General
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Note:
In §§ 230.100 to 230.174, the numbers to the right of the
decimal point correspond with the respective rule numbers in general rules and
regulations adopted by the Securities and Exchange Commission under the Securities
Act of 1933.
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Cross Reference:
For regulations governing registration, see §§ 230.400-230.494.
230.100 — Definitions of terms used in the rules and regulations.
(a) As used in the rules and regulations prescribed in this part by the
Securities and Exchange Commission pursuant to the Securities Act of 1933, unless the
context otherwise requires:
(1) The term Commission means the Securities and Exchange
Commission.
(2) The term Act means the Securities Act of 1933.
(3) The term rules and regulations refers to all rules and
regulations adopted by the Commission pursuant to the Act, including the forms and
accompanying instructions thereto.
(4) The term registrant means the issuer of securities for which a
registration statement is filed.
(5) The term agent for service means the person authorized in the
registration statement to receive notices and communications from the Commission.
(6) The term electronic filer means a person or an entity that
submits filings electronically pursuant to Rules 101, 901, 902 or 903 of Regulation S-T (§§
232.101, 232.901, 232.902 or 232.903 of this chapter, respectively).
(7) The term electronic filing means a document under the federal
securities laws that is transmitted or delivered to the Commission in electronic format.
(b) Unless otherwise specifically provided, the terms used in this part
shall have the meanings defined in the act.
(c) A rule in the general rules and regulations which defines a term
without express reference to the Act or to the rules and regulations or to a portion thereof
defines such term for all purposes as used both in the Act and in the rules and regulations,
unless the context otherwise requires.
[2 FR 1076, May 26, 1937, as amended at 21 FR
7566, Oct. 3, 1956; 58 FR 14669, Mar. 18, 1993]
230.110 — Business hours of the Commission.
(a) General. The principal office of the Commission, at 100 F
Street, NE., Washington, DC 20549, is open each day, except Saturdays, Sundays, and Federal
holidays, from 9 a.m. to 5:30 p.m., Eastern Standard Time or Eastern Daylight Saving Time,
whichever is currently in effect, provided that hours for the filing of documents
pursuant to the Act or the rules and regulations thereunder are as set forth in paragraphs
(b), (c) and (d) of this section.
(b) Submissions made in paper. Paper documents filed with or
otherwise furnished to the Commission may be submitted each day, except Saturdays, Sundays
and federal holidays, from 8 a.m. to 5:30 p.m., Eastern Standard Time or Eastern Daylight
Saving Time, whichever is currently in effect.
(c) Filings by direct transmission. Filings made by direct
transmission may be submitted to the Commission each day, except Saturdays, Sundays, and
Federal holidays, from 6 a.m. to 10 p.m., Eastern Standard Time or Eastern Daylight Saving
Time, whichever is currently in effect.
(d) Filings by facsimile. Registration statements and
post-effective amendments thereto filed by facsimile transmission pursuant to Rule 462(b) (§
230.462(b)) and Rule 455 (§ 230.455) may be filed with the Commission each day, except
Saturdays, Sundays and federal holidays, from 5:30 p.m. to 10 p.m., Eastern Standard Time or
Eastern Daylight Savings Time, whichever is currently in effect.
[58 FR 14669, Mar. 18, 1993, as amended at 60 FR 26615, May 17, 1995; 65 FR
24799, Apr. 27, 2000; 68 FR 25798, May 13, 2003; 73 FR 967, Jan. 4, 2008; 88 FR 12205,
Feb. 27, 2023]
230.111 — Payment of fees.
As last amended by SEC Rule 33-10997; effective May 31, 2022.
All payments of fees for registration statements under the Act shall be
made by wire transfer, or by certified check, bank cashier's check, United States postal
money order, or bank money order payable to the Securities and Exchange Commission, omitting
the name or title of any official of the Commission. There will be no refunds. Payment of
fees required by this section shall be made in accordance with the directions set forth in §
202.3a of this chapter.
Amendments
230.111 — Payment of fees.
