15 U.S. Code § 77d - Exempted transactions

transactions in 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 thesection 77h of this title is in effect as to the security), or such shorter period as the (C)

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 theWith respect to transactions referred to in clause (B), if securities of the registration statement the applicable period, instead of forty days, shall be ninety days, or such shorter period as the (4)

brokers’ transactions executed upon customers’ orders on any exchange or in the over-the-counter market but not the solicitation of such orders.

transactions involving offers or sales by an section 77c(b)(1) of this title, if there is no advertising or public solicitation in connection with the transaction by the issuer’s behalf, and if the (6) transactions involving the offer or sale of securities by an (A)

the aggregate amount sold to all investors by the (B) the aggregate amount sold to any investor by an (i)

the greater of $2,000 or 5 percent of the annual income or net worth of such investor, as applicable, if either the annual income or the net worth of the investor is less than $100,000; and

10 percent of the annual income or net worth of such investor, as applicable, not to exceed a maximum aggregate amount sold of $100,000, if either the annual income or net worth of the investor is equal to or more than $100,000;

the transaction is conducted through a broker or funding portal that complies with the requirements of section 77d–1(a) of this title; and

Offers and sales exempt under section 230.506 of title 17, Code of Federal Regulations (as revised pursuant to section 201 of the Jumpstart Our Business Startups Act) shall not be deemed public offerings under the Federal securities laws as a result of general advertising or general solicitation.

(1) With respect to securities offered and sold in compliance with Rule 506 of Regulation D under this subchapter, no person who meets the conditions set forth in paragraph (2) shall be subject to registration as a broker or dealer pursuant to section 78o(a)(1) of this title,[1] solely because—

that person maintains a platform or mechanism that permits the offer, sale, purchase, or negotiation of or with respect to securities, or permits general solicitations, general advertisements, or similar or related activities by issuers of such securities, whether online, in person, or through any other means;

that person or any person associated with that person provides ancillary services with respect to such securities.

(2) The exemption provided in paragraph (1) shall apply to any person described in such paragraph if—

such person and each person associated with that person receives no compensation in connection with the purchase or sale of such (B)

such person and each person associated with that person does not have possession of customer funds or securities in connection with the purchase or sale of such (C)

such person is not subject to a statutory disqualification as defined in section 78c(a)(39) of this title 1 and does not have any person associated with that person subject to such a statutory disqualification.

the provision of due diligence services, in connection with the offer, sale, purchase, or negotiation of such issuers or investors; and

the provision of standardized documents to the issuers and investors, so long as such person or entity does not negotiate the terms of the issuance for and on behalf of third parties and issuers are not required to use the standardized documents as a condition of using the service.

(d) Certain accredited investor transactions The transactions referred to in subsection (a)(7) are transactions meeting the following requirements:

Each purchaser is an accredited investor, as that term is defined in section 230.501(a) of title 17, Code of Federal Regulations (or any successor regulation).

Neither the seller, nor any person acting on the seller’s behalf, offers or sells securities by any form of general solicitation or general advertising.

(3) Information requirement.— In the case of a transaction involving the securities of an section 78m or 78o(d) of this title, nor exempt from reporting pursuant to section 240.12g3–2(b) of title 17, Code of Federal Regulations, nor a foreign government (as defined in section 230.405 of title 17, Code of Federal Regulations) eligible to register securities under Schedule B, the seller and a prospective purchaser designated by the seller obtain from the issuer, upon request of the seller, and the seller in all cases makes available to a prospective purchaser, the following information (which shall be reasonably current in relation to the date of resale under this section):

The name and address of the transfer agent, corporate secretary, or other person responsible for transferring shares and stock certificates.

The names of any persons registered as a broker, dealer, or agent that shall be paid or given, directly or indirectly, any (J) The (i)

be prepared in accordance with generally accepted accounting principles or, in the case of a foreign private (iii) be presumed reasonably current if—

with respect to the balance sheet, the balance sheet is as of a date less than 16 months before the transaction date; and

with respect to the profit and loss statement, such statement is for the 12 months preceding the date of the (iv)

if the balance sheet is not as of a date less than 6 months before the transaction date, be accompanied by additional statements of profit and loss for the period from the date of such balance sheet to a date less than 6 months before the transaction date.

Neither the seller, nor any person that has been or will be paid (directly or indirectly) remuneration or a 17 CFR 230.506(d)(1)) or is subject to a statutory disqualification described under section 78c(a)(39) of this title.

The transaction is not with respect to a dealer as an underwriter of the (8) Outstanding class requirement.—

Securities acquired in such transaction shall be deemed to have been acquired in a transaction not involving any public offering.

Such transaction shall be deemed not to be a distribution for purposes of section 77b(a)(11) of this title.

Securities involved in such transaction shall be deemed to be restricted securities within the meaning of Rule 144 (17 CFR 230.144).

The exemption provided by subsection (a)(7) shall not be the exclusive means for establishing an exemption from the registration requirements of section 77e of this title.

Section 201 of the Jumpstart Our Business Startups Act, referred to in subsec. (b), is section 201 of Pub. L. 112–106, which amended this section and enacted provisions set out as a note under this section.

Section 78o(a)(1) of this title, referred to in subsec. (c)(1), was in the original “section 15(a)(1) of this title” and was translated as meaning section 15(a)(1) of the Securities Exchange Act of 1934 to reflect the probable intent of Congress .

Section 78c(a)(39) of this title, referrred to in subsec. (c)(2)(C), was in the original “section 3(a)(39) of this title” and was translated as meaning section 3(a)(39) of the Securities Exchange Act of 1934 to reflect the probable intent of Congress .

