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

AN ACT To provide full and fair disclosure of the character of securities sol

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,



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


SEC. 2. (77b) (a) DEFINITIONS.—When used in this title, unl the context otherwise requires

(1) The term "security" means any note, stock, treası stock, security future, bond, debenture, evidence of indebt ness, certificate of interest or participation in any profit-sh ing agreement, collateral-trust certificate, preorganization c tificate or subscription, transferable share, investment co tract, voting-trust certificate, certificate of deposit for a ser rity, fractional undivided interest in oil, gas, or other mine: rights, any put, call, straddle, option, or privilege on any set 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 on 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, te porary or interim certificate for, receipt for, guarantee of, warrant or right to subscribe to or purchase, any of the fo going.

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

(3) The term “sale” or “sell” shall include every contract sale or disposition of a security or interest in a security, value. The term "offer to sell", "offer for sale", or "offer" sh include every attempt or offer to dispose of, or solicitation an offer to buy, a security or interest in a security, for vali The terms defined in this paragraph and the term "offer 3

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 coi merce in securities or any transportation or communication r lating thereto among the several States or between the Distri of Columbia or any Territory of the United States and ai State or other Territory, or between any foreign country ar any State, Territory, or the District of Columbia, or within tl District of Columbia.

(8) The term “registration statement” means the statemei 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 printer lithographed, or any means of graphic communication.

(10) The term “prospectus” means any prospectus, notic circular, advertisement, letter, or communication, written or b radio or television, which offers any security for sale or cor firms the sale of any security; except that (a) a communicatio sent or given after the effective date of the registration state ment (other than a prospectus permitted under subsection (k of section 10) shall not be deemed a prospectus if it is prove that prior to or at the same time with such communication written prospectus meeting the requirements of subsection (a of section 10 at the time of such communication was sent o given to the person to whom the communication was made and (b) a notice, circular, advertisement, letter, or communica tion in respect of a security shall not be deemed to be a pro spectus if it states from whom a written prospectus meeting the requirements of section 10 may be obtained and, in addi tion, does no more than identify the security, state the price thereof, state by whom orders will be executed, and contair such other information as the Commission, by rules or regula tions 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.

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

(12) The term "dealer" means any person who engages ei ther for all or part of his time, directly or indirectly, as agent broker, or principal, in the business of offering, buying, selling or otherwise dealing or trading in securities issued by another

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

(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

(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.

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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