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SECURITIES ACT OF 1933

(References in brackets [ ] are to title 15, United States Code)

AN ACT To provide full and fair disclosure of the character of securities so interstate and foreign commerce and through the mails, and to prevent frau the sale thereof, and for other purposes.

Be it enacted by the Senate and House of Representatives of United States of America in Congress assembled,

TITLE I

SHORT TITLE

SECTION 1. [77a] This title may be cited as the "Securities of 1933".

DEFINITIONS

SEC. 2. [77b] (a) DEFINITIONS.-When used in this title, un the context otherwise requires

(1) The term "security" means any note, stock, treas stock, security future, bond, debenture, evidence of indeb ness, certificate of interest or participation in any profit-s ing agreement, collateral-trust certificate, preorganization tificate or subscription, transferable share, investment tract, voting-trust certificate, certificate of deposit for a s rity, fractional undivided interest in oil, gas, or other min rights, any put, call, straddle, option, or privilege on any s rity, certificate of deposit, or group or index of securities cluding any interest therein or based on the value thereof any put, call, straddle, option, or privilege entered into o national securities exchange relating to foreign currency, or general, any interest or instrument commonly known as a curity", or any certificate of interest or participation in, t porary or interim certificate for, receipt for, guarantee of warrant or right to subscribe to or purchase, any of the f going.

(2) The term "person" means an individual, a corporat a partnership, an association, a joint-stock company, a tr any unincorporated organization, or a government or polit subdivision thereof. As used in this paragraph the term "tr shall include only a trust where the interest or interests of beneficiary or beneficiaries are evidenced by a security.

(3) The term "sale" or "sell" shall include every contrac sale or disposition of a security or interest in a security, value. The term "offer to sell", "offer for sale", or "offer" s include every attempt or offer to dispose of, or solicitation an offer to buy, a security or interest in a security, for va The terms defined in this paragraph and the term "offe

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buy" as used in subsection (c) of section 5 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 lands, and the insular possessions of the United States. 1

(7) The term "interstate commerce" means trade or co merce in securities or any transportation or communication lating thereto among the several States or between the Distr of Columbia or any Territory of the United States and a State or other Territory, or between any foreign country a any State, Territory, or the District of Columbia, or within t District of Columbia.

(8) The term "registration statement" means the stateme provided for in section 6, and includes any amendment there and any report, document, or memorandum filed as part such statement or incorporated therein by reference.

(9) The term "write" or "written" shall include print lithographed, or any means of graphic communication.

(10) The term "prospectus" means any prospectus, noti circular, advertisement, letter, or communication, written or radio or television, which offers any security for sale or co firms the sale of any security; except that (a) a communicati sent or given after the effective date of the registration sta ment (other than a prospectus permitted under subsection of section 10) shall not be deemed a prospectus if it is prov that prior to or at the same time with such communication written prospectus meeting the requirements of subsection of section 10 at the time of such communication was sent given to the person to whom the communication was ma and (b) a notice, circular, advertisement, letter, or communic tion in respect of a security shall not be deemed to be a p spectus if it states from whom a written prospectus meeti the requirements of section 10 may be obtained and, in ad tion, does no more than identify the security, state the pr thereof, state by whom orders will be executed, and conta such other information as the Commission, by rules or regu tions deemed necessary or appropriate in the public inter and for the protection of investors, and subject to such ter and conditions as may be prescribed therein, may permit.

(11) The term "underwriter" means any person who purchased from an issuer with a view to, or offers or sells an issuer in connection with, the distribution of any securi or participates or has a direct or indirect participation in a such undertaking, or participates or has a participation in t direct or indirect underwriting of any such undertaking; such term shall not include a person whose interest is limit to a commission from an underwriter or dealer not in exc of the usual and customary distributors' or sellers' commissi As used in this paragraph the term "issuer" shall include, addition to an issuer, any person directly or indirectly contr ling or controlled by the issuer, or any person under direct indirect common control with the issuer.

(12) The term "dealer" means any person who engages ther for all or part of his time, directly or indirectly, as age broker, or principal, in the business of offering, buying, selli

The words "Philippine Islands" were deleted from the definition of the term "Territory the basis of Presidential Proclamation No. 2695, effective July 4, 1946 (11 F.R. 7517; 60 { 1352), which granted independence to the Philippine Islands.

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 compa-
nies, and which is subject to supervision by the insurance com-
missioner, 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 estab-
lished and maintained by an insurance company pursuant to.
the laws of any State or territory of the United States, the Dis-
trict 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 insur-
ance company.

(15) The term "accredited investor" shall mean—

(i) a bank as defined in section 3(a)(2) whether acting
in its individual or fiduciary capacity; an insurance com-
pany as defined in paragraph (13) of this subsection; an in-
vestment company registered under the Investment Com-
pany Act of 1940 or a business development company as
defined in section 2(a)(48) of that Act; a Small Business In-
vestment Company licensed by the Small Business Admin-
istration; or an employee benefit plan, including an indi-
vidual retirement account, which is subject to the provi-
sions of the Employee Retirement Income Security Act of
1974,1 if the investment decision is made by a plan fidu-
ciary, as defined in section 3(21) of such Act, which is ei-
ther a bank, insurance company, or registered investment
adviser; or

(ii) any person who, on the basis of such factors as fi-
nancial sophistication, net worth, knowledge, and experi-
ence in financial matters, or amount of assets under man-
agement 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 3(a)(55) of the Securities Exchange Act
of 1934.

(b) CONSIDERATION OF PROMOTION OF EFFICIENCY, COMPETI-
TION, AND CAPITAL FORMATION.-Whenever pursuant to this title
the Commission is engaged in rulemaking and is required to
consider or determine whether an action is necessary or appro-
priate in the public interest, the Commission shall also consider, in
addition to the protection of investors, whether the action will pro-
mote efficiency, competition, and capital formation.

129 U.S.C. 1001 et seq. [Printed in appendix to this volume.]

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