All payments of filing fees for registration statements under the Act shall be made by wire
transfer, debit card, or credit card or via the Automated Clearing House Network. There will
be no refunds. Payment of filing fees required by this section shall be made in accordance
with the directions set forth in § 202.3a of this chapter.
End of Amendments
[73 FR 6014, Feb. 1, 2008; as amended at 86 FR 70166, Dec. 9, 2021]
230.120 — Inspection of registration statements.
Except for material contracts or portions thereof accorded confidential
treatment pursuant to § 230.406, all registration statements are available for public
inspection, during business hours, at the principal office of the Commission in Washington,
D.C. Electronic registration statements made through the Electronic Data Gathering,
Analysis, and Retrieval system are publicly available through the Commission's Web site
(http://www.sec.gov).
[61 FR 24654, May 15, 1996]
230.122 — Non-disclosure of information obtained in the course of examinations and investigations.
Information or documents obtained by officers or employees of the
Commission in the course of any examination or investigation pursuant to section 8(e) or
20(a) (48 Stat. 80, 86; 15 U.S.C. 77h(e), 77t(a)) shall, unless made a matter of public
record, be deemed confidential. Except as provided by 17 CFR 203.2, officers and employees
are hereby prohibited from making such confidential information or documents or any other
non-public records of the Commission available to anyone other than a member, officer or
employee of the Commission, unless the Commission or the General Counsel, pursuant to
delegated authority, authorizes the disclosure of such information or the production of such
documents as not being contrary to the public interest. Any officer or employee who is
served with a subpoena requiring the disclosure of such information or the production of
such documents shall appear in court and, unless the authorization described in the
preceding sentence shall have been given, shall respectfully decline to disclose the
information or produce the documents called for, basing his or her refusal upon this
section. Any officer or employee who is served with such a subpoena shall promptly advise
the General Counsel of the service of such subpoena, the nature of the information or
documents sought, and any circumstances which may bear on the desirability of making
available such information or documents.
[44 FR 50836, Aug. 30, 1979, as amended at 53 FR
17459, May 17, 1988; 54 FR 33501, Aug. 15, 1989; 76 FR 71876, Nov. 21, 2011]
230.130 — Definition of “rules and regulations” as used in certain sections of the Act.
The term rules and regulations as used in sections 7, 10 (a), (c)
and (d) and 19(a) of the Act, shall include the forms for registration of securities under
the Act and the related instructions thereto.
[21 FR 1046, Feb. 15, 1956]
230.131 — Definition of security issued under governmental obligations.
(a) Any part of an obligation evidenced by any bond, note, debenture, or
other evidence of indebtedness issued by any governmental unit specified in section 3(a)(2)
of the Act which is payable from payments to be made in respect of property or money which
is or will be used, under a lease, sale, or loan arrangement, by or for industrial or
commercial enterprise, shall be deemed to be a separate security within the meaning
of section 2(l) of the Act, issued by the lessee or obligor under the lease, sale or loan
arrangement.
(b) An obligation shall not be deemed a separate security as
defined in paragraph (a) of this section if, (1) the obligation is payable from the general
revenues of a governmental unit, specified in section 3(a)(2) of the Act, having other
resources which may be used for payment of the obligation, or (2) the obligation relates to
a public project or facility owned and operated by or on behalf of and under the control of
a governmental unit specified in such section, or (3) the obligation relates to a facility
which is leased to and under the control of an industrial or commercial enterprise but is a
part of a public project which, as a whole, is owned by and under the general control of a
governmental unit specified in such section, or an instrumentality thereof.
(c) This rule shall apply to transactions of the character described in
paragraph (a) of this section only with respect to bonds, notes, debentures or other
evidences of indebtedness sold after December 31, 1968.
(15 U.S.C. 77w)
[33 FR 12648, Sept. 6, 1968, as amended at 35 FR
6000, Apr. 11, 1970]
230.132 — Definition of “common trust fund” as used in section 3(a)(2) of the Act.
