CITE

    15 USC Sec. 78p                                             01/08/2008

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2B - SECURITIES EXCHANGES

HEAD

    Sec. 78p. Directors, officers, and principal stockholders

STATUTE

    (a) Disclosures required
      (1) Directors, officers, and principal stockholders required to
        file
        Every person who is directly or indirectly the beneficial owner
      of more than 10 percent of any class of any equity security
      (other than an exempted security) which is registered pursuant to
      section 78l of this title, or who is a director or an officer of
      the issuer of such security, shall file the statements required
      by this subsection with the Commission (and, if such security is
      registered on a national securities exchange, also with the
      exchange).
      (2) Time of filing
        The statements required by this subsection shall be filed -
          (A) at the time of the registration of such security on a
        national securities exchange or by the effective date of a
        registration statement filed pursuant to section 78l(g) of this
        title;
          (B) within 10 days after he or she becomes such beneficial
        owner, director, or officer;
          (C) if there has been a change in such ownership, or if such
        person shall have purchased or sold a security-based swap
        agreement (as defined in section 206(b) (!1) of the Gramm-Leach-
        Bliley Act (15 U.S.C. 78c note)) involving such equity
        security, before the end of the second business day following
        the day on which the subject transaction has been executed, or
        at such other time as the Commission shall establish, by rule,
        in any case in which the Commission determines that such 2-day
        period is not feasible.
      (3) Contents of statements
        A statement filed -
          (A) under subparagraph (A) or (B) of paragraph (2) shall
        contain a statement of the amount of all equity securities of
        such issuer of which the filing person is the beneficial owner;
        and
          (B) under subparagraph (C) of such paragraph shall indicate
        ownership by the filing person at the date of filing, any such
        changes in such ownership, and such purchases and sales of the
        security-based swap agreements as have occurred since the most
        recent such filing under such subparagraph.
      (4) Electronic filing and availability
        Beginning not later than 1 year after July 30, 2002 -
          (A) a statement filed under subparagraph (C) of paragraph (2)
        shall be filed electronically;
          (B) the Commission shall provide each such statement on a
        publicly accessible Internet site not later than the end of the
        business day following that filing; and
          (C) the issuer (if the issuer maintains a corporate website)
        shall provide that statement on that corporate website, not
        later than the end of the business day following that filing.
    (b) Profits from purchase and sale of security within six months
      For the purpose of preventing the unfair use of information which
    may have been obtained by such beneficial owner, director, or
    officer by reason of his relationship to the issuer, any profit
    realized by him from any purchase and sale, or any sale and
    purchase, of any equity security of such issuer (other than an
    exempted security) or a security-based swap agreement (as defined
    in section 206B of the Gramm-Leach-Bliley Act) involving any such
    equity security within any period of less than six months, unless
    such security or security-based swap agreement was acquired in good
    faith in connection with a debt previously contracted, shall inure
    to and be recoverable by the issuer, irrespective of any intention
    on the part of such beneficial owner, director, or officer in
    entering into such transaction of holding the security or security-
    based swap agreement purchased or of not repurchasing the security
    or security-based swap agreement sold for a period exceeding six
    months. Suit to recover such profit may be instituted at law or in
    equity in any court of competent jurisdiction by the issuer, or by
    the owner of any security of the issuer in the name and in behalf
    of the issuer if the issuer shall fail or refuse to bring such suit
    within sixty days after request or shall fail diligently to
    prosecute the same thereafter; but no such suit shall be brought
    more than two years after the date such profit was realized. This
    subsection shall not be construed to cover any transaction where
    such beneficial owner was not such both at the time of the purchase
    and sale, or the sale and purchase, of the security or security-
    based swap agreement (as defined in section 206B of the Gramm-
    Leach-Bliley Act) involved, or any transaction or transactions
    which the Commission by rules and regulations may exempt as not
    comprehended within the purpose of this subsection.
    (c) Conditions for sale of security by beneficial owner, director,
      or officer
      It shall be unlawful for any such beneficial owner, director, or
    officer, directly or indirectly, to sell any equity security of
    such issuer (other than an exempted security), if the person
    selling the security or his principal (1) does not own the security
    sold, or (2) if owning the security, does not deliver it against
    such sale within twenty days thereafter, or does not within five
    days after such sale deposit it in the mails or other usual
    channels of transportation; but no person shall be deemed to have
    violated this subsection if he proves that notwithstanding the
    exercise of good faith he was unable to make such delivery or
    deposit within such time, or that to do so would cause undue
    inconvenience or expense.
    (d) Securities held in investment account, transactions in ordinary
      course of business, and establishment of primary or secondary
      market
      The provisions of subsection (b) of this section shall not apply
    to any purchase and sale, or sale and purchase, and the provisions
    of subsection (c) of this section shall not apply to any sale, of
    an equity security not then or theretofore held by him in an
    investment account, by a dealer in the ordinary course of his
    business and incident to the establishment or maintenance by him of
    a primary or secondary market (otherwise than on a national
    securities exchange or an exchange exempted from registration under
    section 78e of this title) for such security. The Commission may,
    by such rules and regulations as it deems necessary or appropriate
    in the public interest, define and prescribe terms and conditions
    with respect to securities held in an investment account and
    transactions made in the ordinary course of business and incident
    to the establishment or maintenance of a primary or secondary
    market.
    (e) Application of section to foreign or domestic arbitrage
      transactions
      The provisions of this section shall not apply to foreign or
    domestic arbitrage transactions unless made in contravention of
    such rules and regulations as the Commission may adopt in order to
    carry out the purposes of this section.
    (f) Treatment of transactions in security futures products
      The provisions of this section shall apply to ownership of and
    transactions in security futures products.
    (g) Limitation on Commission authority
      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 78c-1(b) of this title.

