed necessary or appropriate in the public

interest or for the protection of investors otherwise provides, be

filed as part of the registration statement but shall not be deemed

a part of such registration statement for the purposes of section

77k of this title. The Commission may at any time issue an order

preventing or suspending the use of a prospectus permitted under

this subsection, if it has reason to believe that such prospectus

has not been filed (if required to be filed as part of the

registration statement) or includes any untrue statement of a

material fact or omits to state any material fact required to be

stated therein or necessary to make the statements therein, in the

light of the circumstances under which such prospectus is or is to

be used, not misleading. Upon issuance of an order under this

subsection, the Commission shall give notice of the issuance of

such order and opportunity for hearing by personal service or the

sending of confirmed telegraphic notice. The Commission shall

vacate or modify the order at any time for good cause or if such

prospectus has been filed or amended in accordance with such order.

(c) Additional information required by rules and regulations

Any prospectus shall contain such other information as the

Commission may by rules or regulations require as being necessary

or appropriate in the public interest or for the protection of

investors.

(d) Classification of prospectuses

In the exercise of its powers under subsections (a), (b), or (c)

of this section, the Commission shall have authority to classify

prospectuses according to the nature and circumstances of their use

or the nature of the security, issue, issuer, or otherwise, and, by

rules and regulations and subject to such terms and conditions as

it shall specify therein, to prescribe as to each class the form

and contents which it may find appropriate and consistent with the

public interest and the protection of investors.

(e) Information in conspicuous part of prospectus

The statements or information required to be included in a

prospectus by or under authority of subsections (a), (b), (c), or

(d) of this section, when written, shall be placed in a conspicuous

part of the prospectus and, except as otherwise permitted by rules

or regulations, in type as large as that used generally in the body

of the prospectus.

(f) Prospectus consisting of radio or television broadcast

In any case where a prospectus consists of a radio or television

broadcast, copies thereof shall be filed with the Commission under

such rules and regulations as it shall prescribe. The Commission

may by rules and regulations require the filing with it of forms

and prospectuses used in connection with the offer or sale of

securities registered under this subchapter.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 10, 48 Stat. 81; June 6, 1934,

ch. 404, title II, Sec. 205, 48 Stat. 906; Aug. 10, 1954, ch. 667,

title I, Sec. 8, 68 Stat. 685.)

-MISC1-

AMENDMENTS

1954 - Act Aug. 10, 1954, complemented changes in section 77e of

this title by act Aug. 10, 1954, permitted offering activities in

the waiting period and in so doing rearranged the sequence of the

subsections, added new text contained in subsec. (b), and

renumbered subsecs. (c) and (d) as (e) and (f), respectively.

1934 - Subsec. (b)(1). Act June 6, 1934, amended par. (1).

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77b, 77e, 77eee, 80a-2,

80a-24 of this title.

-CITE-

15 USC Sec. 77k 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77k. Civil liabilities on account of false registration

statement

-STATUTE-

(a) Persons possessing cause of action; persons liable

In case any part of the registration statement, when such part

became effective, contained an untrue statement of a material fact

or omitted to state a material fact required to be stated therein

or necessary to make the statements therein not misleading, any

person acquiring such security (unless it is proved that at the

time of such acquisition he knew of such untruth or omission) may,

either at law or in equity, in any court of competent jurisdiction,

sue -

(1) every person who signed the registration statement;

(2) every person who was a director of (or person performing

similar functions) or partner in the issuer at the time of the

filing of the part of the registration statement with respect to

which his liability is asserted;

(3) every person who, with his consent, is named in the

registration statement as being or about to become a director,

person performing similar functions, or partner;

(4) every accountant, engineer, or appraiser, or any person

whose profession gives authority to a statement made by him, who

has with his consent been named as having prepared or certified

any part of the registration statement, or as having prepared or

certified any report or valuation which is used in connection

with the registration statement, with respect to the statement in

such registration statement, report, or valuation, which purports

to have been prepared or certified by him;

(5) every underwriter with respect to such security.

If such person acquired the security after the issuer has made

generally available to its security holders an earning statement

covering a period of at least twelve months beginning after the

effective date of the registration statement, then the right of

recovery under this subsection shall be conditioned on proof that

such person acquired the security relying upon such untrue

statement in the registration statement or relying upon the

registration statement and not knowing of such omission, but such

reliance may be established without proof of the reading of the

registration statement by such person.

(b) Persons exempt from liability upon proof of issues

Notwithstanding the provisions of subsection (a) of this section

no person, other than the issuer, shall be liable as provided

therein who shall sustain the burden of proof -

(1) that before the effective date of the part of the

registration statement with respect to which his liability is

asserted (A) he had resigned from or had taken such steps as are

permitted by law to resign from, or ceased or refused to act in,

every office, capacity, or relationship in which he was described

in the registration statement as acting or agreeing to act, and

(B) he had advised the Commission and the issuer in writing that

he had taken such action and that he would not be responsible for

such part of the registration statement; or

(2) that if such part of the registration statement became

effective without his knowledge, upon becoming aware of such fact

he forthwith acted and advised the Commission, in accordance with

paragraph (1) of this subsection, and, in addition, gave

reasonable public notice that such part of the registration

statement had become effective without his knowledge; or

(3) that (A) as regards any part of the registration statement

not purporting to be made on the authority of an expert, and not

purporting to be a copy of or extract from a report or valuation

of an expert, and not purporting to be made on the authority of a

public official document or statement, he had, after reasonable

investigation, reasonable ground to believe and did believe, at

the time such part of the registration statement became

effective, that the statements therein were true and that there

was no omission to state a material fact required to be stated

therein or necessary to make the statements therein not

misleading; and (B) as regards any part of the registration

statement purporting to be made upon his authority as an expert

or purporting to be a copy of or extract from a report or

valuation of himself as an expert, (i) he had, after reasonable

investigation, reasonable ground to believe and did believe, at

the time such part of the registration statement became

effective, that the statements therein were true and that there

was no omission to state a material fact required to be stated

therein or necessary to make the statements therein not

misleading, or (ii) such part of the registration statement did

not fairly represent his statement as an expert or was not a fair

copy of or extract from his report or valuation as an expert; and

(C) as regards any part of the registration statement purporting

to be made on the authority of an expert (other than himself) or

purporting to be a copy of or extract from a report or valuation

of an expert (other than himself), he had no reasonable ground to

believe and did not believe, at the time such part of the

registration statement became effective, that the statements

therein were untrue or that there was an omission to state a

material fact required to be stated therein or necessary to make

the statements therein not misleading, or that such part of the

registration statement did not fairly represent the statement of

the expert or was not a fair copy of or extract from the report

or valuation of the expert; and (D) as regards any part of the

registration statement purporting to be a statement made by an

official person or purporting to be a copy of or extract from a

public official document, he had no reasonable ground to believe

and did not believe, at the time such part of the registration

statement became effective, that the statements therein were

untrue, or that there was an omission to state a material fact

required to be stated therein or necessary to make the statements

therein not misleading, or that such part of the registration

statement did not fairly represent the statement made by the

official person or was not a fair copy of or extract from the

public official document.

(c) Standard of reasonableness

In determining, for the purpose of paragraph (3) of subsection

(b) of this section, what constitutes reasonable investigation and

reasonable ground for belief, the standard of reasonableness shall

be that required of a prudent man in the management of his own

property.

(d) Effective date of registration statement with regard to

underwriters

If any person becomes an underwriter with respect to the security

after the part of the registration statement with respect to which

his liability is asserted has become effective, then for the

purposes of paragraph (3) of subsection (b) of this section such

part of the registration statement shall be considered as having

become effective with respect to such person as of the time when he

became an underwriter.

(e) Measure of damages; undertaking for payment of costs

The suit authorized under subsection (a) of this section may be

to recover such damages as shall represent the difference between

the amount paid for the security (not exceeding the price at which

the security was offered to the public) and (1) the value thereof

as of the time such suit was brought, or (2) the price at which

such security shall have been disposed of in the market before

suit, or (3) the price at which such security shall have been

disposed of after suit but before judgment if such damages shall be

less than the damages representing the difference between the

amount paid for the security (not exceeding the price at which the

security was offered to the public) and the value thereof as of the

time such suit was brought: Provided, That if the defendant proves

that any portion or all of such damages represents other than the

depreciation in value of such security resulting from such part of

the registration statement, with respect to which his liability is

asserted, not being true or omitting to state a material fact

required to be stated therein or necessary to make the statements

therein not misleading, such portion of or all such damages shall

not be recoverable. In no event shall any underwriter (unless such

underwriter shall have knowingly received from the issuer for

acting as an underwriter some benefit, directly or indirectly, in

which all other underwriters similarly situated did not share in

proportion to their respective interests in the underwriting) be

liable in any suit or as a consequence of suits authorized under

subsection (a) of this section for damages in excess of the total

price at which the securities underwritten by him and distributed

to the public were offered to the public. In any suit under this

or any other section of this subchapter the court may, in its

discretion, require an undertaking for the payment of the costs of

such suit, including reasonable attorney's fees, and if judgment

shall be rendered against a party litigant, upon the motion of the

other party litigant, such costs may be assessed in favor of such

party litigant (whether or not such undertaking has been required)

if the court believes the suit or the defense to have been without

merit, in an amount sufficient to reimburse him for the reasonable

expenses incurred by him, in connection with such suit, such costs

to be taxed in the manner usually provided for taxing of costs in

the court in which the suit was heard.

(f) Joint and several liability; liability of outside director

(1) Except as provided in paragraph (2), all or any one or more

of the persons specified in subsection (a) of this section shall be

jointly and severally liable, and every person who becomes liable

to make any payment under this section may recover contribution as

in cases of contract from any person who, if sued separately, would

have been liable to make the same payment, unless the person who

has become liable was, and the other was not, guilty of fraudulent

misrepresentation.

(2)(A) The liability of an outside director under subsection (e)

of this section shall be determined in accordance with section

78u-4(f) of this title.

(B) For purposes of this paragraph, the term ''outside director''

shall have the meaning given such term by rule or regulation of the

Commission.

(g) Offering price to public as maximum amount recoverable

In no case shall the amount recoverable under this section exceed

the price at which the security was offered to the public.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 11, 48 Stat. 82; June 6, 1934,

ch. 404, title II, Sec. 206, 48 Stat. 907; Pub. L. 104-67, title

II, Sec. 201(b), Dec. 22, 1995, 109 Stat. 762; Pub. L. 105-353,

title III, Sec. 301(a)(2), Nov. 3, 1998, 112 Stat. 3235.)

-MISC1-

AMENDMENTS

1998 - Subsec. (f)(2)(A). Pub. L. 105-353 made technical

amendment to reference in original act which appears in text as

reference to section 78u-4(f) of this title.

1995 - Subsec. (f). Pub. L. 104-67 designated existing provisions

as par. (1), substituted ''Except as provided in paragraph (2),

all'' for ''All'', and added par. (2).

1934 - Subsec. (a). Act June 6, 1934, inserted last par.

Subsecs. (b)(3), (c) to (e). Act June 6, 1934, amended subsecs.

(b)(3) and (c) to (e).

EFFECTIVE DATE OF 1995 AMENDMENT

Section 202 of title II of Pub. L. 104-67 provided that: ''The

amendments made by this title (amending this section and section

78u-4 of this title) shall not affect or apply to any private

action arising under the securities laws commenced before and

pending on the date of enactment of this Act (Dec. 22, 1995).''

CONSTRUCTION OF 1995 AMENDMENT

Nothing in amendment by Pub. L. 104-67 to be deemed to create or

ratify any implied right of action, or to prevent Commission, by

rule or regulation, from restricting or otherwise regulating

private actions under Securities Exchange Act of 1934 (15 U.S.C.

78a et seq.), see section 203 of Pub. L. 104-67, set out as a

Construction note under section 78j-1 of this title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77j, 77m, 77o, 77eee,

78u-4, 80a-24 of this title.

-CITE-

15 USC Sec. 77l 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77l. Civil liabilities arising in connection with prospectuses

and communications

-STATUTE-

(a) In general

Any person who -

(1) offers or sells a security in violation of section 77e of

this title, or

(2) offers or sells a security (whether or not exempted by the

provisions of section 77c of this title, other than paragraphs

(2) and (14) of subsection (a) of said section), by the use of

any means or instruments of transportation or communication in

interstate commerce or of the mails, by means of a prospectus or

oral communication, which includes an untrue statement of a

material fact or omits to state a material fact necessary in

order to make the statements, in the light of the circumstances

under which they were made, not misleading (the purchaser not

knowing of such untruth or omission), and who shall not sustain

the burden of proof that he did not know, and in the exercise of

reasonable care could not have known, of such untruth or

omission,

shall be liable, subject to subsection (b) of this section, to the

person purchasing such security from him, who may sue either at law

or in equity in any court of competent jurisdiction, to recover the

consideration paid for such security with interest thereon, less

the amount of any income received thereon, upon the tender of such

security, or for damages if he no longer owns the security.

(b) Loss causation

In an action described in subsection (a)(2) of this section, if

the person who offered or sold such security proves that any

portion or all of the amount recoverable under subsection (a)(2) of

this section represents other than the depreciation in value of the

subject security resulting from such part of the prospectus or oral

communication, with respect to which the liability of that person

is asserted, not being true or omitting to state a material fact

required to be stated therein or necessary to make the statement

not misleading, then such portion or amount, as the case may be,

shall not be recoverable.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 12, 48 Stat. 84; Aug. 10,

1954, ch. 667, title I, Sec. 9, 68 Stat. 686; Pub. L. 104-67, title

I, Sec. 105, Dec. 22, 1995, 109 Stat. 757; Pub. L. 106-554, Sec.

1(a)(5) (title II, Sec. 208(a)(3)), Dec. 21, 2000, 114 Stat. 2763,

2763A-435.)

-MISC1-

AMENDMENTS

2000 - Subsec. (a)(2). Pub. L. 106-554 substituted ''paragraphs

(2) and (14)'' for ''paragraph (2)''.

1995 - Pub. L. 104-67 designated existing provisions as subsec.

(a), inserted heading, inserted '', subject to subsection (b) of

this section,'' after ''shall be liable'' in concluding provisions,

and added subsec. (b).

1954 - Act Aug. 10, 1954, inserted ''offers or'' before ''sells''

in pars. (1) and (2).

EFFECTIVE DATE OF 1995 AMENDMENT

Section 108 of title I of Pub. L. 104-67 provided that: ''The

amendments made by this title (enacting sections 77z-1, 77z-2,

78u-4, and 78u-5 of this title and amending this section and

sections 77t, 78o, 78t, and 78u of this title and section 1964 of

Title 18, Crimes and Criminal Procedure) shall not affect or apply

to any private action arising under title I of the Securities

Exchange Act of 1934 (15 U.S.C. 78a et seq.) or title I of the

Securities Act of 1933 (15 U.S.C. 77a et seq.), commenced before

and pending on the date of enactment of this Act (Dec. 22, 1995).''

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

CONSTRUCTION OF 1995 AMENDMENT

Nothing in amendment by Pub. L. 104-67 to be deemed to create or

ratify any implied right of action, or to prevent Commission, by

rule or regulation, from restricting or otherwise regulating

private actions under Securities Exchange Act of 1934 (15 U.S.C.

78a et seq.), see section 203 of Pub. L. 104-67, set out as a

Construction note under section 78j-1 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77m, 77o, 77eee of this

title.

-CITE-

15 USC Sec. 77m 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77m. Limitation of actions

-STATUTE-

No action shall be maintained to enforce any liability created

under section 77k or 77l(a)(2) of this title unless brought within

one year after the discovery of the untrue statement or the

omission, or after such discovery should have been made by the

exercise of reasonable diligence, or, if the action is to enforce a

liability created under section 77l(a)(1) of this title, unless

brought within one year after the violation upon which it is

based. In no event shall any such action be brought to enforce a

liability created under section 77k or 77l(a)(1) of this title more

than three years after the security was bona fide offered to the

public, or under section 77l(a)(2) of this title more than three

years after the sale.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 13, 48 Stat. 84; June 6, 1934,

ch. 404, title II, Sec. 207, 48 Stat. 908; Pub. L. 105-353, title

III, Sec. 301(a)(3), Nov. 3, 1998, 112 Stat. 3235.)

-MISC1-

AMENDMENTS

1998 - Pub. L. 105-353 substituted ''77l(a)(2)'' for ''77l(2)''

in two places and ''77l(a)(1)'' for ''77l(1)'' in two places.

1934 - Act June 6, 1934, substituted ''one year'' for ''two

years'', ''three years'' for ''ten years'', and inserted ''or under

section 77l(2) of this title more than three years after the

sale''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 80a-24 of this title.

-CITE-

15 USC Sec. 77n 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77n. Contrary stipulations void

-STATUTE-

Any condition, stipulation, or provision binding any person

acquiring any security to waive compliance with any provision of

this subchapter or of the rules and regulations of the Commission

shall be void.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 14, 48 Stat. 84.)

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-CITE-

15 USC Sec. 77o 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77o. Liability of controlling persons

-STATUTE-

Every person who, by or through stock ownership, agency, or

otherwise, or who, pursuant to or in connection with an agreement

or understanding with one or more other persons by or through stock

ownership, agency, or otherwise, controls any person liable under

sections 77k or 77l of this title, shall also be liable jointly and

severally with and to the same extent as such controlled person to

any person to whom such controlled person is liable, unless the

controlling person had no knowledge of or reasonable ground to

believe in the existence of the facts by reason of which the

liability of the controlled person is alleged to exist.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 15, 48 Stat. 84; June 6, 1934,

ch. 404, title II, Sec. 208, 48 Stat. 908.)

-MISC1-

AMENDMENTS

1934 - Act June 6, 1934, exempted from liability controlling

persons having no knowledge or reasonable grounds for belief.

-CITE-

15 USC Sec. 77p 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77p. Additional remedies; limitation on remedies

-STATUTE-

(a) Remedies additional

Except as provided in subsection (b) of this section, the rights

and remedies provided by this subchapter shall be in addition to

any and all other rights and remedies that may exist at law or in

equity.

(b) Class action limitations

No covered class action based upon the statutory or common law of

any State or subdivision thereof may be maintained in any State or

Federal court by any private party alleging -

(1) an untrue statement or omission of a material fact in

connection with the purchase or sale of a covered security; or

(2) that the defendant used or employed any manipulative or

deceptive device or contrivance in connection with the purchase

or sale of a covered security.

(c) Removal of covered class actions

Any covered class action brought in any State court involving a

covered security, as set forth in subsection (b) of this section,

shall be removable to the Federal district court for the district

in which the action is pending, and shall be subject to subsection

(b) of this section.

(d) Preservation of certain actions

(1) Actions under State law of State of incorporation

(A) Actions preserved

Notwithstanding subsection (b) or (c) of this section, a

covered class action described in subparagraph (B) of this

paragraph that is based upon the statutory or common law of the

State in which the issuer is incorporated (in the case of a

corporation) or organized (in the case of any other entity) may

be maintained in a State or Federal court by a private party.

(B) Permissible actions

A covered class action is described in this subparagraph if

it involves -

(i) the purchase or sale of securities by the issuer or an

affiliate of the issuer exclusively from or to holders of

equity securities of the issuer; or

(ii) any recommendation, position, or other communication

with respect to the sale of securities of the issuer that -

(I) is made by or on behalf of the issuer or an affiliate

of the issuer to holders of equity securities of the

issuer; and

(II) concerns decisions of those equity holders with

respect to voting their securities, acting in response to a

tender or exchange offer, or exercising dissenters' or

appraisal rights.

(2) State actions

(A) In general

Notwithstanding any other provision of this section, nothing

in this section may be construed to preclude a State or

political subdivision thereof or a State pension plan from

bringing an action involving a covered security on its own

behalf, or as a member of a class comprised solely of other

States, political subdivisions, or State pension plans that are

named plaintiffs, and that have authorized participation, in

such action.

(B) ''State pension plan'' defined

For purposes of this paragraph, the term ''State pension

plan'' means a pension plan established and maintained for its

employees by the government of the State or political

subdivision thereof, or by any agency or instrumentality

thereof.

(3) Actions under contractual agreements between issuers and

indenture trustees

Notwithstanding subsection (b) or (c) of this section, a

covered class action that seeks to enforce a contractual

agreement between an issuer and an indenture trustee may be

maintained in a State or Federal court by a party to the

agreement or a successor to such party.

(4) Remand of removed actions

In an action that has been removed from a State court pursuant

to subsection (c) of this section, if the Federal court

determines that the action may be maintained in State court

pursuant to this subsection, the Federal court shall remand such

action to such State court.

(e) Preservation of State jurisdiction

The securities commission (or any agency or office performing

like functions) of any State shall retain jurisdiction under the

laws of such State to investigate and bring enforcement actions.

(f) Definitions

For purposes of this section, the following definitions shall

apply:

(1) Affiliate of the issuer

The term ''affiliate of the issuer'' means a person that

directly or indirectly, through one or more intermediaries,

controls or is controlled by or is under common control with, the

issuer.

(2) Covered class action

(A) In general

The term ''covered class action'' means -

(i) any single lawsuit in which -

(I) damages are sought on behalf of more than 50 persons

or prospective class members, and questions of law or fact

common to those persons or members of the prospective

class, without reference to issues of individualized

reliance on an alleged misstatement or omission,

predominate over any questions affecting only individual

persons or members; or

(II) one or more named parties seek to recover damages on

a representative basis on behalf of themselves and other

unnamed parties similarly situated, and questions of law or

fact common to those persons or members of the prospective

class predominate over any questions affecting only

individual persons or members; or

(ii) any group of lawsuits filed in or pending in the same

court and involving common questions of law or fact, in which

-

(I) damages are sought on behalf of more than 50 persons;

and

(II) the lawsuits are joined, consolidated, or otherwise

proceed as a single action for any purpose.

(B) Exception for derivative actions

Notwithstanding subparagraph (A), the term ''covered class

action'' does not include an exclusively derivative action

brought by one or more shareholders on behalf of a corporation.

(C) Counting of certain class members

For purposes of this paragraph, a corporation, investment

company, pension plan, partnership, or other entity, shall be

treated as one person or prospective class member, but only if

the entity is not established for the purpose of participating

in the action.

(D) Rule of construction

Nothing in this paragraph shall be construed to affect the

discretion of a State court in determining whether actions

filed in such court should be joined, consolidated, or

otherwise allowed to proceed as a single action.

(3) Covered security

The term ''covered security'' means a security that satisfies

the standards for a covered security specified in paragraph (1)

or (2) of section 77r(b) of this title at the time during which

it is alleged that the misrepresentation, omission, or

manipulative or deceptive conduct occurred, except that such term

shall not include any debt security that is exempt from

registration under this subchapter pursuant to rules issued by

the Commission under section 77d(2) of this title.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 16, 48 Stat. 84; Pub. L.

105-353, title I, Sec. 101(a)(1), Nov. 3, 1998, 112 Stat. 3227.)

-MISC1-

AMENDMENTS

1998 - Pub. L. 105-353 amended section catchline and text

generally. Prior to amendment, text read as follows: ''The rights

and remedies provided by this subchapter shall be in addition to

any and all other rights and remedies that may exist at law or in

equity.''

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-353, title I, Sec. 101(c), Nov. 3, 1998, 112 Stat.

3233, provided that: ''The amendments made by this section

(amending this section and sections 77v, 77z-1, 78u-4, and 78bb of

this title) shall not affect or apply to any action commenced

before and pending on the date of enactment of this Act (Nov. 3,

1998).''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 77v of this title.

-CITE-

15 USC Sec. 77q 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77q. Fraudulent interstate transactions

-STATUTE-

(a) Use of interstate commerce for purpose of fraud or deceit

It shall be unlawful for any person in the offer or sale of any

securities or any security-based swap agreement (as defined in

section 206B of the Gramm-Leach-Bliley Act) by the use of any means

or instruments of transportation or communication in interstate

commerce or by use of the mails, directly or indirectly -

(1) to employ any device, scheme, or artifice to defraud, or

(2) to obtain money or property by means of any untrue

statement of a material fact or any omission to state a material

fact necessary in order to make the statements made, in light of

the circumstances under which they were made, not misleading; or

(3) to engage in any transaction, practice, or course of

business which operates or would operate as a fraud or deceit

upon the purchaser.