The term common trust fund as used in section 3(a)(2) of the Act
(15 U.S.C. 77c(a)(2)) shall include a common trust fund which is maintained by a bank which
is a member of an affiliated group, as defined in section 1504(a) of the Internal Revenue
Code of 1954 (26 U.S.C. 1504(a)), and which is maintained exclusively for the collective
investment and reinvestment of monies contributed thereto by one or more bank members of
such affiliated group in the capacity of trustee, executor, administrator, or guardian,
Provided That:
(a) The common trust fund is operated in compliance with the same state
and federal regulatory requirements as would apply if the bank maintaining such fund and any
other contributing banks were the same entry; and
(b) The rights of persons for whose benefit a contributing bank acts as
trustee, executor, administrator, or guardian would not be diminished by reason of the
maintenance of such common trust fund by another bank member of the affiliated group.
(15 U.S.C. 77s(a))
[43 FR 2392, Jan. 17, 1978]
230.133 — Definition for purposes of section 5 of the Act, of “sale”, “offer”, “offer to sell”, and “offer for sale”.
(a) For purposes only of section 5 of the Act, no sale, offer to
sell, or offer for sale shall be deemed to be involved so far as the
stockholders of a corporation are concerned where, pursuant to statutory provisions in the
state of incorporation or provisions contained in the certificate of incorporation, there is
submitted to the vote of such stockholders a plan or agreement for a statutory merger or
consolidation or reclassification of securities, or a proposal for the transfer of assets of
such corporation to another person in consideration of the issuance of securities of such
other person or securities of a corporation which owns stock possessing at least 80 percent
of the total combined voting power of all classes of stock entitled to vote and at least 80
percent of the total number of shares of all other classes of stock of such person, under
such circumstances that the vote of a required favorable majority (1) will operate to
authorize the proposed transaction as far as concerns the corporation whose stockholders are
voting (except for the taking of action by the directors of the corporation involved and for
compliance with such statutory provisions as the filing of the plan or agreement with the
appropriate State authority), and (2) will bind all stockholders of such corporation except
to the extent that dissenting shareholders may be entitled, under statutory provisions or
provisions contained in the certificate of incorporation, to receive the appraised or fair
value of their holdings.
(b) Any person who purchases securities of the issuer from security
holders of a constituent corporation with a view to, or offers or sells such securities for
such security holders in connection with, a distribution thereof pursuant to any contract or
arrangement, made in connection with any transaction specified in paragraph (a) of this
section, with the issuer or with any affiliate of the issuer, or with any person who in
connection with such transaction is acting as an underwriter of such securities, shall be
deemed to an underwriter of such securities within the meaning of section 2(11) of the Act.
This paragraph does not refer to arrangements limited to provision for the matching and
combination of fractional interests in securities into whole interests, or the purchase and
sale of such fractional interests, among security holders of the constituent corporation and
to the sale on behalf of, and as agent for, such security holders of such number of
fractional or whole interests as may be necessary to adjust for any remaining fractional
interests after such matching.
(c) Any constituent corporation, or any person who is an affiliate of a
constituent corporation at the time any transaction specified in paragraph (a) of this
section, is submitted to a vote of the stockholders of such corporation, who acquires
securities of the issuer in connection with such transaction with a view to the distribution
thereof shall be deemed to be an underwriter of such securities within the meaning of
section 2(11) of the Act. A transfer by a constituent corporation to its security holders of
securities of the issuer upon a complete or partial liquidation shall not be deemed a
distribution for the purpose of this paragraph.