SOURCE

    (June 6, 1934, ch. 404, title I, Sec. 16, 48 Stat. 896; Pub. L. 88-
    467, Sec. 8, Aug. 20, 1964, 78 Stat. 579; Pub. L. 106-554, Sec.
    1(a)(5) [title II, Sec. 208(b)(3), title III, Sec. 303(g), (h)],
    Dec. 21, 2000, 114 Stat. 2763, 2763A-435, 2763A-455, 2763A-456;
    Pub. L. 107-204, title IV, Sec. 403(a), July 30, 2002, 116 Stat.
    788.)

REFERENCES IN TEXT

      Section 206(b) of the Gramm-Leach-Bliley Act, referred to in
    subsec. (a)(2)(C), probably means section 206B of Pub. L. 106-102,
    which is set out in a note under section 78c of this title.
      Section 206B of the Gramm-Leach-Bliley Act, referred to in
    subsecs. (b) and (g), is section 206B of Pub. L. 106-102, which is
    set out in a note under section 78c of this title.

AMENDMENTS

      2002 - Pub. L. 107-204 reenacted section catchline without
    change, added heading and text of subsec. (a), and struck out
    former subsec. (a) which read as follows: "Every person who is
    directly or indirectly the beneficial owner of more than 10 per
    centum of any class of any equity security (other than an exempted
    security) which is registered pursuant to section 78l of this
    title, or who is a director or an officer of the issuer of such
    security, shall file, at the time of the registration of such
    security on a national securities exchange or by the effective date
    of a registration statement filed pursuant to section 78l(g) of
    this title, or within ten days after he becomes such beneficial
    owner, director, or officer, a statement with the Commission (and,
    if such security is registered on a national securities exchange,
    also with the exchange) of the amount of all equity securities of
    such issuer of which he is the beneficial owner, and within ten
    days after the close of each calendar month thereafter, if there
    has been a change in such ownership or if such person shall have
    purchased or sold a security-based swap agreement (as defined in
    section 206B of the Gramm-Leach-Bliley Act) involving such equity
    security during such month, shall file with the Commission (and if
    such security is registered on a national securities exchange,
    shall also file with the exchange), a statement indicating his
    ownership at the close of the calendar month and such changes in
    his ownership and such purchases and sales of such security-based
    swap agreements as have occurred during such calendar month."
      2000 - Subsecs. (a), (b). Pub. L. 106-554, Sec. 1(a)(5) [title
    III, Sec. 303(g)], amended subsecs. (a) and (b) generally, revising
    provisions to extend application to security-based swap agreements.
      Subsec. (f). Pub. L. 106-554, Sec. 1(a)(5) [title II, Sec.
    208(b)(3)], added subsec. (f).
      Subsec. (g). Pub. L. 106-554, Sec. 1(a)(5) [title III, Sec.
    303(h)], added subsec. (g).
      1964 - Subsec. (a). Pub. L. 88-467, Sec. 8(a), substituted
    "registered pursuant to section 78l of this title" for "registered
    on a national securities exchange", "Commission (and, if such
    security is registered on a national securities exchange, also with
    the exchange)" for "exchange (and a duplicate original thereof with
    the Commission)", "a change" for "any change", and "Commission (and
    if such security is registered on a national securities exchange,
    shall also file with the exchange) a statement" for "exchange a
    statement (and a duplicate original thereof with the Commission)",
    and inserted "on a national securities exchange or by the effective
    date of a registration statement filed pursuant to section 78l(g)
    of this title" after "registration of such security".
      Subsecs. (d), (e). Pub. L. 88-467, Sec. 8(b), added subsec. (d)
    and redesignated former subsec. (d) as (e).
                     EFFECTIVE DATE OF 2002 AMENDMENT
      Pub. L. 107-204, title IV, Sec. 403(b), July 30, 2002, 116 Stat.
    789, provided that: "The amendment made by this section [amending
    this section] shall be effective 30 days after the date of the
    enactment of this Act [July 30, 2002]."
                     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.

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.

FOOTNOTE

    (!1) See References in Text note below.