(b) Use of interstate commerce for purpose of offering for sale

It shall be unlawful for any person, by the use of any means or

instruments of transportation or communication in interstate

commerce or by the use of the mails, to publish, give publicity to,

or circulate any notice, circular, advertisement, newspaper,

article, letter, investment service, or communication which, though

not purporting to offer a security for sale, describes such

security for a consideration received or to be received, directly

or indirectly, from an issuer, underwriter, or dealer, without

fully disclosing the receipt, whether past or prospective, of such

consideration and the amount thereof.

(c) Exemptions of section 77c not applicable to this section

The exemptions provided in section 77c of this title shall not

apply to the provisions of this section.

(d) Authority with respect to security-based swap agreements

The authority of the Commission under this section with respect

to security-based swap agreements (as defined in section 206B of

the Gramm-Leach-Bliley Act) shall be subject to the restrictions

and limitations of section 77b-1(b) of this title.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 17, 48 Stat. 84; Aug. 10,

1954, ch. 667, title I, Sec. 10, 68 Stat. 686; Pub. L. 106-554,

Sec. 1(a)(5) (title III, Sec. 302(b), (c)), Dec. 21, 2000, 114

Stat. 2763, 2763A-452.)

-REFTEXT-

REFERENCES IN TEXT

Section 206B of the Gramm-Leach-Bliley Act, referred to in

subsecs. (a) and (d), is section 206B of Pub. L. 106-102 which is

set out in a note under section 78c of this title.

-MISC2-

AMENDMENTS

2000 - Subsec. (a). Pub. L. 106-554, Sec. 1(a)(5) (title III,

Sec. 302(b)), amended subsec. (a) generally. Prior to amendment,

subsec. (a) read as follows: ''It shall be unlawful for any person

in the offer or sale of any securities by the use of any means or

instruments of transportation or communication in interstate

commerce or by the use of the mails, directly or indirectly -

''(1) to employ any device, scheme, or artifice to defraud, or

''(2) to obtain money or property by means of any untrue

statement of a material fact or any omission to state a material

fact necessary in order to make the statements made, in the light

of the circumstances under which they were made, not misleading,

or

''(3) to engage in any transaction, practice, or course of

business which operates or would operate as a fraud or deceit

upon the purchaser.''

Subsec. (d). Pub. L. 106-554, Sec. 1(a)(5) (title III, Sec.

302(c)), added subsec. (d).

1954 - Subsec. (a). Act Aug. 10, 1954, inserted ''offer or''

before ''sale'' in introductory text.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77h-1, 77t, 77eee, 78j,

3904 of this title; title 7 section 1932; title 42 section 9675.

-CITE-

15 USC Sec. 77r 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77r. Exemption from State regulation of securities offerings

-STATUTE-

(a) Scope of exemption

Except as otherwise provided in this section, no law, rule,

regulation, or order, or other administrative action of any State

or any political subdivision thereof -

(1) requiring, or with respect to, registration or

qualification of securities, or registration or qualification of

securities transactions, shall directly or indirectly apply to a

security that -

(A) is a covered security; or

(B) will be a covered security upon completion of the

transaction;

(2) shall directly or indirectly prohibit, limit, or impose any

conditions upon the use of -

(A) with respect to a covered security described in

subsection (b) of this section, any offering document that is

prepared by or on behalf of the issuer; or

(B) any proxy statement, report to shareholders, or other

disclosure document relating to a covered security or the

issuer thereof that is required to be and is filed with the

Commission or any national securities organization registered

under section 78o-3 of this title, except that this

subparagraph does not apply to the laws, rules, regulations, or

orders, or other administrative actions of the State of

incorporation of the issuer; or

(3) shall directly or indirectly prohibit, limit, or impose

conditions, based on the merits of such offering or issuer, upon

the offer or sale of any security described in paragraph (1).

(b) Covered securities

For purposes of this section, the following are covered

securities:

(1) Exclusive Federal registration of nationally traded

securities

A security is a covered security if such security is -

(A) listed, or authorized for listing, on the New York Stock

Exchange or the American Stock Exchange, or listed, or

authorized for listing, on the National Market System of the

Nasdaq Stock Market (or any successor to such entities);

(B) listed, or authorized for listing, on a national

securities exchange (or tier or segment thereof) that has

listing standards that the Commission determines by rule (on

its own initiative or on the basis of a petition) are

substantially similar to the listing standards applicable to

securities described in subparagraph (A); or

(C) is a security of the same issuer that is equal in

seniority or that is a senior security to a security described

in subparagraph (A) or (B).

(2) Exclusive Federal registration of investment companies

A security is a covered security if such security is a security

issued by an investment company that is registered, or that has

filed a registration statement, under the Investment Company Act

of 1940 (15 U.S.C. 80a-1 et seq.).

(3) Sales to qualified purchasers

A security is a covered security with respect to the offer or

sale of the security to qualified purchasers, as defined by the

Commission by rule. In prescribing such rule, the Commission may

define the term ''qualified purchaser'' differently with respect

to different categories of securities, consistent with the public

interest and the protection of investors.

(4) Exemption in connection with certain exempt offerings

A security is a covered security with respect to a transaction

that is exempt from registration under this subchapter pursuant

to -

(A) paragraph (1) or (3) of section 77d of this title, and

the issuer of such security files reports with the Commission

pursuant to section 78m or 78o(d) of this title;

(B) section 77d(4) of this title;

(C) section 77c(a) of this title, other than the offer or

sale of a security that is exempt from such registration

pursuant to paragraph (4), (10), or (11) of such section,

except that a municipal security that is exempt from such

registration pursuant to paragraph (2) of such section is not a

covered security with respect to the offer or sale of such

security in the State in which the issuer of such security is

located; or

(D) Commission rules or regulations issued under section

77d(2) of this title, except that this subparagraph does not

prohibit a State from imposing notice filing requirements that

are substantially similar to those required by rule or

regulation under section 77d(2) of this title that are in

effect on September 1, 1996.

(c) Preservation of authority

(1) Fraud authority

Consistent with this section, the securities commission (or any

agency or office performing like functions) of any State shall

retain jurisdiction under the laws of such State to investigate

and bring enforcement actions with respect to fraud or deceit, or

unlawful conduct by a broker or dealer, in connection with

securities or securities transactions.

(2) Preservation of filing requirements

(A) Notice filings permitted

Nothing in this section prohibits the securities commission

(or any agency or office performing like functions) of any

State from requiring the filing of any document filed with the

Commission pursuant to this subchapter, together with annual or

periodic reports of the value of securities sold or offered to

be sold to persons located in the State (if such sales data is

not included in documents filed with the Commission), solely

for notice purposes and the assessment of any fee, together

with a consent to service of process and any required fee.

(B) Preservation of fees

(i) In general

Until otherwise provided by law, rule, regulation, or

order, or other administrative action of any State, or any

political subdivision thereof, adopted after October 11,

1996, filing or registration fees with respect to securities

or securities transactions shall continue to be collected in

amounts determined pursuant to State law as in effect on the

day before October 11, 1996.

(ii) Schedule

The fees required by this subparagraph shall be paid, and

all necessary supporting data on sales or offers for sales

required under subparagraph (A), shall be reported on the

same schedule as would have been applicable had the issuer

not relied on the exemption provided in subsection (a) of

this section.

(C) Availability of preemption contingent on payment of fees

(i) In general

During the period beginning on October 11, 1996, and ending

3 years after October 11, 1996, the securities commission (or

any agency or office performing like functions) of any State

may require the registration of securities issued by any

issuer who refuses to pay the fees required by subparagraph

(B).

(ii) Delays

For purposes of this subparagraph, delays in payment of

fees or underpayments of fees that are promptly remedied

shall not constitute a refusal to pay fees.

(D) Fees not permitted on listed securities

Notwithstanding subparagraphs (A), (B), and (C), no filing or

fee may be required with respect to any security that is a

covered security pursuant to subsection (b)(1) of this section,

or will be such a covered security upon completion of the

transaction, or is a security of the same issuer that is equal

in seniority or that is a senior security to a security that is

a covered security pursuant to subsection (b)(1) of this

section.

(3) Enforcement of requirements

Nothing in this section shall prohibit the securities

commission (or any agency or office performing like functions) of

any State from suspending the offer or sale of securities within

such State as a result of the failure to submit any filing or fee

required under law and permitted under this section.

(d) Definitions

For purposes of this section, the following definitions shall

apply:

(1) Offering document

The term ''offering document'' -

(A) has the meaning given the term ''prospectus'' in section

77b(a)(10) of this title, but without regard to the provisions

of subparagraphs (a) and (b) of that section; and

(B) includes a communication that is not deemed to offer a

security pursuant to a rule of the Commission.

(2) Prepared by or on behalf of the issuer

Not later than 6 months after October 11, 1996, the Commission

shall, by rule, define the term ''prepared by or on behalf of the

issuer'' for purposes of this section.

(3) State

The term ''State'' has the same meaning as in section 78c of

this title.

(4) Senior security

The term ''senior security'' means any bond, debenture, note,

or similar obligation or instrument constituting a security and

evidencing indebtedness, and any stock of a class having priority

over any other class as to distribution of assets or payment of

dividends.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 18, 48 Stat. 85; Pub. L.

104-290, title I, Sec. 102(a), Oct. 11, 1996, 110 Stat. 3417; Pub.

L. 105-353, title III, Sec. 301(a)(4), 302, Nov. 3, 1998, 112 Stat.

3235, 3237.)

-REFTEXT-

REFERENCES IN TEXT

The Investment Company Act of 1940, referred to in subsec.

(b)(2), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, as

amended, which is classified generally to subchapter I (Sec. 80a-1

et seq.) of chapter 2D of this title. For complete classification

of this Act to the Code, see section 80a-51 of this title and

Tables.

-MISC2-

AMENDMENTS

1998 - Subsec. (b)(1)(A). Pub. L. 105-353, Sec. 301(a)(4)(A),

inserted '', or authorized for listing,'' after ''Exchange, or

listed''.

Subsec. (b)(4)(C). Pub. L. 105-353, Sec. 302, substituted

''paragraph (4), (10), or (11)'' for ''paragraph (4) or (11)''.

Subsec. (c)(2)(B)(i), (C)(i). Pub. L. 105-353, Sec. 301(a)(4)(B),

(C), made technical amendments to references in original act which

appear in text as references to October 11, 1996.

Subsec. (d)(1)(A). Pub. L. 105-353, Sec. 301(a)(4)(D),

substituted ''section 77b(a)(10)'' for ''section 77b(10)'' and

''subparagraphs (a) and (b)'' for ''subparagraphs (A) and (B)''.

Subsec. (d)(2). Pub. L. 105-353, Sec. 301(a)(4)(E), made

technical amendment to reference in original act which appears in

text as reference to October 11, 1996.

Subsec. (d)(4). Pub. L. 105-353, Sec. 301(a)(4)(F), substituted

''The term'' for ''For purposes of this paragraph, the term''.

1996 - Pub. L. 104-290 substituted ''Exemption from State

regulation of securities offerings'' for ''State control of

securities'' as section catchline and amended text generally.

Prior to amendment, text read as follows: ''Nothing in this

subchapter shall affect the jurisdiction of the securities

commission (or any agency or office performing like functions) of

any State or Territory of the United States, or the District of

Columbia, over any security or any person.''

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-MISC5-

STUDY AND REPORT ON UNIFORMITY OF STATE REGULATORY REQUIREMENTS

Section 102(b) of Pub. L. 104-290 provided that: ''The Commission

shall conduct a study, after consultation with States, issuers,

brokers, and dealers, on the extent to which uniformity of State

regulatory requirements for securities or securities transactions

has been achieved for securities that are not covered securities

(within the meaning of section 18 of the Securities Act of 1933 (15

U.S.C. 77r), as amended by paragraph (1) of this subsection). Not

later than 1 year after the date of enactment of this Act (Oct. 11,

1996), the Commission shall submit a report to the Congress on the

results of such study.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77p, 78bb, 6701 of this

title.

-CITE-

15 USC Sec. 77r-1 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77r-1. Preemption of State law

-STATUTE-

(a) Authority to purchase, hold, and invest in securities;

securities considered as obligations of United States

(1) Any person, trust, corporation, partnership, association,

business trust, or business entity created pursuant to or existing

under the laws of the United States or any State shall be

authorized to purchase, hold, and invest in securities that are -

(A) offered and sold pursuant to section 77d(5) of this title,

(B) mortgage related securities (as that term is defined in

section 78c(a)(41) of this title),

(C) small business related securities (as defined in section

78c(a)(53) of this title), or

(D) securities issued or guaranteed by the Federal Home Loan

Mortgage Corporation or the Federal National Mortgage

Association,

to the same extent that such person, trust, corporation,

partnership, association, business trust, or business entity is

authorized under any applicable law to purchase, hold or invest in

obligations issued by or guaranteed as to principal and interest by

the United States or any agency or instrumentality thereof.

(2) Where State law limits the purchase, holding, or investment

in obligations issued by the United States by such a person, trust,

corporation, partnership, association, business trust, or business

entity, such securities that are -

(A) offered and sold pursuant to section 77d(5) of this title,

(B) mortgage related securities (as that term is defined in

section 78c(a)(41) of this title),

(C) small business related securities (as defined in section

78c(a)(53) of this title), or

(D) securities issued or guaranteed by the Federal Home Loan

Mortgage Corporation or the Federal National Mortgage

Association,

shall be considered to be obligations issued by the United States

for purposes of the limitation.

(b) Exception; validity of contracts under prior law

The provisions of subsection (a) of this section shall not apply

with respect to a particular person, trust, corporation,

partnership, association, business trust, or business entity or

class thereof in any State that, prior to the expiration of seven

years after October 3, 1984, enacts a statute that specifically

refers to this section and either prohibits or provides for a more

limited authority to purchase, hold, or invest in such securities

by any person, trust, corporation, partnership, association,

business trust, or business entity or class thereof than is

provided in subsection (a) of this section. The enactment by any

State of any statute of the type described in the preceding

sentence shall not affect the validity of any contractual

commitment to purchase, hold, or invest that was made prior thereto

and shall not require the sale or other disposition of any

securities acquired prior thereto.

(c) Registration and qualification requirements; exemption;

subsequent enactment by State

Any securities that are offered and sold pursuant to section

77d(5) of this title, that are mortgage related securities (as that

term is defined in section 78c(a)(41) of this title), or that are

small business related securities (as defined in section 78c(a)(53)

of this title) shall be exempt from any law of any State with

respect to or requiring registration or qualification of securities

or real estate to the same extent as any obligation issued by or

guaranteed as to principal and interest by the United States or any

agency or instrumentality thereof. Any State may, prior to the

expiration of seven years after October 3, 1984, enact a statute

that specifically refers to this section and requires registration

or qualification of any such security on terms that differ from

those applicable to any obligation issued by the United States.

(d) Implementation

(1) Limitation

The provisions of subsections (a) and (b) of this section

concerning small business related securities shall not apply with

respect to a particular person, trust, corporation, partnership,

association, business trust, or business entity or class thereof

in any State that, prior to the expiration of 7 years after

September 23, 1994, enacts a statute that specifically refers to

this section and either prohibits or provides for a more limited

authority to purchase, hold, or invest in such small business

related securities by any person, trust, corporation,

partnership, association, business trust, or business entity or

class thereof than is provided in this section. The enactment by

any State of any statute of the type described in the preceding

sentence shall not affect the validity of any contractual

commitment to purchase, hold, or invest that was made prior to

such enactment, and shall not require the sale or other

disposition of any small business related securities acquired

prior to the date of such enactment.

(2) State registration or qualification requirements

Any State may, not later than 7 years after September 23, 1994,

enact a statute that specifically refers to this section and

requires registration or qualification of any small business

related securities on terms that differ from those applicable to

any obligation issued by the United States.

-SOURCE-

(Pub. L. 98-440, title I, Sec. 106, Oct. 3, 1984, 98 Stat. 1691;

Pub. L. 103-325, title II, Sec. 207, Sept. 23, 1994, 108 Stat.

2199.)

-COD-

CODIFICATION

Section was enacted as part of the Secondary Mortgage Market

Enhancement Act of 1984, and not as part of the Securities Act of

1933, which comprises this subchapter.

-MISC3-

AMENDMENTS

1994 - Subsec. (a)(1)(B) to (D). Pub. L. 103-325, Sec. 207(a),

struck out ''or'' at end of subpar. (B), added subpar. (C), and

redesignated former subpar. (C) as (D).

Subsec. (a)(2)(B) to (D). Pub. L. 103-325, Sec. 207(b), struck

out ''or'' at end of subpar. (B), added subpar. (C), and

redesignated former subpar. (C) as (D).

Subsec. (c). Pub. L. 103-325, Sec. 207(c), in first sentence

substituted '', that'' for ''or that'' before ''are mortgage

related securities'' and inserted '', or that are small business

related securities (as defined in section 78c(a)(53) of this

title)'' before ''shall be exempt''.

Subsec. (d). Pub. L. 103-325, Sec. 207(d), added subsec. (d).

-CITE-

15 USC Sec. 77s 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77s. Special powers of Commission

-STATUTE-

(a) Rules and regulations

The Commission shall have authority from time to time to make,

amend, and rescind such rules and regulations as may be necessary

to carry out the provisions of this subchapter, including rules and

regulations governing registration statements and prospectuses for

various classes of securities and issuers, and defining accounting,

technical, and trade terms used in this subchapter. Among other

things, the Commission shall have authority, for the purposes of

this subchapter, to prescribe the form or forms in which required

information shall be set forth, the items or details to be shown in

the balance sheet and earning statement, and the methods to be

followed in the preparation of accounts, in the appraisal or

valuation of assets and liabilities, in the determination of

depreciation and depletion, in the differentiation of recurring and

nonrecurring income, in the differentiation of investment and

operating income, and in the preparation, where the Commission

deems it necessary or desirable, of consolidated balance sheets or

income accounts of any person directly or indirectly controlling or

controlled by the issuer, or any person under direct or indirect

common control with the issuer. The rules and regulations of the

Commission shall be effective upon publication in the manner which

the Commission shall prescribe. No provision of this subchapter

imposing any liability shall apply to any act done or omitted in

good faith in conformity with any rule or regulation of the

Commission, notwithstanding that such rule or regulation may, after

such act or omission, be amended or rescinded or be determined by

judicial or other authority to be invalid for any reason.

(b) Recognition of accounting standards

(1) In general

In carrying out its authority under subsection (a) of this

section and under section 78m(b) of this title, the Commission

may recognize, as ''generally accepted'' for purposes of the

securities laws, any accounting principles established by a

standard setting body -

(A) that -

(i) is organized as a private entity;

(ii) has, for administrative and operational purposes, a

board of trustees (or equivalent body) serving in the public

interest, the majority of whom are not, concurrent with their

service on such board, and have not been during the 2-year

period preceding such service, associated persons of any

registered public accounting firm;

(iii) is funded as provided in section 7219 of this title;

(iv) has adopted procedures to ensure prompt consideration,

by majority vote of its members, of changes to accounting

principles necessary to reflect emerging accounting issues

and changing business practices; and

(v) considers, in adopting accounting principles, the need

to keep standards current in order to reflect changes in the

business environment, the extent to which international

convergence on high quality accounting standards is necessary

or appropriate in the public interest and for the protection

of investors; and

(B) that the Commission determines has the capacity to assist

the Commission in fulfilling the requirements of subsection (a)

of this section and section 78m(b) of this title, because, at a

minimum, the standard setting body is capable of improving the

accuracy and effectiveness of financial reporting and the

protection of investors under the securities laws.

(2) Annual report

A standard setting body described in paragraph (1) shall submit

an annual report to the Commission and the public, containing

audited financial statements of that standard setting body.

(c) Production of evidence

For the purpose of all investigations which, in the opinion of

the Commission, are necessary and proper for the enforcement of

this subchapter, any member of the Commission or any officer or

officers designated by it are empowered to administer oaths and

affirmations, subpena witnesses, take evidence, and require the

production of any books, papers, or other documents which the

Commission deems relevant or material to the inquiry. Such

attendance of witnesses and the production of such documentary

evidence may be required from any place in the United States or any

Territory at any designated place of hearing.

(d) Federal and State cooperation

(1) The Commission is authorized to cooperate with any

association composed of duly constituted representatives of State

governments whose primary assignment is the regulation of the

securities business within those States, and which, in the judgment

of the Commission, could assist in effectuating greater uniformity

in Federal-State securities matters. The Commission shall, at its

discretion, cooperate, coordinate, and share information with such

an association for the purposes of carrying out the policies and

projects set forth in paragraphs (2) and (3).

(2) It is the declared policy of this subsection that there

should be greater Federal and State cooperation in securities

matters, including -

(A) maximum effectiveness of regulation,

(B) maximum uniformity in Federal and State regulatory

standards,

(C) minimum interference with the business of capital

formation, and

(D) a substantial reduction in costs and paperwork to diminish

the burdens of raising investment capital (particularly by small

business) and to diminish the costs of the administration of the

Government programs involved.

(3) The purpose of this subsection is to engender cooperation

between the Commission, any such association of State securities

officials, and other duly constituted securities associations in

the following areas:

(A) the sharing of information regarding the registration or

exemption of securities issues applied for in the various States;

(B) the development and maintenance of uniform securities forms

and procedures; and

(C) the development of a uniform exemption from registration

for small issuers which can be agreed upon among several States

or between the States and the Federal Government. The Commission

shall have the authority to adopt such an exemption as agreed

upon for Federal purposes. Nothing in this chapter shall be

construed as authorizing preemption of State law.

(4) In order to carry out these policies and purposes, the

Commission shall conduct an annual conference as well as such other

meetings as are deemed necessary, to which representatives from

such securities associations, securities self-regulatory

organizations, agencies, and private organizations involved in

capital formation shall be invited to participate.

(5) For fiscal year 1982, and for each of the three succeeding

fiscal years, there are authorized to be appropriated such amounts

as may be necessary and appropriate to carry out the policies,

provisions, and purposes of this subsection. Any sums so

appropriated shall remain available until expended.

(6) Notwithstanding any other provision of law, neither the

Commission nor any other person shall be required to establish any

procedures not specifically required by the securities laws, as

that term is defined in section 78c(a)(47) of this title, or by

chapter 5 of title 5, in connection with cooperation, coordination,

or consultation with -

(A) any association referred to in paragraph (1) or (3) or any

conference or meeting referred to in paragraph (4), while such

association, conference, or meeting is carrying out activities in

furtherance of the provisions of this subsection; or

(B) any forum, agency, or organization, or group referred to in

section 80c-1 of this title, while such forum, agency,

organization, or group is carrying out activities in furtherance

of the provisions of such section 80c-1.

As used in this paragraph, the terms ''association'',

''conference'', ''meeting'', ''forum'', ''agency'',

''organization'', and ''group'' include any committee, subgroup, or

representative of such entities.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 19, 48 Stat. 85; June 6, 1934,

ch. 404, title II, Sec. 209, 48 Stat. 908; Pub. L. 94-210, title

III, Sec. 308(a)(2), Feb. 5, 1976, 90 Stat. 57; Pub. L. 96-477,

title V, Sec. 505, Oct. 21, 1980, 94 Stat. 2292; Pub. L. 100-181,

title II, Sec. 207, Dec. 4, 1987, 101 Stat. 1252; Pub. L. 107-204,

title I, Sec. 108(a), July 30, 2002, 116 Stat. 768.)

-MISC1-

AMENDMENTS

2002 - Subsecs. (b) to (d). Pub. L. 107-204 added subsec. (b) and

redesignated former subsecs. (b) and (c) as (c) and (d),

respectively.

1987 - Subsec. (c)(6). Pub. L. 100-181 added par. (6).

1980 - Subsec. (c). Pub. L. 96-477 added subsec. (c).

1976 - Subsec. (a). Pub. L. 94-210 struck out provisions relating

to rules and regulations applicable to any common carrier subject

to the provisions of section 20 of title 49.

