violation of this title or the rules, regulations, or orders thereunder. Any criminal proceeding may be brought in the district wherein any act or transaction constituting the violation occurred. Any suit or action to enjoin any violation of this title or rules, regulations, or orders thereunder, may be brought in any such district or in the district wherein the defendant is an inhabitant or transacts business, and process in such cases may be served in any district of which the defendant is an inhabitant or transacts business or wherever the defendant may be found. Judgments and decrees so rendered shall be subject to review as provided in sections 128 and 240 of the Judicial Code, as amended, and section 7, as amended, of the Act entitled "An Act to establish a court of appeals for the District of Columbia", approved February 9, 1893. No costs shall be assessed for or against the Commission in any proceeding under this title brought by or against the Commission in any court. VALIDITY OF CONTRACTS SEC. 215. (a) Any condition, stipulation, or provision binding any person to waive compliance with any provision of this title or with any rule, regulation, or order thereunder shall be void. (b) Every contract made in violation of any provision of this title and every contract heretofore or hereafter made, the performance of which involves the violation of, or the continuance of any relationship or practice in violation of any provision of this title, or any rule, regulation, or order thereunder, shall be void (1) as regards the rights of any person who, in violation of any such provision, rule, regulation, or order, shall have made or engaged in the performance of any such contract, and (2) as regards the rights of any person who, not being a party to such contract, shall have acquired any right thereunder with actual knowledge of the facts by reason of which the making or performance of such contract was in violation of any such provision. ANNUAL REPORTS OF COMMISSION SEC. 216. The Commission shall submit annually a report to the Congress covering the work of the Commission for the preceding year and including such information, data, and recommendations for further legislation in connection with the matters covered by this title as it may find advisable. PENALTIES SEC. 217. Any person who willfully violates any provision of this title shall, upon conviction, be fined not more than $10,000, imprisoned for not more than two years, or both. EMPLOYEES OF THE COMMISSION SEC. 218. For the purposes of this title, the Commission may select employ, and fix the compensation of such attorneys, examiners, and other experts as shall be necessary for the transaction of the business of the Commission in respect of this title without regard to the provisions of other laws applicable to the employment and com pensation of officers or employees of the United States; and the Commission may, subject to the civil-service laws, appoint such other officers and employees as are necessary in the execution of the functions of the Commission and fix their salaries in accordance with the Classification Act of 1923, as amended. SEPARABILITY OF PROVISIONS SEC. 219. If any provision of this title or the application of such provision to any person or circumstances shall be held invalid, the remainder of the title and the application of such provision to persons or circumstances other than those as to which it is held invalid shall not be affected thereby. SHORT TITLE SEC. 220. This title may be cited as the "Investment Advisers Act of 1940". EFFECTIVE DATE SEC. 221. This title shall become effective on November 1, 1940. TITLE III-AMENDMENT OF SECURITIES ACT OF 1933 SEC. 301. Section 8 (a) of the Securities Act of 1933, as amended, is amended to read as follows: "SEC. 8. (a) 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." Approved, August 22, 1940. [PUBLIC LAW 258-78TH CONGRESS] [CHAPTER 101-2D SESSION] [S. 1146] AN ACT To amend section 31 of the Securities Exchange Act of 1934. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 31 of the Securities Exchange Act of 1934 is amended to read as follows: "REGISTRATION FEES "SEC. 31. Every national securities exchange shall pay to the Commission on or before March 15 of each calendar year a registration fee for the privilege of doing business as a national securities exchange during the preceding calendar year or any part thereof. Such fee shall be in an amount equal to one five-hundredths of 1 per centum of the aggregate dollar amount of the sales of securities (other than securities which are direct obligations of or obligations guaranteed as to principal or interest by the United States or such securities issued or guaranteed by corporations in which the United States has a direct or an indirect interest as shall be designated for exemption from the provisions of this section by the Secretary of the Treasury) transacted on such national securities exchange during the preceding calendar year and subsequent to its registration as a national securities exchange." Approved March 17, 1944. [PUBLIC LAW 55-79TH CONGRESS] AN ACT To amend section 3 (b) of the Securities Act of 1933, as amended, so as to permit exemption of security issues not exceeding $300,000 from the provisions of such Act. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (b) of section 3 of the Securities Act of 1933, as amended, is amended by striking out "$100,000" where it appears in such subsection, and inserting in lieu thereof "$300,000". Approved May 15, 1945. (273) Chapter 667 2d Session S. 2846 AN ACT To amend certain provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Trust Indenture Act of 1939, and the Investment Company Act of 1940. Be it enacted by the Senate and House of Representatives of the. United States of America in Congress assembled, TITLE I-AMENDMENTS TO SECURITIES ACT OF 1933, AS AMENDED Securitie etc. Amendment SECTION 1. Paragraph (3) of section 2 of the Securities Act of 1933 48 Stat. is amended to read as follows: 15 USC 77 "(3) The term 'sale' or 'sell' shall include every contract of sale or "Sale", 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 5 shall Post, p. 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." SEC. 2. Paragraph (8) of section 2 of the Securities Act of 1933 15 USC 77 is amended to read as follows: "(8) The term 'registration statement' means the statement pro- "Registra vided for in section 6, and includes any amendment thereto and statement any report, document, or memorandum filed as part of such statement or 15 USC 77 incorporated therein by reference." SEC. 3. Paragraph (10) of section 2 of the Securities Act of 1933, 15 USC 77 as amended, is amended to read as follows: e 68 Stat. I "(10) The term 'prospectus' means any prospectus, notice, circular, "Prospect advertisement, letter, or communication, written or by radio or television, which offers any security for sale or confirms the sale of any 68 Stat. 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 10) shall not be deemed a Post, p. 6 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 10 at the time of 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 (274) a written prospectus meeting the requirements of section 10 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." SEC. 4. Paragraph (11) of section 2 of the Securities Act of 1933 is amended by inserting the words "offers or" before the word "sells". SEC. 5. Paragraph (11) of section 3 (a) of the Securities Act of 1933, as amended, is amended by inserting the words "offered and” before the word "sold". SEC. 6. Section 4 (1) of the Securities Act of 1933, as amended, is amended to read as follows: "(1) Transactions by any person other than an issuer, underwriter, or dealer; transactions by an issuer not involving any public offering; or transactions by a dealer (including an underwriter no longer acting as an underwriter in respect of the security involved in such transaction), except 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 and 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 8 is in effect as to the security), and except 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." SEC. 7. Section 5 of the Securities Act of 1933 is amended to read as follows: "PROHIBITIONS RELATING TO INTERSTATE COMMERCE AND THE MAILS "SEC. 5. (a) 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) 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 title, unless such prospectus meets the requirements of section 10; 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 10. "(c) It shall be unlawful for any person, directly or indirectly, to make use of any means or instruments of transportation or communi |