CITE

    15 USC Sec. 77r                                             01/08/2008

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, 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."