1934 - Subsec. (a). Act June 6, 1934, inserted ''technical'' in

first sentence and inserted last sentence.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-477 effective Jan. 1, 1981, see section

507 of Pub. L. 96-477, set out as an Effective Date note under

section 80c of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-210 effective on 60th day after Feb. 5,

1976, but not applicable to any bona fide offering of a security

made by the issuer, or by or through an underwriter, before such

60th day, see section 308(d)(1) of Pub. L. 94-210, set out as a

note under section 77c of this title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 78u, 7201, 7218, 7219 of

this title.

-CITE-

15 USC Sec. 77t 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77t. Injunctions and prosecution of offenses

-STATUTE-

(a) Investigation of violations

Whenever it shall appear to the Commission, either upon complaint

or otherwise, that the provisions of this subchapter, or of any

rule or regulation prescribed under authority thereof, have been or

are about to be violated, it may, in its discretion, either require

or permit such person to file with it a statement in writing, under

oath, or otherwise, as to all the facts and circumstances

concerning the subject matter which it believes to be in the public

interest to investigate, and may investigate such facts.

(b) Action for injunction or criminal prosecution in district court

Whenever it shall appear to the Commission that any person is

engaged or about to engage in any acts or practices which

constitute or will constitute a violation of the provisions of this

subchapter, or of any rule or regulation prescribed under authority

thereof, the Commission may, in its discretion, bring an action in

any district court of the United States, or United States court of

any Territory, to enjoin such acts or practices, and upon a proper

showing, a permanent or temporary injunction or restraining order

shall be granted without bond. The Commission may transmit such

evidence as may be available concerning such acts or practices to

the Attorney General who may, in his discretion, institute the

necessary criminal proceedings under this subchapter. Any such

criminal proceeding may be brought either in the district wherein

the transmittal of the prospectus or security complained of begins,

or in the district wherein such prospectus or security is received.

(c) Writ of mandamus

Upon application of the Commission, the district courts of the

United States and the United States courts of any Territory shall

have jurisdiction to issue writs of mandamus commanding any person

to comply with the provisions of this subchapter or any order of

the Commission made in pursuance thereof.

(d) Money penalties in civil actions

(1) Authority of Commission

Whenever it shall appear to the Commission that any person has

violated any provision of this subchapter, the rules or

regulations thereunder, or a cease-and-desist order entered by

the Commission pursuant to section 77h-1 of this title, other

than by committing a violation subject to a penalty pursuant to

section 78u-1 of this title, the Commission may bring an action

in a United States district court to seek, and the court shall

have jurisdiction to impose, upon a proper showing, a civil

penalty to be paid by the person who committed such violation.

(2) Amount of penalty

(A) First tier

The amount of the penalty shall be determined by the court in

light of the facts and circumstances. For each violation, the

amount of the penalty shall not exceed the greater of (i)

$5,000 for a natural person or $50,000 for any other person, or

(ii) the gross amount of pecuniary gain to such defendant as a

result of the violation.

(B) Second tier

Notwithstanding subparagraph (A), the amount of penalty for

each such violation shall not exceed the greater of (i) $50,000

for a natural person or $250,000 for any other person, or (ii)

the gross amount of pecuniary gain to such defendant as a

result of the violation, if the violation described in

paragraph (1) involved fraud, deceit, manipulation, or

deliberate or reckless disregard of a regulatory requirement.

(C) Third tier

Notwithstanding subparagraphs (A) and (B), the amount of

penalty for each such violation shall not exceed the greater of

(i) $100,000 for a natural person or $500,000 for any other

person, or (ii) the gross amount of pecuniary gain to such

defendant as a result of the violation, if -

(I) the violation described in paragraph (1) involved

fraud, deceit, manipulation, or deliberate or reckless

disregard of a regulatory requirement; and

(II) such violation directly or indirectly resulted in

substantial losses or created a significant risk of

substantial losses to other persons.

(3) Procedures for collection

(A) Payment of penalty to Treasury

A penalty imposed under this section shall be payable into

the Treasury of the United States, except as otherwise provided

in section 7246 of this title.

(B) Collection of penalties

If a person upon whom such a penalty is imposed shall fail to

pay such penalty within the time prescribed in the court's

order, the Commission may refer the matter to the Attorney

General who shall recover such penalty by action in the

appropriate United States district court.

(C) Remedy not exclusive

The actions authorized by this subsection may be brought in

addition to any other action that the Commission or the

Attorney General is entitled to bring.

(D) Jurisdiction and venue

For purposes of section 77v of this title, actions under this

section shall be actions to enforce a liability or a duty

created by this subchapter.

(4) Special provisions relating to a violation of a

cease-and-desist order

In an action to enforce a cease-and-desist order entered by the

Commission pursuant to section 77h-1 of this title, each separate

violation of such order shall be a separate offense, except that

in the case of a violation through a continuing failure to comply

with such an order, each day of the failure to comply with the

order shall be deemed a separate offense.

(e) Authority of court to prohibit persons from serving as officers

and directors

In any proceeding under subsection (b) of this section, the court

may prohibit, conditionally or unconditionally, and permanently or

for such period of time as it shall determine, any person who

violated section 77q(a)(1) of this title from acting as an officer

or director of any issuer that has a class of securities registered

pursuant to section 78l of this title or that is required to file

reports pursuant to section 78o(d) of this title if the person's

conduct demonstrates unfitness to serve as an officer or director

of any such issuer.

(f) Prohibition of attorneys' fees paid from Commission

disgorgement funds

Except as otherwise ordered by the court upon motion by the

Commission, or, in the case of an administrative action, as

otherwise ordered by the Commission, funds disgorged as the result

of an action brought by the Commission in Federal court, or as a

result of any Commission administrative action, shall not be

distributed as payment for attorneys' fees or expenses incurred by

private parties seeking distribution of the disgorged funds.

(g) Authority of a court to prohibit persons from participating in

an offering of penny stock

(1) In general

In any proceeding under subsection (a) of this section against

any person participating in, or, at the time of the alleged

misconduct, who was participating in, an offering of penny stock,

the court may prohibit that person from participating in an

offering of penny stock, conditionally or unconditionally, and

permanently or for such period of time as the court shall

determine.

(2) Definition

For purposes of this subsection, the term ''person

participating in an offering of penny stock'' includes any person

engaging in activities with a broker, dealer, or issuer for

purposes of issuing, trading, or inducing or attempting to induce

the purchase or sale of, any penny stock. The Commission may, by

rule or regulation, define such term to include other activities,

and may, by rule, regulation, or order, exempt any person or

class of persons, in whole or in part, conditionally or

unconditionally, from inclusion in such term.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 20, 48 Stat. 86; Pub. L.

100-181, title II, Sec. 208, Dec. 4, 1987, 101 Stat. 1253; Pub. L.

101-429, title I, Sec. 101, Oct. 15, 1990, 104 Stat. 932; Pub. L.

104-67, title I, Sec. 103(b)(1), Dec. 22, 1995, 109 Stat. 756; Pub.

L. 107-204, title III, Sec. 305(a)(2), 308(d)(3), title VI, Sec.

603(b), July 30, 2002, 116 Stat. 779, 785, 795.)

-MISC1-

AMENDMENTS

2002 - Subsec. (d)(3)(A). Pub. L. 107-204, Sec. 308(d)(3),

inserted '', except as otherwise provided in section 7246 of this

title'' before period at end.

Subsec. (e). Pub. L. 107-204, Sec. 305(a)(2), substituted

''unfitness'' for ''substantial unfitness''.

Subsec. (g). Pub. L. 107-204, Sec. 603(b), added subsec. (g).

1995 - Subsec. (f). Pub. L. 104-67 added subsec. (f).

1990 - Subsecs. (d), (e). Pub. L. 101-429 added subsecs. (d) and

(e).

1987 - Subsec. (b). Pub. L. 100-181, Sec. 208(a), inserted first

sentence and struck out former first sentence containing similar

provisions.

Subsec. (c). Pub. L. 100-181, Sec. 208(b), amended subsec. (c)

generally.

EFFECTIVE DATE OF 1995 AMENDMENT

Amendment by Pub. L. 104-67 not to affect or apply to any private

action arising under this subchapter or title I of the Securities

Exchange Act of 1934 (15 U.S.C. 78a et seq.), commenced before and

pending on Dec. 22, 1995, see section 108 of Pub. L. 104-67, set

out as a note under section 77l of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by Pub. L. 101-429 effective Oct. 15, 1990, with

provisions relating to civil penalties and accounting and

disgorgement, see section 1(c)(1) and (2) of Pub. L. 101-429, set

out in a note under section 77g of this title.

CONSTRUCTION OF 1995 AMENDMENT

Nothing in amendment by Pub. L. 104-67 to be deemed to create or

ratify any implied right of action, or to prevent Commission, by

rule or regulation, from restricting or otherwise regulating

private actions under Securities Exchange Act of 1934 (15 U.S.C.

78a et seq.), see section 203 of Pub. L. 104-67, set out as a

Construction note under section 78j-1 of this title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 77uuu of this title.

-CITE-

15 USC Sec. 77u 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77u. Hearings by Commission

-STATUTE-

All hearings shall be public and may be held before the

Commission or an officer or officers of the Commission designated

by it, and appropriate records thereof shall be kept.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 21, 48 Stat. 86.)

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-CITE-

15 USC Sec. 77v 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77v. Jurisdiction of offenses and suits

-STATUTE-

(a) Federal and State courts; venue; service of process; review;

removal; costs

The district courts of the United States and the United States

courts of any Territory shall have jurisdiction of offenses and

violations under this subchapter and under the rules and

regulations promulgated by the Commission in respect thereto, and,

concurrent with State and Territorial courts, except as provided in

section 77p of this title with respect to covered class actions, of

all suits in equity and actions at law brought to enforce any

liability or duty created by this subchapter. Any such suit or

action may be brought in the district wherein the defendant is

found or is an inhabitant or transacts business, or in the district

where the offer or sale took place, if the defendant participated

therein, and process in such cases may be served in any other

district of which the defendant is an inhabitant or wherever the

defendant may be found. Judgments and decrees so rendered shall be

subject to review as provided in sections 1254, 1291, 1292, and

1294 of title 28. Except as provided in section 77p(c) of this

title, no case arising under this subchapter and brought in any

State court of competent jurisdiction shall be removed to any court

of the United States. No costs shall be assessed for or against the

Commission in any proceeding under this subchapter brought by or

against it in the Supreme Court or such other courts.

(b) Contumacy or refusal to obey subpena; contempt

In case of contumacy or refusal to obey a subpena issued to any

person, any of the said United States courts, within the

jurisdiction of which said person guilty of contumacy or refusal to

obey is found or resides, upon application by the Commission may

issue to such person an order requiring such person to appear

before the Commission, or one of its examiners designated by it,

there to produce documentary evidence if so ordered, or there to

give evidence touching the matter in question; and any failure to

obey such order of the court may be punished by said court as a

contempt thereof.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 22, 48 Stat. 86; June 25,

1936, ch. 804, 49 Stat. 1921; June 25, 1948, ch. 646, Sec. 32(b),

62 Stat. 991; May 24, 1949, ch. 139, Sec. 127, 63 Stat. 107; Aug.

10, 1954, ch. 667, title I, Sec. 11, 68 Stat. 686; Pub. L. 91-452,

title II, Sec. 213, Oct. 15, 1970, 84 Stat. 929; Pub. L. 100-181,

title II, Sec. 209, Dec. 4, 1987, 101 Stat. 1253; Pub. L. 105-353,

title I, Sec. 101(a)(3), Nov. 3, 1998, 112 Stat. 3230.)

-COD-

CODIFICATION

As originally enacted subsec. (a) contained references to the

Supreme Court of the District of Columbia. Act June 25, 1936,

substituted ''the district court of the United States for the

District of Columbia'' for ''the Supreme Court of the District of

Columbia'', and act June 25, 1948, as amended by act May 24, 1949,

substituted ''United States District Court for the District of

Columbia'' for ''district court of the United States for the

District of Columbia''. Pub. L. 100-181 struck out reference to the

United States District Court for the District of Columbia.

Previously, such reference had been editorially eliminated as

superfluous in view of section 132(a) of Title 28, Judiciary and

Judicial Procedure, which provides that ''There shall be in each

judicial district a district court which shall be a court of record

known as the United States District Court for the district'', and

section 88 of Title 28 which provides that ''the District of

Columbia constitutes one judicial district''.

-MISC3-

AMENDMENTS

1998 - Subsec. (a). Pub. L. 105-353 inserted ''except as provided

in section 77p of this title with respect to covered class

actions,'' after ''Territorial courts,'' in first sentence and

substituted ''Except as provided in section 77p(c) of this title,

no case'' for ''No case'' in penultimate sentence.

1987 - Subsec. (a). Pub. L. 100-181 substituted ''United States

and'' for ''United States, the'', struck out '', and the United

States District Court for the District of Columbia'' after

''Territory'', and substituted ''sections 1254, 1291, 1292, and

1294 of title 28'' for ''sections 128 and 240 of the Judicial Code,

as amended (U.S.C., title 28, secs. 225 and 347)''. See

Codification note above.

1970 - Subsec. (c). Pub. L. 91-452 struck out subsec. (c) which

related to immunity from prosecution of any individual compelled to

testify or produce evidence, documentary or otherwise, after

claiming his privilege against self-incrimination.

1954 - Subsec. (a). Act Aug. 10, 1954, inserted ''offer or''

before ''sale'' in second sentence.

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by Pub. L. 105-353 not to affect or apply to any action

commenced before and pending on Nov. 3, 1998, see section 101(c) of

Pub. L. 105-353, set out as a note under section 77p of this title.

EFFECTIVE DATE OF 1970 AMENDMENT

Amendment by Pub. L. 91-452 effective on sixtieth day following

Oct. 15, 1970, see section 260 of Pub. L. 91-452, set out as an

Effective Date; Savings Provision note under section 6001 of Title

18, Crimes and Criminal Procedure.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

SAVINGS PROVISION

Amendment by Pub. L. 91-452 not to affect any immunity to which

any individual is entitled under this section by reason of any

testimony given before the sixtieth day following Oct. 15, 1970,

see section 260 of Pub. L. 91-452, set out as an Effective Date;

Savings Provision note under section 6001 of Title 18, Crimes and

Criminal Procedure.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77t, 77uuu, 77vvv of this

title; title 7 section 1932.

-CITE-

15 USC Sec. 77w 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77w. Unlawful representations

-STATUTE-

Neither the fact that the registration statement for a security

has been filed or is in effect nor the fact that a stop order is

not in effect with respect thereto shall be deemed a finding by the

Commission that the registration statement is true and accurate on

its face or that it does not contain an untrue statement of fact or

omit to state a material fact, or be held to mean that the

Commission has in any way passed upon the merits of, or given

approval to, such security. It shall be unlawful to make, or cause

to be made to any prospective purchaser any representation contrary

to the foregoing provisions of this section.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 23, 48 Stat. 87.)

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-CITE-

15 USC Sec. 77x 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77x. Penalties

-STATUTE-

Any person who willfully violates any of the provisions of this

subchapter, or the rules and regulations promulgated by the

Commission under authority thereof, or any person who willfully, in

a registration statement filed under this subchapter, makes any

untrue statement of a material fact or omits to state any material

fact required to be stated therein or necessary to make the

statements therein not misleading, shall upon conviction be fined

not more than $10,000 or imprisoned not more than five years, or

both.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 24, 48 Stat. 87; Pub. L.

94-29, Sec. 27(a), June 4, 1975, 89 Stat. 163.)

-MISC1-

AMENDMENTS

1975 - Pub. L. 94-29 substituted ''$10,000'' for ''$5,000''.

EFFECTIVE DATE OF 1975 AMENDMENT

Amendment by Pub. L. 94-29 effective June 4, 1975, see section

31(a) of Pub. L. 94-29, set out as a note under section 78b of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 77eee of this title; title

7 section 1932.

-CITE-

15 USC Sec. 77y 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77y. Jurisdiction of other Government agencies over securities

-STATUTE-

Nothing in this subchapter shall relieve any person from

submitting to the respective supervisory units of the Government of

the United States information, reports, or other documents that may

be required by any provision of law.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 25, 48 Stat. 87.)

-CITE-

15 USC Sec. 77z 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77z. Separability

-STATUTE-

If any provision of this chapter, or the application of such

provision to any person or circumstance, shall be held invalid, the

remainder of this chapter, or the application of such provision to

persons or circumstances other than those as to which it is held

invalid, shall not be affected thereby.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 26, 48 Stat. 88.)

-CITE-

15 USC Sec. 77z-1 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77z-1. Private securities litigation

-STATUTE-

(a) Private class actions

(1) In general

The provisions of this subsection shall apply to each private

action arising under this subchapter that is brought as a

plaintiff class action pursuant to the Federal Rules of Civil

Procedure.

(2) Certification filed with complaint

(A) In general

Each plaintiff seeking to serve as a representative party on

behalf of a class shall provide a sworn certification, which

shall be personally signed by such plaintiff and filed with the

complaint, that -

(i) states that the plaintiff has reviewed the complaint

and authorized its filing;

(ii) states that the plaintiff did not purchase the

security that is the subject of the complaint at the

direction of plaintiff's counsel or in order to participate

in any private action arising under this subchapter;

(iii) states that the plaintiff is willing to serve as a

representative party on behalf of a class, including

providing testimony at deposition and trial, if necessary;

(iv) sets forth all of the transactions of the plaintiff in

the security that is the subject of the complaint during the

class period specified in the complaint;

(v) identifies any other action under this subchapter,

filed during the 3-year period preceding the date on which

the certification is signed by the plaintiff, in which the

plaintiff has sought to serve, or served, as a representative

party on behalf of a class; and

(vi) states that the plaintiff will not accept any payment

for serving as a representative party on behalf of a class

beyond the plaintiff's pro rata share of any recovery, except

as ordered or approved by the court in accordance with

paragraph (4).

(B) Nonwaiver of attorney-client privilege

The certification filed pursuant to subparagraph (A) shall

not be construed to be a waiver of the attorney-client

privilege.

(3) Appointment of lead plaintiff

(A) Early notice to class members

(i) In general

Not later than 20 days after the date on which the

complaint is filed, the plaintiff or plaintiffs shall cause

to be published, in a widely circulated national

business-oriented publication or wire service, a notice

advising members of the purported plaintiff class -

(I) of the pendency of the action, the claims asserted

therein, and the purported class period; and

(II) that, not later than 60 days after the date on which

the notice is published, any member of the purported class

may move the court to serve as lead plaintiff of the

purported class.

(ii) Multiple actions

If more than one action on behalf of a class asserting

substantially the same claim or claims arising under this

subchapter is filed, only the plaintiff or plaintiffs in the

first filed action shall be required to cause notice to be

published in accordance with clause (i).

(iii) Additional notices may be required under Federal rules

Notice required under clause (i) shall be in addition to

any notice required pursuant to the Federal Rules of Civil

Procedure.

(B) Appointment of lead plaintiff

(i) In general

Not later than 90 days after the date on which a notice is

published under subparagraph (A)(i), the court shall consider

any motion made by a purported class member in response to

the notice, including any motion by a class member who is not

individually named as a plaintiff in the complaint or

complaints, and shall appoint as lead plaintiff the member or

members of the purported plaintiff class that the court

determines to be most capable of adequately representing the

interests of class members (hereafter in this paragraph

referred to as the ''most adequate plaintiff'') in accordance

with this subparagraph.

(ii) Consolidated actions

If more than one action on behalf of a class asserting

substantially the same claim or claims arising under this

subchapter has been filed, and any party has sought to

consolidate those actions for pretrial purposes or for trial,

the court shall not make the determination required by clause

(i) until after the decision on the motion to consolidate is

rendered. As soon as practicable after such decision is

rendered, the court shall appoint the most adequate plaintiff

as lead plaintiff for the consolidated actions in accordance

with this subparagraph.

(iii) Rebuttable presumption

(I) In general

Subject to subclause (II), for purposes of clause (i),

the court shall adopt a presumption that the most adequate

plaintiff in any private action arising under this

subchapter is the person or group of persons that -

(aa) has either filed the complaint or made a motion in

response to a notice under subparagraph (A)(i);

(bb) in the determination of the court, has the largest

financial interest in the relief sought by the class; and

(cc) otherwise satisfies the requirements of Rule 23 of

the Federal Rules of Civil Procedure.

(II) Rebuttal evidence

The presumption described in subclause (I) may be

rebutted only upon proof by a member of the purported

plaintiff class that the presumptively most adequate

plaintiff -

(aa) will not fairly and adequately protect the

interests of the class; or

(bb) is subject to unique defenses that render such

plaintiff incapable of adequately representing the class.

(iv) Discovery

For purposes of this subparagraph, discovery relating to

whether a member or members of the purported plaintiff class

is the most adequate plaintiff may be conducted by a

plaintiff only if the plaintiff first demonstrates a

reasonable basis for a finding that the presumptively most

adequate plaintiff is incapable of adequately representing

the class.

(v) Selection of lead counsel

The most adequate plaintiff shall, subject to the approval

of the court, select and retain counsel to represent the

class.

(vi) Restrictions on professional plaintiffs

Except as the court may otherwise permit, consistent with

the purposes of this section, a person may be a lead

plaintiff, or an officer, director, or fiduciary of a lead

plaintiff, in no more than 5 securities class actions brought

as plaintiff class actions pursuant to the Federal Rules of

Civil Procedure during any 3-year period.

(4) Recovery by plaintiffs

The share of any final judgment or of any settlement that is

awarded to a representative party serving on behalf of a class

shall be equal, on a per share basis, to the portion of the final

judgment or settlement awarded to all other members of the

class. Nothing in this paragraph shall be construed to limit the

award of reasonable costs and expenses (including lost wages)

directly relating to the representation of the class to any

representative party serving on behalf of the class.

(5) Restrictions on settlements under seal

The terms and provisions of any settlement agreement of a class

action shall not be filed under seal, except that on motion of

any party to the settlement, the court may order filing under

seal for those portions of a settlement agreement as to which

good cause is shown for such filing under seal. For purposes of

this paragraph, good cause shall exist only if publication of a

term or provision of a settlement agreement would cause direct

and substantial harm to any party.

(6) Restrictions on payment of attorneys' fees and expenses

Total attorneys' fees and expenses awarded by the court to

counsel for the plaintiff class shall not exceed a reasonable

percentage of the amount of any damages and prejudgment interest

actually paid to the class.

(7) Disclosure of settlement terms to class members

Any proposed or final settlement agreement that is published or

otherwise disseminated to the class shall include each of the

following statements, along with a cover page summarizing the

information contained in such statements:

(A) Statement of plaintiff recovery

The amount of the settlement proposed to be distributed to

the parties to the action, determined in the aggregate and on

an average per share basis.

(B) Statement of potential outcome of case

(i) Agreement on amount of damages

If the settling parties agree on the average amount of

damages per share that would be recoverable if the plaintiff

prevailed on each claim alleged under this subchapter, a

statement concerning the average amount of such potential

damages per share.

(ii) Disagreement on amount of damages

If the parties do not agree on the average amount of

damages per share that would be recoverable if the plaintiff

prevailed on each claim alleged under this subchapter, a

statement from each settling party concerning the issue or

issues on which the parties disagree.

(iii) Inadmissibility for certain purposes

A statement made in accordance with clause (i) or (ii)

concerning the amount of damages shall not be admissible in

any Federal or State judicial action or administrative

proceeding, other than an action or proceeding arising out of

such statement.

(C) Statement of attorneys' fees or costs sought

If any of the settling parties or their counsel intend to

apply to the court for an award of attorneys' fees or costs

from any fund established as part of the settlement, a

statement indicating which parties or counsel intend to make

such an application, the amount of fees and costs that will be

sought (including the amount of such fees and costs determined

on an average per share basis), and a brief explanation

supporting the fees and costs sought.

(D) Identification of lawyers' representatives

The name, telephone number, and address of one or more

representatives of counsel for the plaintiff class who will be

reasonably available to answer questions from class members

concerning any matter contained in any notice of settlement

published or otherwise disseminated to the class.

(E) Reasons for settlement

A brief statement explaining the reasons why the parties are

proposing the settlement.

(F) Other information

Such other information as may be required by the court.