Subsec. (c). Pub. L. 114–94, § 76001(a)(2), redesignated subsec. (b) relating to securities offered and sold in compliance with Rule 506 of Regulation D as (c).

2012—Pub. L. 112–106, § 201(b)(1), (c)(1), made identical amendments, designating existing provisions as subsec. (a).

Subsec. (a)(5). Pub. L. 112–106, § 401(c), which directed amendment of this section by substituting “section 77c(b)(1)” for “section 77c(b)” in par. (5), was executed by making the substitution in subsec. (a)(5) to reflect the probable intent of Congress and the amendment by Pub. L. 112–106, § 201(b)(1), (c)(1). See above.

Subsec. (a)(6). Pub. L. 112–106, § 302(a), which directed amendment of this section by adding par. (6) at the end, was executed by making the addition at the end of subsec. (a) to reflect the probable intent of Congress and the amendment by Pub. L. 112–106, § 201(b)(1), (c)(1). See above.

Subsec. (b). Pub. L. 112–106, § 201(c)(2), added subsec. (b) relating to securities offered and sold in compliance with Rule 506 of Regulation D under this subchapter.

Pub. L. 112–106, § 201(b)(2), added subsec. (b) relating to offers and sales exempt under section 230.506 of title 17, Code of Federal Regulations.

2010—Pars. (5), (6). Pub. L. 111–203 redesignated par. (6) as (5) and struck out former par. (5) which related to exemption for certain transactions involving offers or sales of one or more promissory notes directly secured by a first lien on a single parcel of real estate upon which is located a dwelling or other residential or commercial structure, and exemption for certain transactions between entities involving non-assignable contracts to buy or sell the foregoing securities which are to be completed within two years.

1975—Par. (5). Pub. L. 94–29 added par. (5).

1964—Pub. L. 88–467 substituted “shall not apply to—” for “shall not apply to any of the following transactions:” in introductory text.

Par. (1). Pub. L. 88–467 reenacted existing first provision of par. (1) and struck out second and third provisions, which are incorporated in pars. (2) and (3)(A) to (C).

Par. (2). Pub. L. 88–467 redesignated existing second provision of par. (1) as (2). Former par. (2) redesignated (4).

Par. (3). Pub. L. 88–467 redesignated existing third provision of par. (1) as (3), designated the excepted transactions as cls. (A) to (C), inserted in cl. (B) “or such shorter period as thePub. L. 88–467 redesignated former par. (2) as (4) and substituted “over-the-counter market” for “open or counter market”.

Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010 , except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.

Amendment by Pub. L. 94–29 effective June 4, 1975 , see section 31(a) of Pub. L. 94–29, set out as a note under section 78b of this title.

Amendment by Pub. L. 88–467 effective Aug. 20, 1964 , see section 13 of Pub. L. 88–467, set out as a note under section 78c of this title.

Amendment by act Aug. 10, 1954 , effective 60 days after Aug. 10, 1954 , see note under section 77b of this title.

Not later than 90 days after the date of the enactment of this Act [ Apr. 5, 2012 ], the Securities and Exchange Commission shall revise its rules issued in section 230.506 of title 17, Code of Federal Regulations, to provide that the prohibition against general solicitation or general advertising contained in section 230.502(c) of such title shall not apply to offers and sales of securities made pursuant to section 230.506, provided that all purchasers of the securities are accredited investors. Such rules shall require theSection 230.506 of title 17, Code of Federal Regulations, as revised pursuant to this section, shall continue to be treated as a regulation issued under section 4(2) of the Securities Act of 1933 ([now] 15 U.S.C. 77d[(a)](2)).

Not later than 90 days after the date of enactment of this Act, the Securities and Exchange Commission shall revise subsection (d)(1) of section 230.144A of title 17, Code of Federal Regulations, to provide that securities sold under such revised exemption may be offered to persons other than qualified institutional buyers, including by means of general solicitation or general advertising, provided that securities are sold only to persons that the seller and any person acting on behalf of the seller reasonably believe is a qualified institutional buyer.”

“Not later than 270 days after the date of enactment of this Act [ Apr. 5, 2012 ], the Securities and Exchange Commission (in this title [enacting section 77d–1 of this title, amending sections 77d, 77r, 78c, 78l, and 78o of this title, and enacting provisions set out as notes under sections 77d, 77r, 78c, and 78l of this title] referred to as the Securities Act of 1933 [15 U.S.C. 77d(a)(6), 77d–1], as added by this title. In carrying out this section, the Disqualification

“(1) In general.— Not later than 270 days after the date of enactment of this Act [ Apr. 5, 2012 ], the [Securities and Exchange] “(A)

a broker or funding portal shall not be eligible to effect or participate in transactions pursuant to that section 4(6).

be substantially similar to the provisions of section 230.262 of title 17, Code of Federal Regulations (or any successor thereto); and

constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct within the 10-year period ending on the date of the filing of the offer or sale; or

has been convicted of any felony or misdemeanor in connection with the purchase or sale of any Disqualifying Felons and Other “Bad Actors” From Regulation D Offerings

“Not later than 1 year after the date of enactment of this Act [ July 21, 2010 ], thesection 230.506 of title 17, Code of Federal Regulations, that—

are substantially similar to the provisions of section 230.262 of title 17, Code of Federal Regulations, or any successor thereto; and

constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct within the 10-year period ending on the date of the filing of the offer or sale; or

has been convicted of any felony or misdemeanor in connection with the purchase or sale of any section 926 of Pub. L. 111–203, set out above, see section 5301 of Title 12, Banks and Banking.]

For transfer of functions of Securities and Exchange Commission , with certain exceptions, to Chairman of suchMay 24, 1950 , 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.