(d) Notwithstanding the provisions of paragraph (c) of this section, a
person specified therein shall not be deemed to be an underwriter nor to be engaged in a
distribution with respect to securities acquired in any transaction specified in paragraph
(a) of this section, which are sold by him in brokers' transactions within the meaning of
section 4(4) of the Act, in accordance with the conditions and subject to the limitations
specified in paragraph (e) of this section, if such person:
(1) Does not directly or indirectly solicit or arrange for the
solicitation of orders to buy in anticipation of or in connection with such brokers'
transactions;
(2) Makes no payment in connection with the execution of such brokers'
transactions to any person other than the broker; and
(3) Limits such brokers' transactions to a sale or series of sales which,
together with all other sales of securities of the same class by such person or on his
behalf within the preceding six months, will not exceed the following:
(i) If the security is traded only otherwise than on a securities
exchange, approximately one percent of the shares or units of such security outstanding at
the time of receipt by the broker of the order to execute such transactions, or
(ii) If the security is admitted to trading on a securities exchange, the
lesser of approximately (a) one percent of the shares or units of such security
outstanding at the time of receipt by the broker of the order to execute such transactions
or (b) the largest aggregate reported volume of trading on securities exchanges
during any one week within the four calendar weeks preceding the receipt of such order.
(e) For the purposes of paragraph (d) of this section:
(1) The term brokers' transactions in section 4(4) of the Act shall
be deemed to include transactions by a broker acting as agent for the account of the seller
where:
(i) The broker performs no more than the usual and customary broker's
functions,
(ii) The broker does no more than execute an order or orders to sell as a
broker and receives no more than the usual or customary broker's commissions,
(iii) The broker does not solicit or arrange for the solicitation of
orders to buy in anticipation of or in connection with such transactions and
(iv) The broker is not aware of any circumstances indicating that his
principal is failing to comply with the provisions of paragraph (d) of this section;
(2) The term solicitation of such orders in section 4(4) of the Act
shall be deemed to include the solicitation of an order to buy a security, but shall not be
deemed to include the solicitation of an order to sell a security;
(3) Where within the previous 60 days a dealer has made a written bid for
a security or a written solicitation of an offer to sell such security, the term
solicitation in section 4(4) shall not be deemed to include an inquiry regarding
the dealer's bid or solicitation.
(f) For the purposes of this rule, the term constituent corporation
means any corporation, other than the issuer, which is a party to any transaction specified
in paragraph (a) of this section. The term affiliate means a person controlling,
controlled by or under common control with a specified person.
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Note:
This section is rescinded effective on and after January 1,
1973, except that it shall remain in effect: (1) For transactions submitted
before that date for vote or consent of security holders; (2) for transactions
formally submitted before such date for approval to any governmental regulatory
agency, if such approval is required by law; and (3) for resales of securities
received by persons in such transactions.
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(Sec. 5, 48 Stat. 77; 15 U.S.C. 77e)
[19 FR 7129, Nov. 3, 1954, as amended at 24 FR
5900, July 23, 1959; 30 FR 2022, Feb. 13, 1965; 33 FR 566, Jan. 17, 1968. Rescinded at 37
FR 23636, Nov. 7, 1972]
230.134 — Communications not deemed a prospectus.
Except as provided in paragraphs (e) and (g) of this section, the terms
“prospectus” as defined in section 2(a)(10) of the Act or “free writing prospectus” as
defined in Rule 405 (§ 230.405) shall not include a communication limited to the statements
required or permitted by this section, provided that the communication is published or
transmitted to any person only after a registration statement relating to the offering that
includes a prospectus satisfying the requirements of section 10 of the Act (except as
otherwise permitted in paragraph (a) of this section) has been filed.