(8) Attorney conflict of interest

If a plaintiff class is represented by an attorney who directly

owns or otherwise has a beneficial interest in the securities

that are the subject of the litigation, the court shall make a

determination of whether such ownership or other interest

constitutes a conflict of interest sufficient to disqualify the

attorney from representing the plaintiff class.

(b) Stay of discovery; preservation of evidence

(1) In general

In any private action arising under this subchapter, all

discovery and other proceedings shall be stayed during the

pendency of any motion to dismiss, unless the court finds, upon

the motion of any party, that particularized discovery is

necessary to preserve evidence or to prevent undue prejudice to

that party.

(2) Preservation of evidence

During the pendency of any stay of discovery pursuant to this

subsection, unless otherwise ordered by the court, any party to

the action with actual notice of the allegations contained in the

complaint shall treat all documents, data compilations (including

electronically recorded or stored data), and tangible objects

that are in the custody or control of such person and that are

relevant to the allegations, as if they were the subject of a

continuing request for production of documents from an opposing

party under the Federal Rules of Civil Procedure.

(3) Sanction for willful violation

A party aggrieved by the willful failure of an opposing party

to comply with paragraph (2) may apply to the court for an order

awarding appropriate sanctions.

(4) Circumvention of stay of discovery

Upon a proper showing, a court may stay discovery proceedings

in any private action in a State court as necessary in aid of its

jurisdiction, or to protect or effectuate its judgments, in an

action subject to a stay of discovery pursuant to this

subsection.

(c) Sanctions for abusive litigation

(1) Mandatory review by court

In any private action arising under this subchapter, upon final

adjudication of the action, the court shall include in the record

specific findings regarding compliance by each party and each

attorney representing any party with each requirement of Rule

11(b) of the Federal Rules of Civil Procedure as to any

complaint, responsive pleading, or dispositive motion.

(2) Mandatory sanctions

If the court makes a finding under paragraph (1) that a party

or attorney violated any requirement of Rule 11(b) of the Federal

Rules of Civil Procedure as to any complaint, responsive

pleading, or dispositive motion, the court shall impose sanctions

on such party or attorney in accordance with Rule 11 of the

Federal Rules of Civil Procedure. Prior to making a finding that

any party or attorney has violated Rule 11 of the Federal Rules

of Civil Procedure, the court shall give such party or attorney

notice and an opportunity to respond.

(3) Presumption in favor of attorneys' fees and costs

(A) In general

Subject to subparagraphs (B) and (C), for purposes of

paragraph (2), the court shall adopt a presumption that the

appropriate sanction -

(i) for failure of any responsive pleading or dispositive

motion to comply with any requirement of Rule 11(b) of the

Federal Rules of Civil Procedure is an award to the opposing

party of the reasonable attorneys' fees and other expenses

incurred as a direct result of the violation; and

(ii) for substantial failure of any complaint to comply

with any requirement of Rule 11(b) of the Federal Rules of

Civil Procedure is an award to the opposing party of the

reasonable attorneys' fees and other expenses incurred in the

action.

(B) Rebuttal evidence

The presumption described in subparagraph (A) may be rebutted

only upon proof by the party or attorney against whom sanctions

are to be imposed that -

(i) the award of attorneys' fees and other expenses will

impose an unreasonable burden on that party or attorney and

would be unjust, and the failure to make such an award would

not impose a greater burden on the party in whose favor

sanctions are to be imposed; or

(ii) the violation of Rule 11(b) of the Federal Rules of

Civil Procedure was de minimis.

(C) Sanctions

If the party or attorney against whom sanctions are to be

imposed meets its burden under subparagraph (B), the court

shall award the sanctions that the court deems appropriate

pursuant to Rule 11 of the Federal Rules of Civil Procedure.

(d) Defendant's right to written interrogatories

In any private action arising under this subchapter in which the

plaintiff may recover money damages only on proof that a defendant

acted with a particular state of mind, the court shall, when

requested by a defendant, submit to the jury a written

interrogatory on the issue of each such defendant's state of mind

at the time the alleged violation occurred.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 27, as added Pub. L. 104-67,

title I, Sec. 101(a), Dec. 22, 1995, 109 Stat. 737; amended Pub. L.

105-353, title I, Sec. 101(a)(2), title III, Sec. 301(a)(5), Nov.

3, 1998, 112 Stat. 3230, 3235.)

-REFTEXT-

REFERENCES IN TEXT

The Federal Rules of Civil Procedure, referred to in subsecs.

(a)(1), (3)(A)(iii), (B)(iii)(I)(cc), (vi), (b)(2), and (c), are

set out in the Appendix to Title 28, Judiciary and Judicial

Procedure.

-MISC2-

AMENDMENTS

1998 - Pub. L. 105-353, Sec. 301(a)(5), made technical correction

relating to placement of section in subchapter.

Subsec. (b)(4). Pub. L. 105-353, Sec. 101(a)(2), added par. (4).

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by section 101(a)(2) of Pub. L. 105-353 not to affect

or apply to any action commenced before and pending on Nov. 3,

1998, see section 101(c) of Pub. L. 105-353, set out as a note

under section 77p of this title.

EFFECTIVE DATE

Section not to affect or apply to any private action arising

under this subchapter or title I of the Securities Exchange Act of

1934 (15 U.S.C. 78a et seq.), commenced before and pending on Dec.

22, 1995, see section 108 of Pub. L. 104-67, set out as an

Effective Date of 1995 Amendment note under section 77l of this

title.

CONSTRUCTION

Nothing in section to be deemed to create or ratify any implied

right of action, or to prevent Commission, by rule or regulation,

from restricting or otherwise regulating private actions under

Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), see

section 203 of Pub. L. 104-67, set out as a note under section

78j-1 of this title.

-CITE-

15 USC Sec. 77z-2 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77z-2. Application of safe harbor for forward-looking

statements

-STATUTE-

(a) Applicability

This section shall apply only to a forward-looking statement made

by -

(1) an issuer that, at the time that the statement is made, is

subject to the reporting requirements of section 78m(a) or

section 78o(d) of this title;

(2) a person acting on behalf of such issuer;

(3) an outside reviewer retained by such issuer making a

statement on behalf of such issuer; or

(4) an underwriter, with respect to information provided by

such issuer or information derived from information provided by

the issuer.

(b) Exclusions

Except to the extent otherwise specifically provided by rule,

regulation, or order of the Commission, this section shall not

apply to a forward-looking statement -

(1) that is made with respect to the business or operations of

the issuer, if the issuer -

(A) during the 3-year period preceding the date on which the

statement was first made -

(i) was convicted of any felony or misdemeanor described in

clauses (i) through (iv) of section 78o(b)(4)(B) of this

title; or

(ii) has been made the subject of a judicial or

administrative decree or order arising out of a governmental

action that -

(I) prohibits future violations of the antifraud

provisions of the securities laws;

(II) requires that the issuer cease and desist from

violating the antifraud provisions of the securities laws;

or

(III) determines that the issuer violated the antifraud

provisions of the securities laws;

(B) makes the forward-looking statement in connection with an

offering of securities by a blank check company;

(C) issues penny stock;

(D) makes the forward-looking statement in connection with a

rollup transaction; or

(E) makes the forward-looking statement in connection with a

going private transaction; or

(2) that is -

(A) included in a financial statement prepared in accordance

with generally accepted accounting principles;

(B) contained in a registration statement of, or otherwise

issued by, an investment company;

(C) made in connection with a tender offer;

(D) made in connection with an initial public offering;

(E) made in connection with an offering by, or relating to

the operations of, a partnership, limited liability company, or

a direct participation investment program; or

(F) made in a disclosure of beneficial ownership in a report

required to be filed with the Commission pursuant to section

78m(d) of this title.

(c) Safe harbor

(1) In general

Except as provided in subsection (b) of this section, in any

private action arising under this subchapter that is based on an

untrue statement of a material fact or omission of a material

fact necessary to make the statement not misleading, a person

referred to in subsection (a) of this section shall not be liable

with respect to any forward-looking statement, whether written or

oral, if and to the extent that -

(A) the forward-looking statement is -

(i) identified as a forward-looking statement, and is

accompanied by meaningful cautionary statements identifying

important factors that could cause actual results to differ

materially from those in the forward-looking statement; or

(ii) immaterial; or

(B) the plaintiff fails to prove that the forward-looking

statement -

(i) if made by a natural person, was made with actual

knowledge by that person that the statement was false or

misleading; or

(ii) if made by a business entity; (FOOTNOTE 1) was -

(FOOTNOTE 1) So in original. The semicolon probably should be a

comma.

(I) made by or with the approval of an executive officer

of that entity, and

(II) made or approved by such officer with actual

knowledge by that officer that the statement was false or

misleading.

(2) Oral forward-looking statements

In the case of an oral forward-looking statement made by an

issuer that is subject to the reporting requirements of section

78m(a) or section 78o(d) of this title, or by a person acting on

behalf of such issuer, the requirement set forth in paragraph

(1)(A) shall be deemed to be satisfied -

(A) if the oral forward-looking statement is accompanied by a

cautionary statement -

(i) that the particular oral statement is a forward-looking

statement; and

(ii) that the actual results could differ materially from

those projected in the forward-looking statement; and

(B) if -

(i) the oral forward-looking statement is accompanied by an

oral statement that additional information concerning factors

that could cause actual results to differ materially from

those in the forward-looking statement is contained in a

readily available written document, or portion thereof;

(ii) the accompanying oral statement referred to in clause

(i) identifies the document, or portion thereof, that

contains the additional information about those factors

relating to the forward-looking statement; and

(iii) the information contained in that written document is

a cautionary statement that satisfies the standard

established in paragraph (1)(A).

(3) Availability

Any document filed with the Commission or generally

disseminated shall be deemed to be readily available for purposes

of paragraph (2).

(4) Effect on other safe harbors

The exemption provided for in paragraph (1) shall be in

addition to any exemption that the Commission may establish by

rule or regulation under subsection (g) of this section.

(d) Duty to update

Nothing in this section shall impose upon any person a duty to

update a forward-looking statement.

(e) Dispositive motion

On any motion to dismiss based upon subsection (c)(1) of this

section, the court shall consider any statement cited in the

complaint and cautionary statement accompanying the forward-looking

statement, which are not subject to material dispute, cited by the

defendant.

(f) Stay pending decision on motion

In any private action arising under this subchapter, the court

shall stay discovery (other than discovery that is specifically

directed to the applicability of the exemption provided for in this

section) during the pendency of any motion by a defendant for

summary judgment that is based on the grounds that -

(1) the statement or omission upon which the complaint is based

is a forward-looking statement within the meaning of this

section; and

(2) the exemption provided for in this section precludes a

claim for relief.

(g) Exemption authority

In addition to the exemptions provided for in this section, the

Commission may, by rule or regulation, provide exemptions from or

under any provision of this subchapter, including with respect to

liability that is based on a statement or that is based on

projections or other forward-looking information, if and to the

extent that any such exemption is consistent with the public

interest and the protection of investors, as determined by the

Commission.

(h) Effect on other authority of Commission

Nothing in this section limits, either expressly or by

implication, the authority of the Commission to exercise similar

authority or to adopt similar rules and regulations with respect to

forward-looking statements under any other statute under which the

Commission exercises rulemaking authority.

(i) Definitions

For purposes of this section, the following definitions shall

apply:

(1) Forward-looking statement

The term ''forward-looking statement'' means -

(A) a statement containing a projection of revenues, income

(including income loss), earnings (including earnings loss) per

share, capital expenditures, dividends, capital structure, or

other financial items;

(B) a statement of the plans and objectives of management for

future operations, including plans or objectives relating to

the products or services of the issuer;

(C) a statement of future economic performance, including any

such statement contained in a discussion and analysis of

financial condition by the management or in the results of

operations included pursuant to the rules and regulations of

the Commission;

(D) any statement of the assumptions underlying or relating

to any statement described in subparagraph (A), (B), or (C);

(E) any report issued by an outside reviewer retained by an

issuer, to the extent that the report assesses a

forward-looking statement made by the issuer; or

(F) a statement containing a projection or estimate of such

other items as may be specified by rule or regulation of the

Commission.

(2) Investment company

The term ''investment company'' has the same meaning as in

section 80a-3(a) of this title.

(3) Penny stock

The term ''penny stock'' has the same meaning as in section

78c(a)(51) of this title, and the rules and regulations, or

orders issued pursuant to that section.

(4) Going private transaction

The term ''going private transaction'' has the meaning given

that term under the rules or regulations of the Commission issued

pursuant to section 78m(e) of this title.

(5) Securities laws

The term ''securities laws'' has the same meaning as in section

78c of this title.

(6) Person acting on behalf of an issuer

The term ''person acting on behalf of an issuer'' means an

officer, director, or employee of the issuer.

(7) Other terms

The terms ''blank check company'', ''rollup transaction'',

''partnership'', ''limited liability company'', ''executive

officer of an entity'' and ''direct participation investment

program'', have the meanings given those terms by rule or

regulation of the Commission.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 27A, as added Pub. L. 104-67,

title I, Sec. 102(a), Dec. 22, 1995, 109 Stat. 749; amended Pub. L.

105-353, title III, Sec. 301(a)(5), Nov. 3, 1998, 112 Stat. 3235.)

-MISC1-

AMENDMENTS

1998 - Pub. L. 105-353 made technical correction relating to

placement of section in subchapter.

EFFECTIVE DATE

Section not to affect or apply to any private action arising

under this subchapter or title I of the Securities Exchange Act of

1934 (15 U.S.C. 78a et seq.), commenced before and pending on Dec.

22, 1995, see section 108 of Pub. L. 104-67, set out as an

Effective Date of 1995 Amendment note under section 77l of this

title.

CONSTRUCTION

Nothing in section deemed to create or ratify any implied right

of action, or to prevent Commission, by rule or regulation, from

restricting or otherwise regulating private actions under

Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), see

section 203 of Pub. L. 104-67, set out as a note under section

78j-1 of this title.

-CITE-

15 USC Sec. 77z-3 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77z-3. General exemptive authority

-STATUTE-

The Commission, by rule or regulation, may conditionally or

unconditionally exempt any person, security, or transaction, or any

class or classes of persons, securities, or transactions, from any

provision or provisions of this subchapter or of any rule or

regulation issued under this subchapter, to the extent that such

exemption is necessary or appropriate in the public interest, and

is consistent with the protection of investors.

-SOURCE-

(May 27, 1933, ch. 38, title I, Sec. 28, as added Pub. L. 104-290,

title I, Sec. 105(a), Oct. 11, 1996, 110 Stat. 3424; amended Pub.

L. 105-353, title III, Sec. 301(a)(5), Nov. 3, 1998, 112 Stat.

3235.)

-MISC1-

AMENDMENTS

1998 - Pub. L. 105-353 made technical correction relating to

placement of section in subchapter.

-CITE-

15 USC Sec. 77aa 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER I - DOMESTIC SECURITIES

-HEAD-

Sec. 77aa. Schedule of information required in registration

statement

-STATUTE-

SCHEDULE A

(1) The name under which the issuer is doing or intends to do

business;

(2) the name of the State or other sovereign power under which

the issuer is organized;

(3) the location of the issuer's principal business office, and

if the issuer is a foreign or territorial person, the name and

address of its agent in the United States authorized to receive

notice;

(4) the names and addresses of the directors or persons

performing similar functions, and the chief executive, financial

and accounting officers, chosen or to be chosen if the issuer be a

corporation, association, trust, or other entity; of all partners,

if the issuer be a partnership; and of the issuer, if the issuer be

an individual; and of the promoters in the case of a business to be

formed, or formed within two years prior to the filing of the

registration statement;

(5) the names and addresses of the underwriters;

(6) the names and addresses of all persons, if any, owning of

record or beneficially, if known, more than 10 per centum of any

class of stock of the issuer, or more than 10 per centum in the

aggregate of the outstanding stock of the issuer as of a date

within twenty days prior to the filing of the registration

statement;

(7) the amount of securities of the issuer held by any person

specified in paragraphs (4), (5), and (6) of this schedule, as of a

date within twenty days prior to the filing of the registration

statement, and, if possible, as of one year prior thereto, and the

amount of the securities, for which the registration statement is

filed, to which such persons have indicated their intention to

subscribe;

(8) the general character of the business actually transacted or

to be transacted by the issuer;

(9) a statement of the capitalization of the issuer, including

the authorized and outstanding amounts of its capital stock and the

proportion thereof paid up, the number and classes of shares in

which such capital stock is divided, par value thereof, or if it

has no par value, the stated or assigned value thereof, a

description of the respective voting rights, preferences,

conversion and exchange rights, rights to dividends, profits, or

capital of each class, with respect to each other class, including

the retirement and liquidation rights or values thereof;

(10) a statement of the securities, if any, covered by options

outstanding or to be created in connection with the security to be

offered, together with the names and addresses of all persons, if

any, to be allotted more than 10 per centum in the aggregate of

such options;

(11) the amount of capital stock of each class issued or included

in the shares of stock to be offered;

(12) the amount of the funded debt outstanding and to be created

by the security to be offered, with a brief description of the

date, maturity, and character of such debt, rate of interest,

character of amortization provisions, and the security, if any,

therefor. If substitution of any security is permissible, a

summarized statement of the conditions under which such

substitution is permitted. If substitution is permissible without

notice, a specific statement to that effect;

(13) the specific purposes in detail and the approximate amounts

to be devoted to such purposes, so far as determinable, for which

the security to be offered is to supply funds, and if the funds are

to be raised in part from other sources, the amounts thereof and

the sources thereof, shall be stated;

(14) the remuneration, paid or estimated to be paid, by the

issuer or its predecessor, directly or indirectly, during the past

year and ensuing year to (a) the directors or persons performing

similar functions, and (b) its officers and other persons, naming

them wherever such remuneration exceeded $25,000 during any such

year;

(15) the estimated net proceeds to be derived from the security

to be offered;

(16) the price at which it is proposed that the security shall be

offered to the public or the method by which such price is computed

and any variation therefrom at which any portion of such security

is proposed to be offered to any persons or classes of persons,

other than the underwriters, naming them or specifying the class.

A variation in price may be proposed prior to the date of the

public offering of the security, but the Commission shall

immediately be notified of such variation;

(17) all commissions or discounts paid or to be paid, directly or

indirectly, by the issuer to the underwriters in respect of the

sale of the security to be offered. Commissions shall include all

cash, securities, contracts, or anything else of value, paid, to be

set aside, disposed of, or understandings with or for the benefit

of any other persons in which any underwriter is interested, made,

in connection with the sale of such security. A commission paid or

to be paid in connection with the sale of such security by a person

in which the issuer has an interest or which is controlled or

directed by, or under common control with, the issuer shall be

deemed to have been paid by the issuer. Where any such commission

is paid the amount of such commission paid to each underwriter

shall be stated;

(18) the amount or estimated amounts, itemized in reasonable

detail, of expenses, other than commissions specified in paragraph

(17) of this schedule, incurred or borne by or for the account of

the issuer in connection with the sale of the security to be

offered or properly chargeable thereto, including legal,

engineering, certification, authentication, and other charges;

(19) the net proceeds derived from any security sold by the

issuer during the two years preceding the filing of the

registration statement, the price at which such security was

offered to the public, and the names of the principal underwriters

of such security;

(20) any amount paid within two years preceding the filing of the

registration statement or intended to be paid to any promoter and

the consideration for any such payment;

(21) the names and addresses of the vendors and the purchase

price of any property, or good will, acquired or to be acquired,

not in the ordinary course of business, which is to be defrayed in

whole or in part from the proceeds of the security to be offered,

the amount of any commission payable to any person in connection

with such acquisition, and the name or names of such person or

persons, together with any expense incurred or to be incurred in

connection with such acquisition, including the cost of borrowing

money to finance such acquisition;

(22) full particulars of the nature and extent of the interest,

if any, of every director, principal executive officer, and of

every stockholder holding more than 10 per centum of any class of

stock or more than 10 per centum in the aggregate of the stock of

the issuer, in any property acquired, not in the ordinary course of

business of the issuer, within two years preceding the filing of

the registration statement or proposed to be acquired at such date;

(23) the names and addresses of counsel who have passed on the

legality of the issue;

(24) dates of and parties to, and the general effect concisely

stated of every material contract made, not in the ordinary course

of business, which contract is to be executed in whole or in part

at or after the filing of the registration statement or which

contract has been made not more than two years before such filing.

Any management contract or contract providing for special bonuses

or profit-sharing arrangements, and every material patent or

contract for a material patent right, and every contract by or with

a public utility company or an affiliate thereof, providing for the

giving or receiving of technical or financial advice or service (if

such contract may involve a charge to any party thereto at a rate

in excess of $2,500 per year in cash or securities or anything else

of value), shall be deemed a material contract;

(25) a balance sheet as of a date not more than ninety days prior

to the date of the filing of the registration statement showing all

of the assets of the issuer, the nature and cost thereof, whenever

determinable, in such detail and in such form as the Commission

shall prescribe (with intangible items segregated), including any

loan in excess of $20,000 to any officer, director, stockholder or

person directly or indirectly controlling or controlled by the

issuer, or person under direct or indirect common control with the

issuer. All the liabilities of the issuer in such detail and such

form as the Commission shall prescribe, including surplus of the

issuer showing how and from what sources such surplus was created,

all as of a date not more than ninety days prior to the filing of

the registration statement. If such statement be not certified by

an independent public or certified accountant, in addition to the

balance sheet required to be submitted under this schedule, a

similar detailed balance sheet of the assets and liabilities of the

issuer, certified by an independent public or certified accountant,

of a date not more than one year prior to the filing of the

registration statement, shall be submitted;

(26) a profit and loss statement of the issuer showing earnings

and income, the nature and source thereof, and the expenses and

fixed charges in such detail and such form as the Commission shall

prescribe for the latest fiscal year for which such statement is

available and for the two preceding fiscal years, year by year, or,

if such issuer has been in actual business for less than three

years, then for such time as the issuer has been in actual

business, year by year. If the date of the filing of the

registration statement is more than six months after the close of

the last fiscal year, a statement from such closing date to the

latest practicable date. Such statement shall show what the

practice of the issuer has been during the three years or lesser

period as to the character of the charges, dividends or other

distributions made against its various surplus accounts, and as to

depreciation, depletion, and maintenance charges, in such detail

and form as the Commission shall prescribe, and if stock dividends

or avails from the sale of rights have been credited to income,

they shall be shown separately with a statement of the basis upon

which the credit is computed. Such statement shall also

differentiate between any recurring and nonrecurring income and

between any investment and operating income. Such statement shall

be certified by an independent public or certified accountant;

(27) if the proceeds, or any part of the proceeds, of the

security to be issued is to be applied directly or indirectly to

the purchase of any business, a profit and loss statement of such

business certified by an independent public or certified

accountant, meeting the requirements of paragraph (26) of this

schedule, for the three preceding fiscal years, together with a

balance sheet, similarly certified, of such business, meeting the

requirements of paragraph (25) of this schedule of a date not more

than ninety days prior to the filing of the registration statement

or at the date such business was acquired by the issuer if the

business was acquired by the issuer more than ninety days prior to

the filing of the registration statement;

(28) a copy of any agreement or agreements (or, if identical

agreements are used, the forms thereof) made with any underwriter,

including all contracts and agreements referred to in paragraph

(17) of this schedule;

(29) a copy of the opinion or opinions of counsel in respect to

the legality of the issue, with a translation of such opinion, when

necessary, into the English language;

(30) a copy of all material contracts referred to in paragraph

(24) of this schedule, but no disclosure shall be required of any

portion of any such contract if the Commission determines that

disclosure of such portion would impair the value of the contract

and would not be necessary for the protection of the investors;

(31) unless previously filed and registered under the provisions

of this subchapter, and brought up to date, (a) a copy of its

articles of incorporation, with all amendments thereof and of its

existing bylaws or instruments corresponding thereto, whatever the

name, if the issuer be a corporation; (b) copy of all instruments

by which the trust is created or declared, if the issuer is a

trust; (c) a copy of its articles of partnership or association and

all other papers pertaining to its organization, if the issuer is a

partnership, unincorporated association, joint-stock company, or

any other form of organization; and

(32) a copy of the underlying agreements or indentures affecting

any stock, bonds, or debentures offered or to be offered.

