§ 78bb.
(e)
Exchange, broker, and dealer commissions; brokerage and research services
(1)
No person using the mails, or any means or instrumentality of interstate commerce, in the exercise of investment discretion with respect to an account shall be deemed to have acted unlawfully or to have breached a fiduciary duty under State or Federal law unless expressly provided to the contrary by a law enacted by the Congress or any State subsequent to June 4, 1975, solely by reason of his having caused the account to pay a member of an exchange, broker, or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of an exchange, broker, or dealer would have charged for effecting that transaction, if such person determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such member, broker, or dealer, viewed in terms of either that particular transaction or his overall responsibilities with respect to the accounts as to which he exercises investment discretion. This subsection is exclusive and plenary insofar as conduct is covered by the foregoing, unless otherwise expressly provided by contract: Provided, however, That nothing in this subsection shall be construed to impair or limit the power of the Commission under any other provision of this chapter or otherwise.
(2)
A person exercising investment discretion with respect to an account shall make such disclosure of his policies and practices with respect to commissions that will be paid for effecting securities transactions, at such times and in such manner, as the appropriate regulatory agency, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors.
(3)
For purposes of this subsection a person provides brokerage and research services insofar as he—
(A)
furnishes advice, either directly or through publications or writings, as to the value of securities, the advisability of investing in, purchasing, or selling securities, and the availability of securities or purchasers or sellers of securities;
(B)
furnishes analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of accounts; or
(C)
effects securities transactions and performs functions incidental thereto (such as clearance, settlement, and custody) or required in connection therewith by rules of the Commission or a self-regulatory organization of which such person is a member or person associated with a member or in which such person is a participant.
(4)
The provisions of this subsection shall not apply with regard to securities that are security futures products.
(f)
Limitations on remedies
(1)
Class action limitations
No covered class action based upon the statutory or common law of any State or subdivision thereof may be maintained in any State or Federal court by any private party alleging—
(A)
a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security; or
(B)
that the defendant used or employed any manipulative or deceptive device or contrivance in connection with the purchase or sale of a covered security.
(2)
Removal of covered class actions
(3)
Preservation of certain actions
(A)
Actions under State law of State of incorporation
(ii)
Permissible actions
A covered class action is described in this clause if it involves—
(I)
the purchase or sale of securities by the issuer or an affiliate of the issuer exclusively from or to holders of equity securities of the issuer; or
(II)
any recommendation, position, or other communication with respect to the sale of securities of an issuer that—
(aa)
is made by or on behalf of the issuer or an affiliate of the issuer to holders of equity securities of the issuer; and
(bb)
concerns decisions of such equity holders with respect to voting their securities, acting in response to a tender or exchange offer, or exercising dissenters’ or appraisal rights.
(B)
State actions
(ii)
State pension plan defined
(C)
Actions under contractual agreements between issuers and indenture trustees
(D)
Remand of removed actions
(4)
Preservation of State jurisdiction
(5)
Definitions
For purposes of this subsection, the following definitions shall apply:
(A)
Affiliate of the issuer
(B)
Covered class action
The term “covered class action” means—
(i)
any single lawsuit in which—
(I)
damages are sought on behalf of more than 50 persons or prospective class members, and questions of law or fact common to those persons or members of the prospective class, without reference to issues of individualized reliance on an alleged misstatement or omission, predominate over any questions affecting only individual persons or members; or
(II)
one or more named parties seek to recover damages on a representative basis on behalf of themselves and other unnamed parties similarly situated, and questions of law or fact common to those persons or members of the prospective class predominate over any questions affecting only individual persons or members; or
(ii)
any group of lawsuits filed in or pending in the same court and involving common questions of law or fact, in which—
(I)
damages are sought on behalf of more than 50 persons; and
(II)
the lawsuits are joined, consolidated, or otherwise proceed as a single action for any purpose.
(C)
Exception for derivative actions
(D)
Counting of certain class members
([June 6, 1934, ch. 404], title I, § 28, [48 Stat. 903]; [Pub. L. 94–29, § 21], June 4, 1975, [89 Stat. 160]; [Pub. L. 97–303, § 4], Oct. 13, 1982, [96 Stat. 1409]; [Pub. L. 100–181, title III], §§ 327–329, Dec. 4, 1987, [101 Stat. 1259]; [Pub. L. 104–290, title I, § 103(b)], Oct. 11, 1996, [110 Stat. 3422]; [Pub. L. 105–353, title I, § 101(b)(1)], Nov. 3, 1998, [112 Stat. 3230]; [Pub. L. 106–554, § 1(a)(5) [title II, §§ 203(a)(2), 210]], Dec. 21, 2000, [114 Stat. 2763], 2763A–422, 2763A–436; [Pub. L. 111–203, title VII, § 767], July 21, 2010, [124 Stat. 1799].)