15 USC 77r - Exemption from State regulation of securities offerings

U.S Code last checked for updates: Nov 22, 2024

§ 77r.

Exemption from State regulation of securities offerings

(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), 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)

a security designated as qualified for trading in the national market system pursuant to section 78k–1(a)(2) of this title that is listed, or authorized for listing, on a national securities exchange (or tier or segment thereof); or

(B)

a security of the same issuer that is equal in seniority or that is a senior security to a security described in subparagraph (A).

(2)

Exclusive Federal registration of investment companies

(3)

Sales to qualified purchasers

(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 1

 See References in Text note below.

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) ¹ of this title;

(C)

section 77d(6) ¹ of this title;

(D)

a rule or regulation adopted pursuant to section 77c(b)(2) of this title and such security is—

(i)

offered or sold on a national securities exchange; or

(ii)

offered or sold to a qualified purchaser, as defined by the Commission pursuant to paragraph (3) with respect to that purchase or sale;

(E)

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;

(F)

Commission rules or regulations issued under section 77d(2) ¹ 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) ¹ of this title that are in effect on September 1, 1996; or

(G)

section 77d(a)(7) of this title.

(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, in connection with securities or securities transactions 2

 So in original. The comma after “enforcement actions” probably should be a hyphen and the words “in connection with securities or securities transactions” probably should be part of subpar. (A).

(A)

with respect to—

(i)

fraud or deceit; or

(ii)

unlawful conduct by a broker, dealer, or funding portal; and

(B)

in connection to 3

 So in original. Probably should be “with”.

a transaction described under section 77d(6) ¹ of this title, with respect to—

(i)

fraud or deceit; or

(ii)

unlawful conduct by a broker, dealer, funding portal, or issuer.

(2)

Preservation of filing requirements

(A)

Notice filings permitted

(B)

Preservation of fees

(i)

In general

(ii)

Schedule

(C)

Availability of preemption contingent on payment of fees

(i)

In general

(ii)

Delays

(D)

Fees not permitted on listed securities

(F)

 So in original. No subpar. (E) has been enacted.

Fees not permitted on crowdfunded securities

(3)

Enforcement of requirements

(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

(3)

State

(4)

Senior security

(May 27, 1933, ch. 38, title I, § 18, 48 Stat. 85; Pub. L. 104–290, title I, § 102(a), Oct. 11, 1996, 110 Stat. 3417; Pub. L. 105–353, title III, §§ 301(a)(4), 302, Nov. 3, 1998, 112 Stat. 3235, 3237; Pub. L. 111–203, title IX, § 985(a)(2), July 21, 2010, 124 Stat. 1933; Pub. L. 112–106, title III, § 305(a), (b)(2), (c), (d)(2), title IV, § 401(b), Apr. 5, 2012, 126 Stat. 322, 323, 325; Pub. L. 114–94, div. G, title LXXVI, § 76001(b), Dec. 4, 2015, 129 Stat. 1789; Pub. L. 115–174, title V, § 501, May 24, 2018, 132 Stat. 1361.)

cite as: 15 USC 77r