In case of certificates of deposit, voting trust certificates,

collateral trust certificates, certificates of interest or shares

in unincorporated investment trusts, equipment trust certificates,

interim or other receipts for certificates, and like securities,

the Commission shall establish rules and regulations requiring the

submission of information of a like character applicable to such

cases, together with such other information as it may deem

appropriate and necessary regarding the character, financial or

otherwise, of the actual issuer of the securities and/or the person

performing the acts and assuming the duties of depositor or

manager.

SCHEDULE B

(1) Name of borrowing government or subdivision thereof;

(2) specific purposes in detail and the approximate amounts to be

devoted to such purposes, so far as determinable, for which the

security to be offered is to supply funds, and if the funds are to

be raised in part from other sources, the amounts thereof and the

sources thereof, shall be stated;

(3) the amount of the funded debt and the estimated amount of the

floating debt outstanding and to be created by the security to be

offered, excluding intergovernmental debt, and a brief description

of the date, maturity, character of such debt, rate of interest,

character of amortization provisions, and the security, if any,

therefor. If substitution of any security is permissible, a

statement of the conditions under which such substitution is

permitted. If substitution is permissible without notice, a

specific statement to that effect;

(4) whether or not the issuer or its predecessor has, within a

period of twenty years prior to the filing of the registration

statement, defaulted on the principal or interest of any external

security, excluding intergovernmental debt, and, if so, the date,

amount, and circumstances of such default, and the terms of the

succeeding arrangement, if any;

(5) the receipts, classified by source, and the expenditures,

classified by purpose, in such detail and form as the Commission

shall prescribe for the latest fiscal year for which such

information is available and the two preceding fiscal years, year

by year;

(6) the names and addresses of the underwriters;

(7) the name and address of its authorized agent, if any, in the

United States;

(8) the estimated net proceeds to be derived from the sale in the

United States of the security to be offered;

(9) the price at which it is proposed that the security shall be

offered in the United States to the public or the method by which

such price is computed. A variation in price may be proposed prior

to the date of the public offering of the security, but the

Commission shall immediately be notified of such variation;

(10) all commissions paid or to be paid, directly or indirectly,

by the issuer to the underwriters in respect of the sale of the

security to be offered. Commissions shall include all cash,

securities, contracts, or anything else of value, paid, to be set

aside, disposed of, or understandings with or for the benefit of

any other persons in which the underwriter is interested, made, in

connection with the sale of such security. Where any such

commission is paid, the amount of such commission paid to each

underwriter shall be stated;

(11) the amount or estimated amounts, itemized in reasonable

detail, of expenses, other than the commissions specified in

paragraph (10) of this schedule, incurred or borne by or for the

account of the issuer in connection with the sale of the security

to be offered or properly chargeable thereto, including legal,

engineering, certification, and other charges;

(12) the names and addresses of counsel who have passed upon the

legality of the issue;

(13) a copy of any agreement or agreements made with any

underwriter governing the sale of the security within the United

States; and

(14) an agreement of the issuer to furnish a copy of the opinion

or opinions of counsel in respect to the legality of the issue,

with a translation, where necessary, into the English language.

Such opinion shall set out in full all laws, decrees, ordinances,

or other acts of Government under which the issue of such security

has been authorized.

-SOURCE-

(May 27, 1933, ch. 38, title I, schedules A, B, 48 Stat. 88, 91;

Pub. L. 105-353, title III, Sec. 301(a)(6), Nov. 3, 1998, 112 Stat.

3235.)

-MISC1-

AMENDMENTS

1998 - Schedule A, par. (28). Pub. L. 105-353 substituted

''identical'' for ''identic''.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77g, 77j, 80a-24 of this

title.

-CITE-

15 USC SUBCHAPTER II - FOREIGN SECURITIES 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

.

-HEAD-

SUBCHAPTER II - FOREIGN SECURITIES

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in title 25 section 646.

-CITE-

15 USC Sec. 77bb 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77bb. ''Corporation of Foreign Security Holders''; creation;

principal office; branch offices

-STATUTE-

For the purpose of protecting, conserving, and advancing the

interests of the holders of foreign securities in default, there is

hereby created a body corporate with the name ''Corporation of

Foreign Security Holders'' (herein called the ''Corporation''). The

principal office of the Corporation shall be located in the

District of Columbia, but there may be established agencies or

branch offices in any city or cities of the United States under

rules and regulations prescribed by the board of directors.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 201, 48 Stat. 92.)

-CITE-

15 USC Sec. 77cc 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77cc. Directors of Corporation; appointment, term of office,

and removal

-STATUTE-

The control and management of the Corporation shall be vested in

a board of six directors, who shall be appointed and hold office in

the following manner: As soon as practicable after the date this

chapter takes effect the Federal Trade Commission (hereinafter in

this subchapter called ''Commission'') shall appoint six directors,

and shall designate a chairman and a vice chairman from among their

number. After the directors designated as chairman and vice

chairman cease to be directors, their successors as chairman and

vice chairman shall be elected by the board of directors itself.

Of the directors first appointed, two shall continue in office for

a term of two years, two for a term of four years, and two for a

term of six years, from the date this chapter takes effect, the

term of each to be designated by the Commission at the time of

appointment. Their successors shall be appointed by the

Commission, each for a term of six years from the date of the

expiration of the term for which his predecessor was appointed,

except that any person appointed to fill a vacancy occurring prior

to the expiration of the term for which his predecessor was

appointed shall be appointed only for the unexpired term of such

predecessor. No person shall be eligible to serve as a director

who within the five years preceding has had any interest, direct or

indirect, in any corporation, company, partnership, bank, or

association which has sold or offered for sale any foreign

securities. The office of a director shall be vacated if the board

of directors shall, at a meeting specially convened for that

purpose, by resolution passed by a majority of at least two-thirds

of the board of directors, remove such member from office, provided

that the member whom it is proposed to remove shall have seven

days' notice sent to him of such meeting, and that he may be heard.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 202, 48 Stat. 93.)

-CITE-

15 USC Sec. 77dd 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77dd. Powers and duties of Corporation, generally

-STATUTE-

The Corporation shall have power to adopt, alter, and use a

corporate seal; to make contracts; to lease such real estate as may

be necessary for the transaction of its business; to sue and be

sued, to complain and to defend, in any court of competent

jurisdiction, State or Federal; to require from trustees, financial

agents, or dealers in foreign securities information relative to

the original or present holders of foreign securities and such

other information as may be required, and to issue subpenas

therefor; to take over the functions of any fiscal and paying

agents of any foreign securities in default; to borrow money for

the purposes of this subchapter, and to pledge as collateral for

such loans any securities deposited with the Corporation pursuant

to this subchapter; by and with the consent and approval of the

Commission to select, employ, and fix the compensation of officers,

directors, members of committees, employees, attorneys, and agents

of the Corporation, without regard to the provisions of other laws

applicable to the employment and compensation of officers or

employees of the United States; to define their authority and

duties, require bonds of them and fix the penalties thereof, and to

dismiss at pleasure such officers, employees, attorneys, and

agents; and to prescribe, amend, and repeal, by its board of

directors, bylaws, rules, and regulations governing the manner in

which its general business may be conducted and the powers granted

to it by law may be exercised and enjoyed, together with provisions

for such committees and the functions thereof as the board of

directors may deem necessary for facilitating its business under

this subchapter. The board of directors of the Corporation shall

determine and prescribe the manner in which its obligations shall

be incurred and its expenses allowed and paid.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 203, 48 Stat. 93.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 77hh of this title.

-CITE-

15 USC Sec. 77ee 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77ee. Directors of Corporation, powers and duties generally

-STATUTE-

The board of directors may -

(1) Convene meetings of holders of foreign securities.

(2) Invite the deposit and undertake the custody of foreign

securities which have defaulted in the payment either of

principal or interest, and issue receipts or certificates in the

place of securities so deposited.

(3) Appoint committees from the directors of the Corporation

and/or all other persons to represent holders of any class or

classes of foreign securities which have defaulted in the payment

either of principal or interest and determine and regulate the

functions of such committees. The chairman and vice chairman of

the board of directors shall be ex officio chairman and vice

chairman of each committee.

(4) Negotiate and carry out, or assist in negotiating and

carrying out, arrangements for the resumption of payments due or

in arrears in respect of any foreign securities in default or for

rearranging the terms on which such securities may in future be

held or for converting and exchanging the same for new securities

or for any other object in relation thereto; and under this

paragraph any plan or agreement made with respect to such

securities shall be binding upon depositors, providing that the

consent of holders resident in the United States of 60 per centum

of the securities deposited with the Corporation shall be

obtained.

(5) Undertake, superintend, or take part in the collection and

application of funds derived from foreign securities which come

into the possession of or under the control or management of the

Corporation.

(6) Collect, preserve, publish, circulate, and render available

in readily accessible form, when deemed essential or necessary,

documents, statistics, reports, and information of all kinds in

respect of foreign securities, including particularly records of

foreign external securities in default and records of the

progress made toward the payment of past-due obligations.

(7) Take such steps as it may deem expedient with the view of

securing the adoption of clear and simple forms of foreign

securities and just and sound principles in the conditions and

terms thereof.

(8) Generally, act in the name and on behalf of the holders of

foreign securities the care or representation of whose interests

may be entrusted to the Corporation; conserve and protect the

rights and interests of holders of foreign securities issued,

sold, or owned in the United States; adopt measures for the

protection, vindication, and preservation or reservation of the

rights and interests of holders of foreign securities either on

any default in or on breach or contemplated breach of the

conditions on which such foreign securities may have been issued,

or otherwise; obtain for such holders such legal and other

assistance and advice as the board of directors may deem

expedient; and do all such other things as are incident or

conducive to the attainment of the above objects.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 204, 48 Stat. 94.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 77hh of this title.

-CITE-

15 USC Sec. 77ff 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77ff. Accounts and annual balance sheet of Corporation; audits

-STATUTE-

The board of directors shall cause accounts to be kept of all

matters relating to or connected with the transactions and business

of the Corporation, and cause a general account and balance sheet

of the Corporation to be made out in each year, and cause all

accounts to be audited by one or more auditors who shall examine

the same and report thereon to the board of directors.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 205, 48 Stat. 94.)

-CITE-

15 USC Sec. 77gg 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77gg. Annual report by Corporation; printing and distribution

-STATUTE-

The Corporation shall make, print, and make public an annual

report of its operations during each year, send a copy thereof,

together with a copy of the account and balance sheet and auditor's

report, to the Commission and to both Houses of Congress, and

provide one copy of such report but not more than one on the

application of any person and on receipt of a sum not exceeding $1:

Provided, That the board of directors in its discretion may

distribute copies gratuitously.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 206, 48 Stat. 95.)

-CITE-

15 USC Sec. 77hh 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77hh. Assessments by Corporation on holders of foreign

securities

-STATUTE-

The Corporation may in its discretion levy charges, assessed on a

pro rata basis, on the holders of foreign securities deposited with

it: Provided, That any charge levied at the time of depositing

securities with the Corporation shall not exceed one fifth of 1 per

centum of the face value of such securities: Provided further, That

any additional charges shall bear a close relationship to the cost

of operations and negotiations including those enumerated in

sections 77dd and 77ee of this title and shall not exceed 1 per

centum of the face value of such securities.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 207, 48 Stat. 95.)

-CITE-

15 USC Sec. 77ii 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77ii. Subscriptions accepted by Corporation as loans;

repayment

-STATUTE-

The Corporation may receive subscriptions from any person,

foundation with a public purpose, or agency of the United States

Government, and such subscriptions may, in the discretion of the

board of directors, be treated as loans repayable when and as the

board of directors shall determine.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 208, 48 Stat. 95.)

-CITE-

15 USC Sec. 77jj 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77jj. Loans to Corporation from Reconstruction Finance

Corporation authorized

-STATUTE-

The Reconstruction Finance Corporation is authorized to loan out

of its funds not to exceed $75,000 for the use of the Corporation.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 209, 48 Stat. 95.)

-TRANS-

ABOLITION OF RECONSTRUCTION FINANCE CORPORATION

Section 6(a) of Reorg. Plan No. 1 of 1957, eff. June 30, 1957,

22 F.R. 4633, 71 Stat. 647, set out as a note under section 601 of

this title, abolished the Reconstruction Finance Corporation.

-CITE-

15 USC Sec. 77kk 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77kk. Representations by Corporation as acting for Department

of State or United States forbidden; interference with foreign

negotiations forbidden

-STATUTE-

Notwithstanding the foregoing provisions of this subchapter, it

shall be unlawful for, and nothing in this subchapter shall be

taken or construed as permitting or authorizing, the Corporation in

this subchapter created, or any committee of said Corporation, or

any person or persons acting for or representing or purporting to

represent it -

(a) to claim or assert or pretend to be acting for or to

represent the Department of State or the United States

Government;

(b) to make any statements or representations of any kind to

any foreign government or its officials or the officials of any

political subdivision of any foreign government that said

Corporation or any committee thereof or any individual or

individuals connected therewith were speaking or acting for the

said Department of State or the United States Government; or

(c) to do any act directly or indirectly which would interfere

with or obstruct or hinder or which might be calculated to

obstruct, hinder, or interfere with the policy or policies of the

said Department of State or the Government of the United States

or any pending or contemplated diplomatic negotiations,

arrangements, business or exchanges between the Government of the

United States or said Department of State and any foreign

government or any political subdivision thereof.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 210, 48 Stat. 95.)

-CITE-

15 USC Sec. 77ll 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77ll. Effective date of subchapter

-STATUTE-

This subchapter shall not take effect until the President finds

that its taking effect is in the public interest and by

proclamation so declares.

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 211, 48 Stat. 95.)

-CITE-

15 USC Sec. 77mm 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER II - FOREIGN SECURITIES

-HEAD-

Sec. 77mm. Short title

-STATUTE-

This subchapter may be cited as the ''Corporation of Foreign

Bondholders Act, 1933.''

-SOURCE-

(May 27, 1933, ch. 38, title II, Sec. 212, 48 Stat. 95.)

-CITE-

15 USC SUBCHAPTER III - TRUST INDENTURES 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

.

-HEAD-

SUBCHAPTER III - TRUST INDENTURES

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 78c, 80a-2, 80a-37,

80a-49, 80b-2 of this title; title 7 section 12a; title 11 section

364, 1145; title 25 section 646.

-CITE-

15 USC Sec. 77aaa 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77aaa. Short title

-STATUTE-

This subchapter may be cited as the ''Trust Indenture Act of

1939.''

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 301, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1149.)

-MISC1-

SHORT TITLE OF 1990 AMENDMENT

Pub. L. 101-550, title IV, Sec. 401, Nov. 15, 1990, 104 Stat.

2721, provided that: ''This title (amending sections 77ccc to

77eee, 77iii to 77rrr, and 77vvv of this title) may be cited as the

'Trust Indenture Reform Act of 1990'.''

-CITE-

15 USC Sec. 77bbb 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77bbb. Necessity for regulation

-STATUTE-

(a) Practices adversely affecting public

Upon the basis of facts disclosed by the reports of the

Securities and Exchange Commission made to the Congress pursuant to

section 78jj of this title and otherwise disclosed and ascertained,

it is hereby declared that the national public interest and the

interest of investors in notes, bonds, debentures, evidences of

indebtedness, and certificates of interest or participation

therein, which are offered to the public, are adversely affected -

(1) when the obligor fails to provide a trustee to protect and

enforce the rights and to represent the interests of such

investors, notwithstanding the fact that (A) individual action by

such investors for the purpose of protecting and enforcing their

rights is rendered impracticable by reason of the

disproportionate expense of taking such action, and (B) concerted

action by such investors in their common interest through

representatives of their own selection is impeded by reason of

the wide dispersion of such investors through many States, and by

reason of the fact that information as to the names and addresses

of such investors generally is not available to such investors;

(2) when the trustee does not have adequate rights and powers,

or adequate duties and responsibilities, in connection with

matters relating to the protection and enforcement of the rights

of such investors; when, notwithstanding the obstacles to

concerted action by such investors, and the general and

reasonable assumption by such investors that the trustee is under

an affirmative duty to take action for the protection and

enforcement of their rights, trust indentures (A) generally

provide that the trustee shall be under no duty to take any such

action, even in the event of default, unless it receives notice

of default, demand for action, and indemnity, from the holders of

substantial percentages of the securities outstanding thereunder,

and (B) generally relieve the trustee from liability even for its

own negligent action or failure to act;

(3) when the trustee does not have resources commensurate with

its responsibilities, or has any relationship to or connection

with the obligor or any underwriter of any securities of the

obligor, or holds, beneficially or otherwise, any interest in the

obligor or any such underwriter, which relationship, connection,

or interest involves a material conflict with the interests of

such investors;

(4) when the obligor is not obligated to furnish to the trustee

under the indenture and to such investors adequate current

information as to its financial condition, and as to the

performance of its obligations with respect to the securities

outstanding under such indenture; or when the communication of

such information to such investors is impeded by the fact that

information as to the names and addresses of such investors

generally is not available to the trustee and to such investors;

(5) when the indenture contains provisions which are misleading

or deceptive, or when full and fair disclosure is not made to

prospective investors of the effect of important indenture

provisions; or

(6) when, by reason of the fact that trust indentures are

commonly prepared by the obligor or underwriter in advance of the

public offering of the securities to be issued thereunder, such

investors are unable to participate in the preparation thereof,

and, by reason of their lack of understanding of the situation,

such investors would in any event be unable to procure the

correction of the defects enumerated in this subsection.

(b) Declaration of policy

Practices of the character above enumerated have existed to such

an extent that, unless regulated, the public offering of notes,

bonds, debentures, evidences of indebtedness, and certificates of

interest or participation therein, by the use of means and

instruments of transportation and communication in interstate

commerce and of the mails, is injurious to the capital markets, to

investors, and to the general public; and it is hereby declared to

be the policy of this subchapter, in accordance with which policy

all the provisions of this subchapter shall be interpreted, to meet

the problems and eliminate the practices, enumerated in this

section, connected with such public offerings.

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 302, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1150.)

-REFTEXT-

REFERENCES IN TEXT

Section 78jj of this title, referred to in subsec. (a), was

omitted from the Code.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-CITE-

15 USC Sec. 77ccc 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77ccc. Definitions

-STATUTE-

When used in this subchapter, unless the context otherwise

requires -

(1) Any term defined in section 2 of the Securities Act of 1933

(15 U.S.C. 77b), and not otherwise defined in this section shall

have the meaning assigned to such term in such section 2 (15

U.S.C. 77b).

(2) The terms ''sale'', ''sell'', ''offer to sell'', ''offer

for sale'', and ''offer'' shall include all transactions included

in such terms as provided in paragraph (3) of section 2(a) of the

Securities Act of 1933 (15 U.S.C. 77b(a)), except that an offer

or sale of a certificate of interest or participation shall be

deemed an offer or sale of the security or securities in which

such certificate evidences an interest or participation if and

only if such certificate gives the holder thereof the right to

convert the same into such security or securities.

(3) The term ''prospectus'' shall have the meaning assigned to

such term in paragraph (10) of section 2(a) of the Securities Act

of 1933 (15 U.S.C. 77b(a)), except that in the case of securities

which are not registered under the Securities Act of 1933 (15

U.S.C. 77a et seq.), such term shall not include any

communication (A) if it is proved that prior to or at the same

time with such communication a written statement if any required

by section 77fff of this title was sent or given to the persons

to whom the communication was made, or (B) if such communication

states from whom such statement may be obtained (if such

statement is required by rules or regulations under paragraphs

(1) or (2) of subsection (b) of section 77fff of this title) and,

in addition, does no more than identify the security, state the

price thereof, state by whom orders will be executed and contain

such other information as the Commission, by rules or regulations

deemed necessary or appropriate in the public interest or for the

protection of investors, and subject to such terms and conditions

as may be prescribed therein, may permit.

(4) The term ''underwriter'' means any person who has purchased

from an issuer with a view to, or offers or sells for an issuer

in connection with, the distribution of any security, or

participates or has a direct or indirect participation in any

such undertaking, or participates or has a participation in the

direct or indirect underwriting of any such undertaking; but such

term shall not include a person whose interest is limited to a

commission from an underwriter or dealer not in excess of the

usual and customary distributors' or sellers' commission.

(5) The term ''director'' means any director of a corporation,

or any individual performing similar functions with respect to

any organization whether incorporated or unincorporated.

(6) The term ''executive officer'' means the president, every

vice president, every trust officer, the cashier, the secretary,

and the treasurer of a corporation, and any individual

customarily performing similar functions with respect to any

organization whether incorporated or unincorporated, but shall

not include the chairman of the board of directors.

(7) The term ''indenture'' means any mortgage, deed of trust,

trust or other indenture, or similar instrument or agreement

(including any supplement or amendment to any of the foregoing),

under which securities are outstanding or are to be issued,

whether or not any property, real or personal, is, or is to be,

pledged, mortgaged, assigned, or conveyed thereunder.

(8) The term ''application'' or ''application for

qualification'' means the application provided for in section

77eee of this title or section 77ggg of this title, and includes

any amendment thereto and any report, document, or memorandum

accompanying such application or incorporated therein by

reference.

(9) The term ''indenture to be qualified'' means (A) the

indenture under which there has been or is to be issued a

security in respect of which a particular registration statement

has been filed, or (B) the indenture in respect of which a

particular application has been filed.

(10) The term ''indenture trustee'' means each trustee under

the indenture to be qualified, and each successor trustee.

(11) The term ''indenture security'' means any security issued

or issuable under the indenture to be qualified.

(12) The term ''obligor'', when used with respect to any such

indenture security, means every person (including a guarantor)

who is liable thereon, and, if such security is a certificate of

interest or participation, such term means also every person

(including a guarantor) who is liable upon the security or

securities in which such certificate evidences an interest or

participation; but such term shall not include the trustee under

an indenture under which certificates of interest or

participation, equipment trust certificates, or like securities

are outstanding.

(13) The term ''paying agent'', when used with respect to any

such indenture security, means any person authorized by an

obligor thereon (A) to pay the principal of or interest on such

security on behalf of such obligor, or (B) if such security is a

certificate of interest or participation, equipment trust

certificate, or like security, to make such payment on behalf of

the trustee.

(14) The term ''State'' means any State of the United States.

(15) The term ''Commission'' means the Securities and Exchange

Commission.

(16) The term ''voting security'' means any security presently

entitling the owner or holder thereof to vote in the direction or

management of the affairs of a person, or any security issued

under or pursuant to any trust, agreement, or arrangement whereby

a trustee or trustees or agent or agents for the owner or holder

of such security are presently entitled to vote in the direction

or management of the affairs of a person; and a specified

percentage of the voting securities of a person means such amount

of the outstanding voting securities of such person as entitles

the holder or holders thereof to cast such specified percentage

of the aggregate votes which the holders of all the outstanding

voting securities of such person are entitled to cast in the

direction or management of the affairs of such person.

(17) The terms ''Securities Act of 1933 (15 U.S.C. 77a et

seq.),'' ''Securities Exchange Act of 1934 (15 U.S.C. 78a et

seq.),'' and ''Public Utility Holding Company Act of 1935 (15

U.S.C. 79 et seq.)'' shall be deemed to refer, respectively, to

such Acts, as amended, whether amended prior to or after the

enactment of this subchapter.

(18) The term ''Bankruptcy Act'' means the Bankruptcy Act or

title 11.

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 303, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1151; amended Aug. 10, 1954, ch. 667, title III,

Sec. 301, 68 Stat. 686; Pub. L. 95-598, title III, Sec. 307, Nov.

6, 1978, 92 Stat. 2674; Pub. L. 100-181, title V, Sec. 501, 502,

Dec. 4, 1987, 101 Stat. 1260; Pub. L. 101-550, title IV, Sec. 402,

Nov. 15, 1990, 104 Stat. 2722; Pub. L. 105-353, title III, Sec.

301(e)(1), Nov. 3, 1998, 112 Stat. 3237.)

-REFTEXT-

REFERENCES IN TEXT

The Securities Act of 1933, referred to in pars. (3) and (17), is

act May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which

is classified generally to subchapter I (Sec. 77a et seq.) of this

chapter. For complete classification of this Act to the Code, see

section 77a of this title and Tables.

