§ 77r. — Exemption from State regulation of securities offerings.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC77r]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2A--SECURITIES AND TRUST INDENTURES
SUBCHAPTER I--DOMESTIC SECURITIES
Sec. 77r. Exemption from State regulation of securities
offerings
(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.
(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, Secs. 301(a)(4), 302, Nov. 3, 1998, 112 Stat. 3235, 3237.)
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.
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.''
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, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat.
1265, set out under section 78d of this title.
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.''
Section Referred to in Other Sections
This section is referred to in sections 77p, 78bb, 6701 of this
title.