The Securities Exchange Act of 1934, referred to in par. (17), is

act June 6, 1934, ch. 404, 48 Stat. 881, as amended, which is

classified generally to chapter 2B (Sec. 78a et seq.) of this

title. For complete classification of this Act to the Code, see

section 78a of this title and Tables.

The Public Utility Holding Company Act of 1935, referred to in

par. (17), is act Aug. 26, 1935, ch. 687, title I, 49 Stat. 838, as

amended, which is classified generally to chapter 2C (Sec. 79 et

seq.) of this title. For complete classification of this Act to

the Code, see section 79 of this title and Tables.

The Bankruptcy Act, referred to in par. (18), is act July 1,

1898, ch. 541, 30 Stat. 544, as amended, which was classified

generally to former Title 11, Bankruptcy. The Act was repealed

effective Oct. 1, 1979, by Pub. L. 95-598, Sec. 401(a), 402(a),

Nov. 6, 1978, 92 Stat. 2682, section 101 of which enacted revised

Title 11.

-MISC2-

AMENDMENTS

1998 - Pars. (2), (3). Pub. L. 105-353 substituted ''section

2(a)'' for ''section 2''.

1990 - Par. (8). Pub. L. 101-550 inserted ''section 77eee of this

title or'' after ''provided for in''.

1987 - Par. (4). Pub. L. 100-181, Sec. 501, substituted

''undertaking'' for ''undertakng''.

Par. (12). Pub. L. 100-181, Sec. 502, inserted ''(including a

guarantor)'' after ''person'' in two places.

1978 - Par. (18). Pub. L. 95-598 substituted ''Bankruptcy Act or

title 11'' for ''Act entitled 'An Act to establish a uniform system

of bankruptcy throughout the United States', approved July 1, 1898,

as amended, whether amended prior to or after August 3, 1939''.

1954 - Pars. (1) to (4). Act Aug. 10, 1954, made formal changes

in order to conform to amendments made by act Aug. 10, 1954, to

sections 77b, 77e, and 77j of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment effective Oct. 1, 1979, see section 402(a) of Pub. L.

95-598 set out as an Effective Date note preceding section 101 of

Title 11, Bankruptcy.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-CITE-

15 USC Sec. 77ddd 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77ddd. Exempted securities and transactions

-STATUTE-

(a) Specific securities exempted

The provisions of this subchapter shall not apply to any of the

following securities:

(1) any security other than (A) a note, bond, debenture, or

evidence of indebtedness, whether or not secured, or (B) a

certificate of interest or participation in any such note, bond,

debenture, or evidence of indebtedness, or (C) a temporary

certificate for, or guarantee of, any such note, bond, debenture,

evidence of indebtedness, or certificate;

(2) any certificate of interest or participation in two or more

securities having substantially different rights and privileges,

or a temporary certificate for any such certificate;

(3) Repealed. Pub. L. 101-550, title IV, Sec. 403(1)(A), Nov.

15, 1990, 104 Stat. 2722.

(4)(A) any security exempted from the provisions of the

Securities Act of 1933 (15 U.S.C. 77a et seq.) by paragraphs (2)

to (8), (11), or (13) of section 3(a) thereof (15 U.S.C. 77c(a));

(B) any security exempted from the provisions of the Securities

Act of 1933, as amended (15 U.S.C. 77a et seq.), by paragraph (2)

of subsection 3(a) thereof, as amended by section 401 of the

Employment Security Amendments of 1970 (15 U.S.C. 77c(a)(2));

(5) any security issued under a mortgage indenture as to which

a contract of insurance under the National Housing Act (12 U.S.C.

1701 et seq.) is in effect; and any such security shall be deemed

to be exempt from the provisions of the Securities Act of 1933

(15 U.S.C. 77a et seq.) to the same extent as though such

security were specifically enumerated in section 3(a)(2) of such

Act (15 U.S.C. Sec. 77c(a)(2));

(6) any note, bond, debenture, or evidence of indebtedness

issued or guaranteed by a foreign government or by a subdivision,

department, municipality, agency, or instrumentality thereof;

(7) any guarantee of any security which is exempted by this

subsection;

(8) any security which has been or is to be issued otherwise

than under an indenture, but this exemption shall not be applied

within a period of twelve consecutive months to an aggregate

principal amount of securities of the same issuer greater than

the figure stated in section 3(b) of the Securities Act of 1933

(15 U.S.C. 77c(b)) limiting exemptions thereunder, or such lesser

amount as the Commission may establish by its rules and

regulations;

(9) any security which has been or is to be issued under an

indenture which limits the aggregate principal amount of

securities at any time outstanding thereunder to $10,000,000, or

such lesser amount as the Commission may establish by its rules

and regulations, but this exemption shall not be applied within a

period of thirty-six consecutive months to more than $10,000,000

aggregate principal amount of securities of the same issuer, or

such lesser amount as the Commission may establish by its rules

and regulations; or

(10) any security issued under a mortgage or trust deed

indenture as to which a contract of insurance under title XI of

the National Housing Act (12 U.S.C. 1749aaa et seq.) is in

effect; and any such security shall be deemed to be exempt from

the provisions of the Securities Act of 1933 (15 U.S.C. 77a et

seq.) to the same extent as though such security were

specifically enumerated in section 3(a)(2), as amended, of the

Securities Act of 1933 (15 U.S.C. 77c(a)(2)).

In computing the aggregate principal amount of securities to which

the exemptions provided by paragraphs (8) and (9) of this

subsection may be applied, securities to which the provisions of

sections 77eee and 77fff of this title would not have applied,

irrespective of the provisions of those paragraphs, shall be

disregarded.

(b) Application of sections 77eee and 77fff

The provisions of sections 77eee and 77fff of this title shall

not apply (1) to any of the transactions exempted from the

provisions of section 5 of the Securities Act of 1933 (15 U.S.C.

77e) by section 4 thereof (15 U.S.C. 77d) or (2) to any transaction

which would be so exempted but for the last sentence of paragraph

(11) of section 2 of such Act (FOOTNOTE 1) (15 U.S.C. 77b).

(FOOTNOTE 1) See References in Text note below.

(c) Securities issued or proposed to be issued under indenture

The Commission shall, on application by the issuer and after

opportunity for hearing thereon, by order exempt from any one or

more provisions of this subchapter any security issued or proposed

to be issued under any indenture under which, at the time such

application is filed, securities referred to in paragraph (3) of

subsection (a) of this section are outstanding or on January 1,

1959, such securities were outstanding, if and to the extent that

the Commission finds that compliance with such provision or

provisions, through the execution of a supplemental indenture or

otherwise -

(1) would require, by reason of the provisions of such

indenture, or the provisions of any other indenture or agreement

made prior to August 3, 1939, or the provisions of any applicable

law, the consent of the holders of securities outstanding under

any such indenture or agreement; or

(2) would impose an undue burden on this issuer, having due

regard to the public interest and the interests of investors.

(d) Exemptions in public interest

The Commission may, by rules or regulations upon its own motion,

or by order on application by an interested person, exempt

conditionally or unconditionally any person, registration

statement, indenture, security or transaction, or any class or

classes of persons, registration statements, indentures,

securities, or transactions, from any one or more of the provisions

of this subchapter, if and to the extent that such exemption is

necessary or appropriate in the public interest and consistent with

the protection of investors and the purposes fairly intended by

this subchapter. The Commission shall by rules and regulations

determine the procedures under which an exemption under this

subsection shall be granted, and may, in its sole discretion,

decline to entertain any application for an order of exemption

under this subsection.

(e) Securities issued by small investment company

The Commission may from time to time by its rules and

regulations, and subject to such terms and conditions as may be

prescribed herein, add to the securities exempted as provided in

this section any class of securities issued by a small business

investment company under the Small Business Investment Act of 1958

(15 U.S.C. 661 et seq.) if it finds, having regard to the purposes

of that Act, that the enforcement of this subchapter with respect

to such securities is not necessary in the public interest and for

the protection of investors.

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 304, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1153; amended Aug. 10, 1954, ch. 667, title III,

Sec. 302, 68 Stat. 687; Pub. L. 85-699, title III, Sec. 307(b),

Aug. 21, 1958, 72 Stat. 694; Pub. L. 86-760, Sept. 13, 1960, 74

Stat. 902; Pub. L. 89-754, title V, Sec. 504(b), Nov. 3, 1966, 80

Stat. 1278; Pub. L. 91-567, Sec. 6(c), Dec. 22, 1970, 84 Stat.

1499; Pub. L. 96-477, title III, Sec. 302, Oct. 21, 1980, 94 Stat.

2291; Pub. L. 101-550, title IV, Sec. 403, Nov. 15, 1990, 104 Stat.

2722; Pub. L. 104-290, title V, Sec. 508(e), Oct. 11, 1996, 110

Stat. 3448; Pub. L. 105-353, title III, Sec. 301(e)(2), Nov. 3,

1998, 112 Stat. 3237.)

-REFTEXT-

REFERENCES IN TEXT

The Securities Act of 1933, referred to in subsec. (a)(4), (5),

and (10), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, as

amended, which is classified generally to subchapter I (Sec. 77a et

seq.) of this chapter. For complete classification of this Act to

the Code, see section 77a of this title and Tables.

The National Housing Act, referred to in subsec. (a)(5), is act

June 27, 1934, ch. 847, 48 Stat. 1246, as amended, which is

classified generally to chapter 13 (Sec. 1701 et seq.) of Title 12,

Banks and Banking. Provisions of that act relating to insurance of

mortgages are contained in section 1707 et seq. of Title 12. Title

XI of the National Housing Act, is classified to subchapter IX-B

(Sec. 1749aaa et seq.) of chapter 13 of Title 12. For complete

classification of this Act to the Code, see References in Text note

set out under section 1701 of Title 12 and Tables.

Paragraph (11) of section 2 of the Securities Act of 1933,

referred to in subsec. (b), was redesignated paragraph (11) of

section 2(a) of the Act by Pub. L. 104-290, title I, Sec.

106(a)(1), Oct. 11, 1996, 110 Stat. 3424, and is classified to

section 77b(a)(11) of this title.

The Small Business Investment Act of 1958, referred to in subsec.

(e), is Pub. L. 85-699, Aug. 21, 1958, 72 Stat. 689, as amended,

which is classified principally to chapter 14B (Sec. 661 et seq.)

of this title. For complete classification of this Act to the

Code, see Short Title note set out under section 661 of this title

and Tables.

-MISC2-

AMENDMENTS

1998 - Subsec. (a)(4)(A). Pub. L. 105-353 substituted ''(13) of

section'' for ''(14) of subsection''.

1996 - Subsec. (a)(4)(A). Pub. L. 104-290 substituted ''(11), or

(14)'' for ''or (11)''.

1990 - Subsec. (a)(3). Pub. L. 101-550, Sec. 403(1)(A), struck

out par. (3) which read as follows: ''any security which, prior to

or within six months after August 3, 1939, has been sold or

disposed of by the issuer or bona fide offered to the public, but

this exemption shall not apply to any new offering of any such

security by an issuer subsequent to such six months;''.

Subsec. (a)(4)(A). Pub. L. 101-550, Sec. 403(1)(B), struck out

'', as heretofore amended,'' after ''1933''.

Subsec. (d). Pub. L. 101-550, Sec. 403(2), added subsec. (d) and

struck out former subsec. (d) which read as follows: ''The

Commission may, on application by the issuer and after opportunity

for hearing thereon, by order exempt from any one or more of the

provisions of this subchapter any security issued or proposed to be

issued by a person organized and existing under the laws of a

foreign government or a political subdivision thereof, if and to

the extent that the Commission finds that compliance with such

provision or provisions is not necessary in the public interest and

for the protection of investors.''

1980 - Subsec. (a)(8). Pub. L. 96-477, Sec. 302(a), substituted

''an aggregate principal amount of securities of the same issuer

greater than the figure stated in section 3(b) of the Securities

Act of 1933 limiting exemptions thereunder, or such lesser amount

as the Commission may establish by its rules and regulations'' for

''more than $250,000 aggregate principal amount of any securities

of the same issuer''.

Subsec. (a)(9). Pub. L. 96-477, Sec. 302(b), substituted

''$10,000,000, or such lesser amount as the Commission may

establish by its rules and regulations'' for ''$1,000,000 or

less'', ''more than $10,000,000'' for ''more than $1,000,000'', and

inserted '', or such lesser amount as the Commission may establish

by its rules and regulations'' after ''same issuer''.

1970 - Subsec. (a)(4). Pub. L. 91-567 designated existing

provisions as cl. (A) and added cl. (B).

1966 - Subsec. (a)(10). Pub. L. 89-754 added par. (10).

1960 - Subsec. (c). Pub. L. 86-760 inserted ''or on January 1,

1959, such securities were outstanding''.

1958 - Subsec. (e). Pub. L. 85-699 added subsec. (e).

1954 - Subsec. (b). Act Aug. 10, 1954, struck out ''as heretofore

amended,''.

EFFECTIVE DATE OF 1970 AMENDMENT

Amendment by Pub. L. 91-567 applicable with respect to securities

sold after Jan. 1, 1970, see section 6(d) of Pub. L. 91-567, set

out as a note under section 77c of this title.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77eee, 77fff, 77ggg of

this title; title 12 section 2290.

-CITE-

15 USC Sec. 77eee 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77eee. Securities required to be registered under Securities

Act

-STATUTE-

(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.

(c) Information required in prospectus

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-

(May 27, 1933, ch. 38, title III, Sec. 305, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1154; amended Aug. 10, 1954, ch. 667, title III,

Sec. 303, 68 Stat. 687; Pub. L. 101-550, title IV, Sec. 404, Nov.

15, 1990, 104 Stat. 2722.)

-REFTEXT-

REFERENCES IN TEXT

The Securities Act of 1933, referred to in subsec. (b)(2), is act

May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is

classified generally to subchapter I (Sec. 77a et seq.) of this

chapter. For complete classification of this Act to the Code, see

section 77a of this title and Tables.

-MISC2-

AMENDMENTS

1990 - Subsec. (a)(1). Pub. L. 101-550, Sec. 404(1), struck out

''or has a conflicting interest as defined in subsection (b) of

section 77jjj of this title'' after ''section 77jjj of this

title''.

Subsec. (b). Pub. L. 101-550, Sec. 404(2), designated existing

provisions as par. (1), substituted ''Except as may be permitted by

paragraph (2) of this subsection, the Commission shall issue'' for

''The Commission shall issue'', redesignated former par. (1) as

subpar. (a) and inserted ''or'' at end, struck out former par. (2)

which authorized Commission to prohibit a registration statement

from taking effect if it finds that such indenture does not conform

to requirements of sections 77jjj to 77rrr of this title,

redesignated former par. (3) as subpar. (B) and struck out ''or has

any conflicting interest as defined in subsection (b) of section

77jjj of this title'' after ''section 77jjj of this title'', and

added par. (2).

1954 - Subsec. (c). Act Aug. 10, 1954, authorized the Commission

to prescribe by rule and regulation the extent to which summaries

of indenture provisions must be contained in prospectuses.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77ccc, 77ddd, 77fff,

77ggg, 77iii, 77jjj, 77vvv of this title.

-CITE-

15 USC Sec. 77fff 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77fff. Securities not registered under Securities Act

-STATUTE-

(a) Prohibitions affecting unregistered securities not issued under

indenture

In the case of any security which is not registered under the

Securities Act of 1933 (15 U.S.C. 77a et seq.) and to which this

subsection is applicable notwithstanding the provisions of section

77ddd of this title, unless such security has been or is to be

issued under an indenture and an application for qualification is

effective as to such indenture, 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

interstate commerce, by any means or instruments of

transportation, any such security for the purpose of sale or for

delivery after sale.

(b) Prohibitions affecting unregistered securities issued under

indenture

In the case of any security which is not registered under the

Securities Act of 1933 (15 U.S.C. 77a et seq.), but which has been

or is to be issued under an indenture as to which an application

for qualification is effective, 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 such security, unless

such prospectus, 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, includes or is

accompanied by a written statement that contains the information

specified in subsection (c) of section 77eee of this title; or

(2) to carry or to 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, to the extent the Commission may

prescribe by rules and regulations as necessary or appropriate in

the public interest or for the protection of investors,

accompanied or preceded by a written statement that contains the

information specified in subsection (c) of section 77eee of this

title.

(c) Necessity of issuance under indenture; application for

qualification

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 through the use or medium of any prospectus or otherwise any

security which is not registered under the Securities Act of 1933

(15 U.S.C. 77a et seq.) and to which this subsection is applicable

notwithstanding the provisions of section 77ddd of this title,

unless such security has been or is to be issued under an indenture

and an application for qualification has been filed as to such

indenture, or while the application is the subject of a refusal

order or stop order or (prior to qualification) any public

proceeding or examination under section 77ggg(c) of this title.

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 306, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1155; amended Aug. 10, 1954, ch. 667, title III,

Sec. 304, 68 Stat. 687.)

-REFTEXT-

REFERENCES IN TEXT

The Securities Act of 1933, referred to in subsecs. (a) to (c),

is act May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended,

which is classified generally to subchapter I (Sec. 77a et seq.) of

this chapter. For complete classification of this Act to the Code,

see section 77a of this title and Tables.

-MISC2-

AMENDMENTS

1954 - Subsec. (b). Act Aug. 10, 1954, authorized the Commission

to prescribe the extent to which summaries of indenture provisions

must be used in the sale of specified types of securities.

Subsec. (c). Act Aug. 10, 1954, added subsec. (c).

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,

1954, see note under section 77b of this title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77ccc, 77ddd, 77eee,

77ggg of this title.

-CITE-

15 USC Sec. 77ggg 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77ggg. Qualification of indentures covering securities not

required to be registered

-STATUTE-

(a) Application; information required; availability of information

to public

In the case of any security which is not required to be

registered under the Securities Act of 1933 (15 U.S.C. 77a et seq.)

and to which subsection (a) of section 77fff of this title is

applicable notwithstanding the provisions of section 77ddd of this

title, an application for qualification of the indenture under

which such security has been or is to be issued shall be filed with

the Commission by the issuer of such security. Each such

application shall be in such form, and shall be signed in such

manner, as the Commission may by rules and regulations prescribe as

necessary or appropriate in the public interest or for the

protection of investors. Each such application shall include the

information and documents required by subsection (a) of section

77eee of this title. The information and documents required by

paragraph (1) of such subsection with respect to the person

designated to act as indenture trustee shall be contained in a

separate part of such application, which part shall be signed by

such person. Each such application shall also include such of the

other information and documents which would be required to be filed

in order to register such indenture security under the Securities

Act of 1933 as the Commission may by rules and regulations

prescribe as necessary or appropriate in the public interest or for

the protection of investors. An application may be withdrawn by

the applicant at any time prior to the effective date thereof.

Subject to the provisions of section 77uuu of this title, the

information and documents contained in or filed with any

application shall be made available to the public under such

regulations as the Commission may prescribe, and copies thereof,

photostatic or otherwise, shall be furnished to every applicant

therefor at such reasonable charge as the Commission may prescribe.

(b) Filing of application

The filing with the Commission of an application, or of an

amendment to an application, shall be deemed to have taken place

upon the receipt thereof by the Commission.

(c) Applicability of other statutory provisions

The provisions of section 77h of this title and the provisions of

subsection (b) of section 77eee of this title shall apply with

respect to every such application, as though such application were

a registration statement filed pursuant to the provisions of the

Securities Act of 1933 (15 U.S.C. 77a et seq.).

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 307, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1156; amended Pub. L. 107-123, Sec. 7, Jan. 16,

2002, 115 Stat. 2397.)

-REFTEXT-

REFERENCES IN TEXT

The Securities Act of 1933, referred to in subsecs. (a) and (c),

is act May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended,

which is classified generally to subchapter I (Sec. 77a et seq.) of

this chapter. For complete classification of this Act to the Code,

see section 77a of this title and Tables.

-MISC2-

AMENDMENTS

2002 - Subsec. (b). Pub. L. 107-123 substituted ''Commission''

for ''Commission, but, in the case of an application, only if it is

accompanied or preceded by payment to the Commission of a filing

fee in the amount of $100, such payment to be made in cash or by

United States postal money order or certified or bank check, or in

such other medium of payment as the Commission may authorize by

rule and regulation''.

EFFECTIVE DATE OF 2002 AMENDMENT

Amendment by Pub. L. 107-123 effective Oct. 1, 2001, see section

11 of Pub. L. 107-123, set out as a note under section 78ee of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77ccc, 77eee, 77fff,

77iii, 77jjj, 77vvv of this title.

-CITE-

15 USC Sec. 77hhh 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77hhh. Integration of procedure with Securities Act and other

Acts

-STATUTE-

(a) Incorporation by reference

The Commission, by such rules and regulations or orders as it

deems necessary or appropriate in the public interest or for the

protection of investors, shall authorize the filing of any

information or documents required to be filed with the Commission

under this subchapter, or under the Securities Act of 1933 (15

U.S.C. 77a et seq.), the Securities Exchange Act of 1934 (15 U.S.C.

78a et seq.), or the Public Utility Holding Company Act of 1935 (15

U.S.C. 79 et seq.), by incorporating by reference any information

or documents on file with the Commission under this subchapter or

under any such Act.

(b) Consolidation of applications, reports, etc.

The Commission, by such rules and regulations or orders as it

deems necessary or appropriate in the public interest or for the

protection of investors, shall provide for the consolidation of

applications, reports, and proceedings under this subchapter with

registration statements, applications, reports, and proceedings

under the Securities Act of 1933 (15 U.S.C. 77a et seq.), the

Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), or the

Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et seq.).

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 308, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1156.)

-REFTEXT-

REFERENCES IN TEXT

The Securities Act of 1933, referred to in subsecs. (a) and (b),

is act May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended,

which is classified generally to subchapter I (Sec. 77a et seq.) of

this chapter. For complete classification of this Act to the Code,

see section 77a of this title and Tables.

The Securities Exchange Act of 1934, referred to in subsecs. (a)

and (b), is act June 6, 1934, ch. 404, 48 Stat. 881, as amended,

which is classified generally to chapter 2B (Sec. 78a et seq.) of

this title. For complete classification of this Act to the Code,

see section 78a of this title and Tables.

The Public Utility Holding Company Act of 1935, referred to in

subsecs. (a) and (b), is act Aug. 26, 1935, ch. 687, title I, 49

Stat. 838, as amended, which is classified generally to chapter 2C

(Sec. 79 et seq.) of this title. For complete classification of

this Act to the Code, see section 79 of this title and Tables.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-CITE-

15 USC Sec. 77iii 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77iii. Effective time of qualification

-STATUTE-

(a) Effective time of registration or application for qualification

of indenture

The indenture under which a security has been or is to be issued

shall be deemed to have been qualified under this subchapter -

(1) when registration becomes effective as to such security; or

(2) when an application for the qualification of such indenture

becomes effective, pursuant to section 77ggg of this title.

(b) Stop orders after effective time of qualification

After qualification has become effective as to the indenture

under which a security has been or is to be issued, no stop order

shall be issued pursuant to section 77h(d) of this title,

suspending the effectiveness of the registration statement relating

to such security or of the application for qualification of such

indenture, except on one or more of the grounds specified in

section 77h of this title, or the failure of the issuer to file an

application as provided for by section 77eee(b)(2) of this title.

(c) Effect of subsequent rule or regulation on qualification

The making, amendment, or rescission of a rule, regulation, or

order under the provisions of this subchapter (except to the extent

authorized by subsection (a) of section 77nnn of this title with

respect to rules and regulations prescribed pursuant to such

subsection) shall not affect the qualification, form, or

interpretation of any indenture as to which qualification became

effective prior to the making, amendment, or rescission of such

rule, regulation, or order.

(d) Liability of trustee under qualified indenture

No trustee under an indenture which has been qualified under this

subchapter shall be subject to any liability because of any failure

of such indenture to comply with any of the provisions of this

subchapter, or any rule, regulation, or order thereunder.

(e) Power of Commission to conduct investigation

Nothing in this subchapter shall be construed as empowering the

Commission to conduct an investigation or other proceeding for the

purpose of determining whether the provisions of an indenture which

has been qualified under this subchapter are being complied with,

or to enforce such provisions.

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 309, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1157; amended Pub. L. 101-550, title IV, Sec.

405, Nov. 15, 1990, 104 Stat. 2723.)

-MISC1-

AMENDMENTS

1990 - Subsec. (b). Pub. L. 101-550 inserted before period at end

'', or the failure of the issuer to file an application as provided

for by section 77eee(b)(2) of this title''.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-CITE-

15 USC Sec. 77jjj 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77jjj. Eligibility and disqualification of trustee

-STATUTE-

(a) Persons eligible for appointment as trustee

(1) There shall at all times be one or more trustees under every

indenture qualified or to be qualified pursuant to this subchapter,

at least one of whom shall at all times be a corporation organized

and doing business under the laws of the United States or of any

State or Territory or of the District of Columbia or a corporation

or other person permitted to act as trustee by the Commission

(referred to in this subchapter as the institutional trustee),

which (A) is authorized under such laws to exercise corporate trust

powers, and (B) is subject to supervision or examination by

Federal, State, Territorial, or District of Columbia authority.

The Commission may, pursuant to such rules and regulations as it

may prescribe, or by order on application, permit a corporation or

other person organized and doing business under the laws of a

foreign government to act as sole trustee under an indenture

qualified or to be qualified pursuant to this subchapter, if such

corporation or other person (i) is authorized under such laws to

exercise corporate trust powers, and (ii) is subject to supervision

or examination by authority of such foreign government or a

political subdivision thereof substantially equivalent to

supervision or examination applicable to United States

institutional trustees. In prescribing such rules and regulations

or making such order, the Commission shall consider whether under

such laws, a United States institutional trustee is eligible to act

as sole trustee under an indenture relating to securities sold

within the jurisdiction of such foreign government.

(2) Such institution (FOOTNOTE 1) trustee shall have at all times

a combined capital and surplus of a specified minimum amount, which

shall not be less than $150,000. If such institutional trustee

publishes reports of condition at least annually, pursuant to law

or to the requirements of said supervising or examining authority,

the indenture may provide that, for the purposes of this paragraph,

the combined capital and surplus of such trustee shall be deemed to

be its combined capital and surplus as set forth in its most recent

report of condition so published.

(FOOTNOTE 1) So in original. Probably should be

''institutional''.

(3) If the indenture to be qualified requires or permits the

appointment of one or more co-trustees in addition to such

institutional trustee, the rights, powers, duties, and obligations

conferred or imposed upon the trustees or any of them shall be

conferred or imposed upon and exercised or performed by such

institutional trustee, or such institutional trustee and such

co-trustees jointly, except to the extent that under any law of any

jurisdiction in which any particular act or acts are to be

performed, such institutional trustee shall be incompetent or

unqualified to perform such act or acts, in which event such

rights, powers, duties, and obligations shall be exercised and

performed by such co-trustees.

(4) In the case of certificates of interest or participation, the

indenture trustee or trustees shall have the legal power to

exercise all of the rights, powers, and privileges of a holder of

the security or securities in which such certificates evidence an

interest or participation.

(5) No obligor upon the indenture securities or person directly

or indirectly controlling, controlled by, or under common control

with such obligor shall serve as trustee upon such indenture

securities.

(b) Disqualification of trustee

If any indenture trustee has or shall acquire any conflicting

interest as hereinafter defined -

(i) then, within 90 days after ascertaining that it has such

conflicting interest, and if the default (as defined in the next

sentence) to which such conflicting interest relates has not been

cured or duly waived or otherwise eliminated before the end of

such 90-day period, such trustee shall either eliminate such

conflicting interest or, except as otherwise provided below in

this subsection, resign, and the obligor upon the indenture

securities shall take prompt steps to have a successor appointed

in the manner provided in the indenture;

(ii) in the event that such trustee shall fail to comply with

the provisions of clause (i) of this subsection, such trustee

shall, within 10 days after the expiration of such 90-day period,

transmit notice of such failure to the indenture security holders

in the manner and to the extent provided in subsection (c) of

section 77mmm of this title; and

(iii) subject to the provisions of subsection (e) of section

77ooo of this title, unless such trustee's duty to resign is

stayed as provided below in this subsection, any security holder

who has been a bona fide holder of indenture securities for at

least six months may, on behalf of himself and all others

similarly situated, petition any court of competent jurisdiction

for the removal of such trustee, and the appointment of a

successor, if such trustee fails, after written request thereof

by such holder to comply with the provisions of clause (i) of

this subsection.

For the purposes of this subsection, an indenture trustee shall

be deemed to have a conflicting interest if the indenture

securities are in default (as such term is defined in such

indenture, but exclusive of any period of grace or requirement of

notice) and -

(1) such trustee is trustee under another indenture under which

any other securities, or certificates of interest or

participation in any other securities, of an obligor upon the

indenture securities are outstanding or is trustee for more than

one outstanding series of securities, as hereafter defined, under

a single indenture of an obligor, unless -

(A) the indenture securities are collateral trust notes under

which the only collateral consists of securities issued under

such other indenture,

(B) such other indenture is a collateral trust indenture

under which the only collateral consists of indenture

securities, or

(C) such obligor has no substantial unmortgaged assets and is

engaged primarily in the business of owning, or of owning and

developing and/or operating, real estate, and the indenture to

be qualified and such other indenture are secured by wholly

separate and distinct parcels of real estate:

Provided, That the indenture to be qualified shall automatically

be deemed (unless it is expressly provided therein that such

provision is excluded) to contain a provision excluding from the

operation of this paragraph other series under such indenture,

and any other indenture or indentures under which other

securities, or certificates of interest or participation in other

securities, of such an obligor are outstanding, if -

(i) the indenture to be qualified and any such other

indenture or indentures (and all series of securities issuable

thereunder) are wholly unsecured and rank equally, and such

other indenture or indentures (and such series) are

specifically described in the indenture to be qualified or are

thereafter qualified under this subchapter, unless the

Commission shall have found and declared by order pursuant to

subsection (b) of section 77eee of this title or subsection (c)

of section 77ggg of this title that differences exist between

the provisions of the indenture (or such series) to be

qualified and the provisions of such other indenture or

indentures (or such series) which are so likely to involve a

material conflict of interest as to make it necessary in the

public interest or for the protection of investors to

disqualify such trustee from acting as such under one of such

indentures, or

(ii) the issuer shall have sustained the burden of proving,

on application to the Commission and after opportunity for

hearing thereon, that trusteeship under the indenture to be

qualified and such other indenture or under more than one

outstanding series under a single indenture is not so likely to

involve a material conflict of interest as to make it necessary

in the public interest or for the protection of investors to

disqualify such trustee from acting as such under one of such

indentures or with respect to such series;

(2) such trustee or any of its directors or executive officers

is an underwriter for an obligor upon the indenture securities;

(3) such trustee directly or indirectly controls or is directly

or indirectly controlled by or is under direct or indirect common

control with an underwriter for an obligor upon the indenture

securities;

(4) such trustee or any of its directors or executive officers

is a director, officer, partner, employee, appointee, or

representative of an obligor upon the indenture securities, or of

an underwriter (other than the trustee itself) for such an

obligor who is currently engaged in the business of underwriting,

except that -

(A) one individual may be a director and/or an executive

officer of the trustee and a director and/or an executive

officer of such obligor, but may not be at the same time an

executive officer of both the trustee and of such obligor,

(B) if and so long as the number of directors of the trustee

in office is more than nine, one additional individual may be a

director and/or an executive officer of the trustee and a

director of such obligor, and

(C) such trustee may be designated by any such obligor or by

any underwriter for any such obligor, to act in the capacity of

transfer agent, registrar, custodian, paying agent, fiscal

agent, escrow agent, or depositary, or in any other similar

capacity, or, subject to the provisions of paragraph (1) of

this subsection, to act as trustee, whether under an indenture

or otherwise;

(5) 10 per centum or more of the voting securities of such

trustee is beneficially owned either by an obligor upon the

indenture securities or by any director, partner or executive

officer thereof, or 20 per centum or more of such voting

securities is beneficially owned, collectively by any two or more

of such persons; or 10 per centum or more of the voting

securities of such trustee is beneficially owned either by an

underwriter for any such obligor or by any director, partner, or

executive officer thereof, or is beneficially owned,

collectively, by any two or more such persons;

(6) such trustee is the beneficial owner of, or holds as

collateral security for an obligation which is in default as

hereinafter defined -

(A) 5 per centum or more of the voting securities, or 10 per

centum or more of any other class of security, of an obligor

upon the indenture securities, not including indentures

(FOOTNOTE 2) securities and securities issued under any other

indenture under which such trustee is also trustee, or

(FOOTNOTE 2) So in original. Probably should be ''indenture''.

(B) 10 per centum or more of any class of security of an

underwriter for any such obligor;

(7) such trustee is the beneficial owner of, or holds as

collateral security for an obligation which is in default as

hereinafter defined, 5 per centum or more of the voting

securities of any person who, to the knowledge of the trustee,

owns 10 per centum or more of the voting securities of, or

controls directly or indirectly or is under direct or indirect

common control with, an obligor upon the indenture securities;

(8) such trustee is the beneficial owner of, or holds as

collateral security for an obligation which is in default as

hereinafter defined, 10 per centum or more of any class of

security of any person who, to the knowledge of the trustee, owns

50 per centum or more of the voting securities of an obligor upon

the indenture securities;

(9) such trustee owns, on the date of default upon the

indenture securities (as such term is defined in such indenture

but exclusive of any period of grace or requirement of notice) or

any anniversary of such default while such default upon the

indenture securities remains outstanding, in the capacity of

executor, administrator, testamentary or inter vivos trustee,

guardian, committee or conservator, or in any other similar

capacity, an aggregate of 25 per centum or more of the voting

securities, or of any class of security, of any person, the

beneficial ownership of a specified percentage of which would

have constituted a conflicting interest under paragraph (6), (7),

or (8) of this subsection. As to any such securities of which

the indenture trustee acquired ownership through becoming

executor, administrator or testamentary trustee of an estate

which include them, the provisions of the preceding sentence

shall not apply for a period of not more than 2 years from the

date of such acquisition, to the extent that such securities

included in such estate do not exceed 25 per centum of such

voting securities or 25 per centum of any such class of

security. Promptly after the dates of any such default upon the

indenture securities and annually in each succeeding year that

the indenture securities remain in default the trustee shall make

a check of its holding of such securities in any of the

above-mentioned capacities as of such dates. If the obligor upon

the indenture securities fails to make payment in full of

principal or interest under such indenture when and as the same

becomes due and payable, and such failure continues for 30 days

thereafter, the trustee shall make a prompt check of its holdings

of such securities in any of the above-mentioned capacities as of

the date of the expiration of such 30-day period, and after such

date, notwithstanding the foregoing provisions of this paragraph,

all such securities so held by the trustee, with sole or joint

control over such securities vested in it, shall be considered as

though beneficially owned by such trustee, for the purposes of

paragraphs (6), (7), and (8) of this subsection; or

(10) except under the circumstances described in paragraphs

(FOOTNOTE 3) (1), (3), (4), (5) or (6) of section 77kkk(b) of

this title, the trustee shall be or shall become a creditor of

the obligor.

(FOOTNOTE 3) So in original. Probably should be ''paragraph''.

For purposes of paragraph (1) of this subsection, and of section

77ppp(a) of this title, the term ''series of securities'' or

''series'' means a series, class or group of securities issuable

under an indenture pursuant to whose terms holders of one such

series may vote to direct the indenture trustee, or otherwise take

action pursuant to a vote of such holders, separately from holders

of another such series: Provided, That ''series of securities'' or

''series'' shall not include any series of securities issuable

under an indenture if all such series rank equally and are wholly

unsecured.

The specification of percentages in paragraphs (5) to (9),

inclusive, of this subsection shall not be construed as indicating

that the ownership of such percentages of the securities of a

person is or is not necessary or sufficient to constitute direct or

indirect control for the purposes of paragraph (3) or (7) of this

subsection.

For the purposes of paragraphs (6), (7), (8), and (9) of this

subsection -

(A) the terms ''security'' and ''securities'' shall include

only such securities as are generally known as corporate

securities, but shall not include any note or other evidence of

indebtedness issued to evidence an obligation to repay moneys

lent to a person by one or more banks, trust companies, or

banking firms, or any certificate of interest or participation in

any such note or evidence of indebtedness;

(B) an obligation shall be deemed to be in default when a

default in payment of principal shall have continued for thirty

days or more, and shall not have been cured; and

(C) the indenture trustee shall not be deemed the owner or

holder of (i) any security which it holds as collateral security

(as trustee or otherwise) for any obligation which is not in

default as above defined, or (ii) any security which it holds as

collateral security under the indenture to be qualified,

irrespective of any default thereunder, or (iii) any security

which it holds as agent for collection, or as custodian, escrow

agent or depositary, or in any similar representative capacity.

For the purposes of this subsection, the term ''underwriter''

when used with reference to an obligor upon the indenture

securities means every person who, within one year prior to the

time as of which the determination is made, was an underwriter of

any security of such obligor outstanding at the time of the

determination.

Except in the case of a default in the payment of the principal

of or interest on any indenture security, or in the payment of any

sinking or purchase fund installment, the indenture trustee shall

not be required to resign as provided by this subsection if such

trustee shall have sustained the burden of proving, on application

to the Commission and after opportunity for hearing thereon, that -

(i) the default under the indenture may be cured or waived

during a reasonable period and under the procedures described in

such application, and

(ii) a stay of the trustee's duty to resign will not be

inconsistent with the interests of holders of the indenture

securities. The filing of such an application shall

automatically stay the performance of the duty to resign until

the Commission orders otherwise.

Any resignation of an indenture trustee shall become effective

only upon the appointment of a successor trustee and such

successor's acceptance of such an appointment.

(c) Applicability of section

The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et

seq.) shall not be held to establish or authorize the establishment

of any standards regarding the eligibility and qualifications of

any trustee or prospective trustee under an indenture to be

qualified under this subchapter, or regarding the provisions to be

included in any such indenture with respect to the eligibility and

qualifications of the trustee thereunder, other than those

established by the provisions of this section.

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 310, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1157; amended Pub. L. 101-550, title IV, Sec.

406-408, Nov. 15, 1990, 104 Stat. 2723, 2724.)

-REFTEXT-

REFERENCES IN TEXT

The Public Utility Holding Company Act of 1935, referred to in

subsec. (c), is act Aug. 26, 1935, ch. 687, title I, 49 Stat. 838,

as amended, which is classified generally to chapter 2C (Sec. 79 et

seq.) of this title. For complete classification of this Act to

the Code, see section 79 of this title and Tables.

-MISC2-

AMENDMENTS

1990 - Subsec. (a)(1). Pub. L. 101-550, Sec. 406(1)-(4),

substituted ''There shall'' for ''The indenture to be qualified

shall require that there shall'', and ''under every indenture

qualified or to be qualified pursuant to this subchapter'' for

''thereunder'', inserted ''or a corporation or other person

permitted to act as trustee by the Commission'' before ''(referred

to'', and inserted at end ''The Commission may, pursuant to such

rules and regulations as it may prescribe, or by order on

application, permit a corporation or other person organized and

doing business under the laws of a foreign government to act as

sole trustee under an indenture qualified or to be qualified

pursuant to this subchapter, if such corporation or other person

(i) is authorized under such laws to exercise corporate trust

powers, and (ii) is subject to supervision or examination by

authority of such foreign government or a political subdivision

thereof substantially equivalent to supervision or examination

applicable to United States institutional trustees. In prescribing

such rules and regulations or making such order, the Commission

shall consider whether under such laws, a United States

institutional trustee is eligible to act as sole trustee under an

indenture relating to securities sold within the jurisdiction of

such foreign government.''

Subsec. (a)(2). Pub. L. 101-550, Sec. 406(5), which directed the

substitution of ''Such institution'' for ''The indenture to be

qualified shall require that such institution'', was executed by

making the substitution for ''The indenture to be qualified shall

require that such institutional'', as the probable intent of

Congress.

Subsec. (a)(3). Pub. L. 101-550, Sec. 406(6), struck out ''such

indenture shall provide that'' before ''the rights''.

Subsec. (a)(4). Pub. L. 101-550, Sec. 406(7), (8), struck out

''the indenture to be qualified shall require that'' before ''the

indenture'' and inserted ''shall'' after ''trustee or trustees''.

Subsec. (a)(5). Pub. L. 101-550, Sec. 407, added par. (5).

Subsec. (b). Pub. L. 101-550, Sec. 408, amended subsec. (b)

generally.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77eee, 77mmm, 77rrr,

77sss, 77uuu of this title.

-CITE-

15 USC Sec. 77kkk 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77kkk. Preferential collection of claims against obligor

-STATUTE-

(a) Trustee as creditor of obligor

Subject to the provisions of subsection (b) of this section, if

the indenture trustee shall be, or shall become, a creditor,

directly or indirectly, secured or unsecured, of an obligor upon

the indenture securities, within three months prior to a default as

defined in the last paragraph of this subsection, or subsequent to

such a default, then, unless and until such default shall be cured,

such trustee shall set apart and hold in a special account for the

benefit of the trustee individually and the indenture security

holders -

(1) an amount equal to any and all reductions in the amount due

and owing upon any claim as such creditor in respect of principal

or interest, effected after the beginning of such three months'

period and valid as against such obligor and its other creditors,

except any such reduction resulting from the receipt or

disposition of any property described in paragraph (2) of this

subsection, or from the exercise of any right of setoff which the

trustee could have exercised if a petition in bankruptcy had been

filed by or against such obligor upon the date of such default;

and

(2) all property received in respect of any claim as such

creditor, either as security therefor, or in satisfaction or

composition thereof, or otherwise, after the beginning of such

three months' period, or an amount equal to the proceeds of any

such property, if disposed of, subject, however, to the rights,

if any, of such obligor and its other creditors in such property

or such proceeds.

Nothing herein contained shall affect the right of the indenture

trustee -

(A) to retain for its own account (i) payments made on account

of any such claim by any person (other than such obligor) who is

liable thereon, and (ii) the proceeds of the bona fide sale of

any such claim by the trustee to a third person, and (iii)

distributions made in cash, securities, or other property in

respect of claims filed against such obligor in bankruptcy or

receivership or in proceedings for reorganization pursuant to the

Bankruptcy Act or applicable State law;

(B) to realize, for its own account, upon any property held by

it as security for any such claim, if such property was so held

prior to the beginning of such three months' period;

(C) to realize, for its own account, but only to the extent of

the claim hereinafter mentioned, upon any property held by it as

security for any such claim, if such claim was created after the

beginning of such three months' period and such property was

received as security therefor simultaneously with the creation

thereof, and if the trustee shall sustain the burden of proving

that at the time such property was so received the trustee had no

reasonable cause to believe that a default as defined in the last

paragraph of this subsection would occur within three months; or

(D) to receive payment on any claim referred to in paragraph

(B) or (C) of this subsection, against the release of any

property held as security for such claim as provided in said

paragraph (B) or (C), as the case may be, to the extent of the

fair value of such property.

For the purposes of paragraphs (B), (C), and (D) of this

subsection, property substituted after the beginning of such three

months' period for property held as security at the time of such

substitution shall, to the extent of the fair value of the property

released, have the same status as the property released, and, to

the extent that any claim referred to in any of such paragraphs is

created in renewal of or in substitution for or for the purpose of

repaying or refunding any preexisting claim of the indenture

trustee as such creditor, such claim shall have the same status as

such preexisting claim.

If the trustee shall be required to account, the funds and

property held in such special account and the proceeds thereof

shall be apportioned between the trustee and the indenture security

holders in such manner that the trustee and the indenture security

holders realize, as a result of payments from such special account

and payments of dividends on claims filed against such obligor in

bankruptcy or receivership or in proceedings for reorganization

pursuant to the Bankruptcy Act or applicable State law, the same

percentage of their respective claims, figured before crediting to

the claim of the trustee anything on account of the receipt by it

from such obligor of the funds and property in such special account

and before crediting to the respective claims of the trustee and

the indenture security holders dividends on claims filed against

such obligor in bankruptcy or receivership or in proceedings for

reorganization pursuant to the Bankruptcy Act or applicable State

law, but after crediting thereon receipts on account of the

indebtedness represented by their respective claims from all

sources other than from such dividends and from the funds and

property so held in such special account. As used in this

paragraph, with respect to any claim, the term ''dividends'' shall

include any distribution with respect to such claim, in bankruptcy

or receivership or in proceedings for reorganization pursuant to

the Bankruptcy Act or applicable State law, whether such

distribution is made in cash, securities, or other property, but

shall not include any such distribution with respect to the secured

portion, if any, of such claim. The court in which such

bankruptcy, receivership, or proceeding for reorganization is

pending shall have jurisdiction (i) to apportion between the

indenture trustee and the indenture security holders, in accordance

with the provisions of this paragraph, the funds and property held

in such special account and the proceeds thereof, or (ii) in lieu

of such apportionment, in whole or in part, to give to the

provisions of this paragraph due consideration in determining the

fairness of the distributions to be made to the indenture trustee

and the indenture security holders with respect to their respective

claims, in which event it shall not be necessary to liquidate or to

appraise the value of any securities or other property held in such

special account or as security for any such claim, or to make a

specific allocation of such distributions as between the secured

and unsecured portions of such claims, or otherwise to apply the

provisions of this paragraph as a mathematical formula.

Any indenture trustee who has resigned or been removed after the

beginning of such three months' period shall be subject to the

provisions of this subsection as though such resignation or removal

had not occurred. Any indenture trustee who has resigned or been

removed prior to the beginning of such three months' period shall

be subject to the provisions of this subsection if and only if the

following conditions exist -

(i) the receipt of property or reduction of claim which would

have given rise to the obligation to account, if such indenture

trustee had continued as trustee, occurred after the beginning of

such three months' period; and

(ii) such receipt of property or reduction of claim occurred

within three months after such resignation or removal.

As used in this subsection, the term ''default'' means any

failure to make payment in full of principal or interest, when and

as the same becomes due and payable, under any indenture which has

been qualified under this subchapter, and under which the indenture

trustee is trustee and the person of whom the indenture trustee is

directly or indirectly a creditor is an obligor; and the term

''indenture security holder'' means all holders of securities

outstanding under any such indenture under which any such default

exists. In any case commenced under the Bankruptcy Act of July 1,

1898, or any amendment thereto enacted prior to November 6, 1978,

all references to periods of three months shall be deemed to be

references to periods of four months.

(b) Exclusion of creditor relationship arising from specified

classes

The indenture to be qualified shall automatically be deemed

(unless it is expressly provided therein that any such provision is

excluded) to contain provisions excluding from the operation of

subsection (a) of this section a creditor relationship arising from

-

(1) the ownership or acquisition of securities issued under any

indenture, or any security or securities having a maturity of one

year or more at the time of acquisition by the indenture trustee;

(2) advances authorized by a receivership or bankruptcy court

of competent jurisdiction, or by the indenture, for the purpose

of preserving the property subject to the lien of the indenture

or of discharging tax liens or other prior liens or encumbrances

on the trust estate, if notice of such advance and of the

circumstances surrounding the making thereof is given to the

indenture security holders, at the time and in the manner

provided in the indenture;

(3) disbursements made in the ordinary course of business in

the capacity of trustee under an indenture, transfer agent,

registrar, custodian, paying agent, fiscal agent or depositary,

or other similar capacity;

(4) an indebtedness created as a result of services rendered or

premises rented; or an indebtedness created as a result of goods

or securities sold in a cash transaction as defined in the

indenture;

(5) the ownership of stock or of other securities of a

corporation organized under the provisions of section 25(a)

(FOOTNOTE 1) of the Federal Reserve Act, as amended (12 U.S.C.

611 et seq.), which is directly or indirectly a creditor of an

obligor upon the indenture securities; or

(FOOTNOTE 1) See References in Text note below.

(6) the acquisition, ownership, acceptance, or negotiation of

any drafts, bills of exchange, acceptances, or obligations which

fall within the classification of self-liquidating paper as

defined in the indenture.

(c) Issue or sale of securities by registered holding company

In the exercise by the Commission of any jurisdiction under the

Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et seq.)

regarding the issue or sale, by any registered holding company or a

subsidiary company thereof, of any security of such issuer or

seller or of any other company to a person which is trustee under

an indenture or indentures of such issuer or seller or other

company, or of a subsidiary or associate company or affiliate of

such issuer or seller or other company (whether or not such

indenture or indentures are qualified or to be qualified under this

subchapter), the fact that such trustee will thereby become a

creditor, directly or indirectly, of any of the foregoing shall not

constitute a ground for the Commission taking adverse action with

respect to any application or declaration, or limiting the scope of

any rule or regulation which would otherwise permit such

transaction to take effect; but in any case in which such trustee

is trustee under an indenture of the company of which it will

thereby become a creditor, or of any subsidiary company thereof,

this subsection shall not prevent the Commission from requiring (if

such requirement would be authorized under the provisions of the

Public Utility Holding Company Act of 1935) that such trustee, as

such, shall effectively and irrevocably agree in writing, for the

benefit of the holders from time to time of the securities from

time to time outstanding under such indenture, to be bound by the

provisions of this section, subsection (c) of section 77ooo of this

title, and, in case of default (as such term is defined in such

indenture), subsection (d) of section 77ooo of this title, as fully

as though such provisions were included in such indenture. For the

purposes of this subsection the terms ''registered holding

company'', ''subsidiary company'', ''associate company'', and

''affiliate'' shall have the respective meanings assigned to such

terms in section 2(a) of the Public Utility Holding Company Act of

1935 (15 U.S.C. 79b(a)).

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 311, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1161; amended Pub. L. 101-550, title IV, Sec.

409, Nov. 15, 1990, 104 Stat. 2728.)

-REFTEXT-

REFERENCES IN TEXT

Section 25(a) of the Federal Reserve Act, as amended, referred to

in subsec. (b)(5), which is classified to subchapter II (Sec. 611

et seq.) of chapter 6 of Title 12, Banks and Banking, was

renumbered section 25A of that act by Pub. L. 102-242, title I,

Sec. 142(e)(2), Dec. 19, 1991, 105 Stat. 2281.

The Public Utility Holding Company Act of 1935, referred to

subsec. (c), is act Aug. 26, 1935, ch. 687, title I, 49 Stat. 838,

as amended, which is classified generally to chapter 2C (Sec. 79 et

seq.) of this title. For complete classification of this Act to

the Code, see section 79 of this title and Tables.

-MISC2-

AMENDMENTS

1990 - Subsec. (a). Pub. L. 101-550, Sec. 409(1)-(4), struck out

''the indenture to be qualified shall provide that'' before ''if''

in first par., substituted ''If'' for ''The indenture to be

qualified shall provide that, if'' in third par., substituted

''three months'' for ''four months'' and ''three months' '' for

''four months' '' wherever appearing, and inserted at end ''In any

case commenced under the Bankruptcy Act of July 1, 1898, or any

amendment thereto enacted prior to November 6, 1978, all references

to periods of three months shall be deemed to be references to

periods of four months.''

Subsec. (b). Pub. L. 101-550, Sec. 409(5), substituted ''shall

automatically be deemed (unless it is expressly provided therein

that any such provision is excluded) to'' for ''may''.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77jjj, 77mmm, 77rrr,

77sss of this title.

-CITE-

15 USC Sec. 77lll 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77lll. Bondholders' lists

-STATUTE-

(a) Periodic filing of information by obligor with trustee

Each obligor upon the indenture securities shall furnish or cause

to be furnished to the institutional trustee thereunder at stated

intervals of not more than six months, and at such other times as

such trustee may request in writing, all information in the

possession or control of such obligor, or of any of its paying

agents, as to the names and addresses of the indenture security

holders, and requiring such trustee to preserve, in as current a

form as is reasonably practicable, all such information so

furnished to it or received by it in the capacity of paying agent.

(b) Access of information to security holders

Within five business days after the receipt by the institutional

trustee of a written application by any three or more indenture

security holders stating that the applicants desire to communicate

with other indenture security holders with respect to their rights

under such indenture or under the indenture securities, and

accompanied by a copy of the form of proxy or other communication

which such applicants propose to transmit, and by reasonable proof

that each such applicant has owned an indenture security for a

period of at least six months preceding the date of such

application, such institutional trustee shall, at its election,

either -

(1) afford to such applicants access to all information so

furnished to or received by such trustee; or

(2) inform such applicants as to the approximate number of

indenture security holders according to the most recent

information so furnished to or received by such trustee, and as

to the approximate cost of mailing to such indenture security

holders the form of proxy or other communication, if any,

specified in such application.

If such trustee shall elect not to afford to such applicants access

to such information, such trustee shall, upon the written request

of such applicants, mail to all such indenture security holders

copies of the form of proxy or other communication which is

specified in such request, with reasonable promptness after a

tender to such trustee of the material to be mailed and of payment,

or provision for the payment, of the reasonable expenses of such

mailing, unless within five days after such tender, such trustee

shall mail to such applicants, and file with the Commission

together with a copy of the material to be mailed, a written

statement to the effect that, in the opinion of such trustee, such

mailing would be contrary to the best interests of the indenture

security holders or would be in violation of applicable law. Such

written statement shall specify the basis of such opinion. After

opportunity for hearing upon the objections specified in the

written statement so filed, the Commission may, and if demanded by

such trustee or by such applicants shall, enter an order either

sustaining one or more of such objections or refusing to sustain

any of them. If the Commission shall enter an order refusing to

sustain any of such objections, or if, after the entry of an order

sustaining one or more of such objections, the Commission shall

find, after notice and opportunity for hearing, that all objections

so sustained have been met, and shall enter an order so declaring,

such trustee shall mail copies of such material to all such

indenture security holders with reasonable promptness after the

entry of such order and the renewal of such tender.

(c) Disclosure of information deemed not violative of any law

The disclosure of any such information as to the names and

addresses of the indenture security holders in accordance with the

provisions of this section, regardless of the source from which

such information was derived, shall not be deemed to be a violation

of any existing law, or of any law hereafter enacted which does not

specifically refer to this section, nor shall such trustee be held

accountable by reason of mailing any material pursuant to a request

made under subsection (b) of this section.

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 312, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1164; amended Pub. L. 101-550, title IV, Sec.

410, Nov. 15, 1990, 104 Stat. 2728.)

-MISC1-

AMENDMENTS

1990 - Subsec. (a). Pub. L. 101-550, Sec. 410(1), (2),

substituted ''Each obligor'' for ''The indenture to be qualified

shall contain provisions requiring each obligor'' and ''indenture

securities shall'' for ''indenture securities to''.

Subsec. (b). Pub. L. 101-550, Sec. 410(3), substituted ''Within''

for ''The indenture to be qualified shall also contain provisions

requiring that, within''.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77ppp, 77rrr of this

title.

-CITE-

15 USC Sec. 77mmm 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77mmm. Reports by indenture trustee

-STATUTE-

(a) Report to security holders; time; contents

The indenture trustee shall transmit to the indenture security

holders as hereinafter provided, at stated intervals of not more

than 12 months, a brief report with respect to any of the following

events which may have occurred within the previous 12 months (but

if no such event has occurred within such period no report need be

transmitted): - (FOOTNOTE 1)

(FOOTNOTE 1) So in original. The colon probably should not

appear.

(1) any change to its eligibility and its qualifications under

section 77jjj of this title;

(2) the creation of or any material change to a relationship

specified in paragraph (FOOTNOTE 2) (1) through (10) of section

77jjj(b) of this title;

(FOOTNOTE 2) So in original. Probably should be ''paragraphs''.

(3) the character and amount of any advances made by it, as

indenture trustee, which remain unpaid on the date of such

report, and for the reimbursement of which it claims or may claim

a lien or charge, prior to that of the indenture securities, on

the trust estate or on property or funds held or collected by it

as such trustee, if such advances so remaining unpaid aggregate

more than one-half of 1 per centum of the principal amount of the

indenture securities outstanding on such date;

(4) any change to the amount, interest rate, and maturity date

of all other indebtedness owning to it in its individual

capacity, on the date of such report, by the obligor upon the

indenture securities, with a brief description of any property

held as collateral security therefor, except an indebtedness

based upon a creditor relationship arising in any manner

described in paragraphs (2), (3), (4), or (6) of subsection (b)

of section 77kkk of this title;

(5) any change to the property and funds physically in its

possession as indenture trustee on the date of such report;

(6) any release, or release and substitution, of property

subject to the lien of the indenture (and the consideration

therefor, if any) which it has not previously reported;

(7) any additional issue of indenture securities which it has

not previously reported; and

(8) any action taken by it in the performance of its duties

under the indenture which it has not previously reported and

which in its opinion materially affects the indenture securities

or the trust estate, except action in respect of a default,

notice of which has been or is to be withheld by it in accordance

with an indenture provision authorized by subsection (b) of

section 77ooo of this title.

(b) Additional reports to security holders

The indenture trustee shall transmit to the indenture security

holders as hereinafter provided, within the times hereinafter

specified, a brief report with respect to -

(1) the release, or release and substitution, of property

subject to the lien of the indenture (and the consideration

therefor, if any) unless the fair value of such property, as set

forth in the certificate or opinion required by paragraph (1) of

subsection (d) of section 77nnn of this title, is less than 10

per centum of the principal amount of indenture securities

outstanding at the time of such release, or such release and

substitution, such report to be so transmitted within 90 days

after such time; and

(2) the character and amount of any advances made by it as such

since the date of the last report transmitted pursuant to the

provisions of subsection (a) of this section (or if no such

report has yet been so transmitted, since the date of execution

of the indenture), for the reimbursement of which it claims or

may claim a lien or charge, prior to that of the indenture

securities, on the trust estate or on property or funds held or

collected by it as such trustee, and which it has not previously

reported pursuant to this paragraph, if such advances remaining

unpaid at any time aggregate more than 10 per centum of the

principal amount of indenture securities outstanding at such

time, such report to be so transmitted within 90 days after such

time.

(c) Additional parties to whom reports to be transmitted

Reports pursuant to this section shall be transmitted by mail -

(1) to all registered holders of indenture securities, as the

names and addresses of such holders appear upon the registration

books of the obligor upon the indenture securities;

(2) to such holders of indenture securities as have, within the

two years preceding such transmission, filed their names and

addresses with the indenture trustee for that purpose; and

(3) except in the case of reports pursuant to subsection (b) of

this section, to all holders of indenture securities whose names

and addresses have been furnished to or received by the indenture

trustee pursuant to section 77lll of this title.

(d) Filing of report with stock exchanges

A copy of each such report shall, at the time of such

transmission to indenture security holders, be filed with each

stock exchange upon which the indenture securities are listed, and

also with the Commission.

-SOURCE-

(May 27, 1933, ch. 38, title III, Sec. 313, as added Aug. 3, 1939,

ch. 411, 53 Stat. 1165; amended Pub. L. 101-550, title IV, Sec.

411, 412, Nov. 15, 1990, 104 Stat. 2729; Pub. L. 105-353, title

III, Sec. 301(e)(3), Nov. 3, 1998, 112 Stat. 3237.)

-MISC1-

AMENDMENTS

1998 - Subsec. (a)(4). Pub. L. 105-353, Sec. 301(e)(3)(A),

inserted ''any change to'' before ''the amount''.

Subsec. (a)(6). Pub. L. 105-353, Sec. 301(e)(3)(B), struck out

''any change to'' before ''any release''.

1990 - Subsec. (a). Pub. L. 101-550, Sec. 411(1), (2),

substituted ''The indenture trustee shall'' for ''The indenture to

be qualified shall contain provisions requiring the indenture

trustee to'' and inserted ''any of the following events which may

have occurred within the previous 12 months (but if no such event

has occurred within such period no report need be transmitted):''

after ''a brief report with respect to''.

Subsec. (a)(1). Pub. L. 101-550, Sec. 411(3), (4), inserted ''any

change to'' before ''its eligibility'' and struck out '', or in

lieu thereof, if to the best of its knowledge it has continued to

be eligible and qualified under such section, a written statement

to such effect'' after ''of this title''.

Subsec. (a)(2). Pub. L. 101-550, Sec. 411(5), added par. (2) and

redesignated former par. (2) as (3).

Subsec. (a)(3), (4). Pub. L. 101-550, Sec. 411(5)(A),

redesignated pars. (2) and (3) as (3) and (4), respectively.

Former par. (4) redesignated (5).

Subsec. (a)(5). Pub. L. 101-550, Sec. 411(5)(A), redesignated

par. (4) as (5). Former par. (5) redesignated (6).

Pub. L. 101-550, Sec. 411(3), inserted ''any change to'' after

the paragraph designation.

Subsec. (a)(6). Pub. L. 101-550, Sec. 411(5)(A), redesignated

par. (5) as (6). Former par. (6) redesignated (7).

Pub. L. 101-550, Sec. 411(3), inserted ''any change to'' after

the paragraph designation.

Subsec. (a)(7), (8). Pub. L. 101-550, Sec. 411(5)(A),

redesignated pars. (6) and (7) as (7) and (8), respectively.

Subsec. (b). Pub. L. 101-550, Sec. 412(1), substituted ''The

indenture trustee shall'' for ''The indenture to be qualified shall

also contain provisions requiring the indenture trustee to''.

Subsec. (c). Pub. L. 101-550, Sec. 412(2), substituted

''Reports'' for ''The indenture to be qualified shall also provide

that reports''.

Subsec. (d). Pub. L. 101-550, Sec. 412(3), substituted ''A copy''

for ''The indenture to be qualified shall also provide that a

copy''.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of functions of Securities and Exchange Commission,

with certain exceptions, to Chairman of such Commission, see Reorg.

Plan No. 10 of 1950, Sec. 1, 2, eff. May 24, 1950, 15 F.R. 3175,

64 Stat. 1265, set out under section 78d of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 77jjj, 77nnn, 77ooo,

77rrr of this title.

-CITE-

15 USC Sec. 77nnn 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 2A - SECURITIES AND TRUST INDENTURES

SUBCHAPTER III - TRUST INDENTURES

-HEAD-

Sec. 77nnn. Reports by obligor; evidence of compliance with

indenture provisions

-STATUTE-

(a) Periodic reports

Each person who, as set forth in the registration statement or

application, is or is to be an obligor upon the indenture

securities covered thereby shall -

(1) file with the indenture trustee copies of the annual

reports and of the information, documents, and other reports (or

copies of such portions of any of the foregoing as the Commission

may by rules and regulations prescribe) which such obligor is

required to file with the Commission pursuant to section 78m or

78o(d) of this title; or, if the obligor is not required to file

information, documents, or reports pursuant to either of such

sections, then to file with the indenture trustee and the

Commission, in accordance with rules and regulations prescribed

by the Commission, such of the supplementary and periodic

information, documents, and reports which may be required

pursuant to section 78m of this title, in respect of a security

listed and registered on a national securities exchange as may be

prescribed in such rules and regulations;

(2) file with the indenture trustee and the Commission, in

accordance with rules and regulations prescribed by the

Commission, such additional information, documents, and reports

with respect to compliance by such obligor with the conditions

and covenants provided for in the indenture, as may be required

by such rules and regulations, including, in the case of annual

reports, if required by such rules and regulations, certificates

or opinions of independent public accountants, conforming to the

requirements of subsection (e) of this section, as to compliance

with conditions or covenants, compliance with which is subject to

verification by accountants, but no such certificate or opinion

shall be required as to any matter specified in clauses (A), (B),

or (C) of paragraph (3) of subsection (c) of this section;

(3) transmit to the holders of the indenture securities upon

which such person is an obligor, in the manner and to the extent

provided in subsection (c) of section 77mmm of this title, such

summaries of any information, documents, and reports required to

be filed by such obligor pursuant to the provisions of paragraph

(1) or (2) of this subsection as may be required by rules and

regulations prescribed by the Commission; and

(4) furnish to the indenture trustee, not less often than

annually, a brief certificate from the principal executive

officer, principal financial officer or principal accounting

officer as to his or her knowledge of such obligor's compliance

with all conditions and covenants under the indenture. For

purposes of this paragraph, such compliance shall be determined

without regard to any period of grace or requirement of notice

provided under the indenture.

The rules and regulations prescribed under this subsection shall be

such as are necessary or appropriate in the public interest or for

the protection of investors, having due regard to the types of

indentures, and the nature of the business of the class of obligors

affected thereby, and the amount of indenture securities

outstanding under such indentures, and, in the case of any such

rules and regulations prescribed after the indentures to which they

apply have been qualified under this subchapter, the additional

expense, if any, of complying with such rules and regulations.

Such rules and regulations may be prescribed either before or after

qualification becomes effective as to any such indenture.

(b) Evidence of recording of indenture

If the indenture to be qualified is or is to be secured by the

mortgage or pledge of property, the obligor upon the indenture

securities shall furnish to the indenture trustee -

(1) promptly after the execution and delivery of the indenture,

an opinion of counsel (who may be of counsel for such obligor)

either stating that in the opinion of such counsel the indenture

has been properly recorded and filed so as to make effective the

lien intended to be created thereby, and reciting the details of

such action, or stating that in the opinion of such counsel no

such action is necessary to make such lien effective; and

(2) at least annually after the execution and delivery of the

indenture, an opinion of counsel (who may be of counsel for such

obligor) either stating that in the opinion of such counsel such

action has been taken with respect to the recording, filing,

re-recording, and refiling of the indenture as is necessary to

maintain the lien of such indenture, and reciting the details of

such action, or stating that in the opinion of such counsel no

such action is necessary to maintain such lien.

(c) Evidence of compliance with conditions precedent

The obligor upon the indenture securities shall furnish to the

indenture trustee evidence of compliance with the conditions

precedent, if any, provided for in the indenture (including any

covenants compliance with which constitutes a condition precedent)

which relate to the authentication and delivery of the indenture

securities, to the release or the release and substitution of

property subject to the lien of the indenture, to the satisfaction

and discharge of the indenture, or to any other action to be taken

by the indenture trustee at the request or upon the application of

such obligor. Such evidence shall consist of the following:

(1) certificates or opinions made by officers of such obligor

who are specified in the indenture, stating that such conditions

precedent have been complied with;

(2) an opinion of counsel (who may be of counsel for such

obligor) stating that in his opinion such conditions precedent

have been complied with; and

(3) in the case of conditions precedent compliance with which

is subject to verification by accountants (such as conditions

with respect to the preservation of specified ratios, the amount

of net quick assets, negative-pledge clauses, and other similar

specific conditions), a certificate or opinion of an accountant,

who, in the case of any such conditions precedent to the

authentication and delivery of indenture securities, and not

otherwise, shall be an independent public accountant selected or

approved by the indenture trustee in the exercise of reasonable

care, if the aggregate principal amount of such indenture

securities and of other indenture securities authenticated and

delivered since the commencement of the then current calendar

year (other than those with respect to which a certificate or

opinion of an accountant is not required, or with respect to

which a certificate or opinion of an independent public

accountant has previously been furnished) is 10 per centum or

more of the aggregate amount of the indenture securities at the

time outstanding; but no certificate or opinion need be made by

any person other than an officer or employee of such obligor who

is specified in the indenture, as to (A) dates or periods not

covered by annual reports required to be filed by the obligor, in

the case of conditions precedent which depend upon a state of

facts as of a date or dates or for a period or periods different

from that required to be covered by such annual reports, or (B)

the amount and value of property additions, except as provided in

paragraph (3) of subsection (d) of this section, or (C) the

adequacy of depreciation, maintenance, or repairs.

(d) Certificates of fair value

If the indenture to be qualified is or is to be secured by the

mortgage or pledge of property or securities, the obligor upon the

indenture securities shall furnish to the indenture trustee a

certificate or opinion of an engineer, appraiser, or other expert

as to the fair value -

(1) of any property or securities to be released from the lien

of the indenture, which certificate or opinion shall state that

in the opinion of the person making the same the proposed release

will not impair the security under such indenture in

contravention of the provisions thereof, and requiring further

that such certificate or opinion shall be made by an independent

engineer, appraiser, or other expert, if the fair value of such

property or securities and of all other property or securities

released since the commencement of the then current calendar

year, as set forth in the certificates or opinions required by

this paragraph, is 10 per centum or more of the aggregate

principal amount of the indenture securities at the time

outstanding; but such a certificate or opinion of an independent

engineer, appraiser, or other expert shall not be required in the

case of any release of property or securities, if the fair value

thereof as set forth in the certificate or opinion required by

this paragraph is less than $25,000 or less than 1 per centum of

the aggregate principal amount of the indenture securities at the

time outstanding;

(2) to such obligor of any securities (other than indenture

securities and securities secured by a lien prior to the lien of

the indenture upon property subject to the lien of the

indenture), the deposit of which with the trustee is to be made

the basis for the authentication and delivery of indenture

securities, the withdrawal of cash constituting a part of the

trust estate or the release of property or securities subject to

the lien of the indenture, and requiring further that if the fair

value to such obligor of such securities and of all other such

securities made the basis of any such authentication and

delivery, withdrawal, or release since the commencement of the

then current calendar year, as set forth in the certificates or

opinions required by this paragraph, is 10 per centum or more of

the aggregate principal amount of the indenture securities at the

time outstanding, such certificate or opinion shall be made by an

independent engineer, appraiser, or other expert and, in the case

of the authentication and delivery of indenture securities, shall

cover the fair value to such obligor of all other such securities

so deposited since the commencement of the current calendar year

as to which a certificate or opinion of an independent engineer,

appraiser, or other expert has not previously been furnished; but

such a certificate of an independent engineer, appraiser, or

other expert shall not be required with respect to any securities

so deposited, if the fair value thereof to such obligor as set

forth in the certificate or opinion required by this paragraph is

less than $25,000 or less than 1 per centum of the aggregate

principal amount of the indenture securities at the time

outstanding; and

(3) to such obligor of any property the subjection of which to

the lien of the indenture is to be made the basis for the

authentication and delivery of indenture securities, the

withdrawal of cash constituting a part of the trust estate, or

the release of property or securities subject to the lien of the

indenture, and requiring further that if

(A) within six months prior to the d'te of acquisition

thereof by such obligor, such property has been used or

operated, by a person or persons other than such obligor, in a

business similar to that in which it has been or is to be used

or operated by such obligor, and

(B) the fair value to such obligor of such property as set

forth in such certificate or opinion is not less than $25,000

and not less than 1 per centum of the aggregate principal

amount of the indenture securities at the time outstanding,

such certificate or opinion shall be made by an independent

engineer, appraiser, or other expert and, in the case of the

authentication and delivery of indenture securities, shall cover

the fair value to the obligor of any property so used or operated

which has been so subjected to the lien of the indenture since

the commencement of the then current calendar year, and as to

which a certificate or opinion of an independent engineer,

appraiser, or other expert has not previously been furnished.

The indenture to be qualified shall automatically be deemed (unless

it is expressly provided therein that such provision is excluded)

to provide that any such certificate or opinion may be made by an

officer or employee of the obligor upon the indenture securities

who is duly authorized to make such certificate or opinion by the

obligor from time to time, except in cases in which this subsection

requires that such certificate or opinion be made by an independent

person. In such cases, such certificate or opinion shall be made

by an independent engineer, appraiser, or other expert selected or

approved by the indenture trustee in the exercise of reasonable

care.

(e) Recitals as to basis of certificate or opinion

Each certificate or opinion with respect to compliance with a

condition or covenant provided for in the indenture (other than

certificates provided pursuant to subsection (a)(4) of this

section) shall include (1) a statement that the person making such

certificate or opinion has read such covenant or condition; (2) a

brief statement as to the nature and scope of the examination or

investigation upon which the statements or opinions contained in

such certificate or opinion are based; (3) a statement that, in the

opinion of such person, he has made such examination or

investigation as is necessary to enable him to express an informed

opinion as to whether or not such covenant or condition has been

complied with; and (4) a statement as to whether or not, in the

opinion of such person, such condition or covenant has been

complied with.

(f) Parties may provide for additional evidence

Nothing in this section shall be construed either as requiring

the inclusion in the indenture to be qualified of provisions that

the obligor upon the indenture securities shall furnish to the

indenture trustee any other evidence of compliance with the

conditions and covenants provided for in the indenture than the

evidence specified in this section, or as preventing the inclusion

of such provisions in such indenture, if the parties so agree.

-SOURCE-

(May 27, 1933, ch. 38, title