(a) Such communication may include any one or more of the following items
of information, which need not follow the numerical sequence of this paragraph, provided
that, except as to paragraphs (a)(4) through (6) of this section, the prospectus included in
the filed registration statement does not have to include a price range otherwise required
by rule:
(1) Factual information about the legal identity and business location of
the issuer limited to the following: the name of the issuer of the security, the address,
phone number, and e-mail address of the issuer's principal offices and contact for
investors, the issuer's country of organization, and the geographic areas in which it
conducts business;
(2) The title of the security or securities and the amount or amounts
being offered, which title may include a designation as to whether the securities are
convertible, exercisable, or exchangeable, and as to the ranking of the securities;
(3) A brief indication of the general type of business of the issuer,
limited to the following:
(i) In the case of a manufacturing company, the general type of
manufacturing, the principal products or classes of products manufactured, and the segments
in which the company conducts business;
(ii) In the case of a public utility company, the general type of services
rendered, a brief indication of the area served, and the segments in which the company
conducts business;
(iii) In the case of an asset-backed issuer, the identity of key parties,
such as sponsor, depositor, issuing entity, servicer or servicers, and trustee, the asset
class of the transaction, and the identity of any credit enhancement or other support;
and
(iv) In the case of any other type of company, a corresponding
statement;
(4) The price of the security, or if the price is not known, the method of
its determination or the bona fide estimate of the price range as specified by the
issuer or the managing underwriter or underwriters;
(5) In the case of a fixed income security, the final maturity and
interest rate provisions or, if the final maturity or interest rate provisions are not
known, the probable final maturity or interest rate provisions, as specified by the issuer
or the managing underwriter or underwriters;
(6) In the case of a fixed income security with a fixed (non-contingent)
interest rate provision, the yield or, if the yield is not known, the probable yield range,
as specified by the issuer or the managing underwriter or underwriters and the yield of
fixed income securities with comparable maturity and security rating;
(7) A brief description of the intended use of proceeds of the offering,
if then disclosed in the prospectus that is part of the filed registration statement;
(8) The name, address, phone number, and e-mail address of the sender of
the communication and the fact that it is participating, or expects to participate, in the
distribution of the security;
(9) The type of underwriting, if then included in the disclosure in the
prospectus that is part of the filed registration statement;
(10) The names of underwriters participating in the offering of the
securities, and their additional roles, if any, within the underwriting syndicate;
(11) The anticipated schedule for the offering (including the approximate
date upon which the proposed sale to the public will begin) and a description of marketing
events (including the dates, times, locations, and procedures for attending or otherwise
accessing them);
(12) A description of the procedures by which the underwriters will
conduct the offering and the procedures for transactions in connection with the offering
with the issuer or an underwriter or participating dealer (including procedures regarding
account-opening and submitting indications of interest and conditional offers to buy), and
procedures regarding directed share plans and other participation in offerings by officers,
directors, and employees of the issuer;
(13) Whether, in the opinion of counsel, the security is a legal
investment for savings banks, fiduciaries, insurance companies, or similar investors under
the laws of any State or Territory or the District of Columbia, and the permissibility or
status of the investment under the Employee Retirement Income Security Act of 1974 [29
U.S.C. 1001 et seq.];
(14) Whether, in the opinion of counsel, the security is exempt from
specified taxes, or the extent to which the issuer has agreed to pay any tax with respect to
the security or measured by the income therefrom;
(15) Whether the security is being offered through rights issued to
security holders, and, if so, the class of securities the holders of which will be entitled
to subscribe, the subscription ratio, the actual or proposed record date, the date upon
which the rights were issued or are expected to be issued, the actual or anticipated date
upon which they will expire, and the approximate subscription price, or any of the
foregoing;
(16) Any statement or legend required by any state law or administrative
authority;
(17) [Reserved]
(18) The names of selling security holders, if then disclosed in the
prospectus that is part of the filed registration statement;
(19) The names of securities exchanges or other securities markets where
any class of the issuer's securities are, or will be, listed;
(20) The ticker symbols, or proposed ticker symbols, of the issuer's
securities;
(21) The CUSIP number as defined in Rule 17Ad-19(a)(5) of the Securities
Exchange Act of 1934 (§ 240.17Ad-19(a)(5) of this chapter) assigned to the securities being
offered; and
(22) Information disclosed in order to correct inaccuracies previously
contained in a communication permissibly made pursuant to this section.
(b) Except as provided in paragraph (c) of this section, every
communication used pursuant to this section shall contain the following:
(1) If the registration statement has not yet become effective, the
following statement:
A registration statement relating to these securities
has been filed with the Securities and Exchange Commission but has not yet become effective.
These securities may not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective; and
(2) The name and address of a person or persons from whom a written
prospectus for the offering meeting the requirements of section 10 of the Act (other than a
free writing prospectus as defined in Rule 405) including as to the identified paragraphs
above a price range where required by rule, may be obtained.
(c) Any of the statements or information specified in paragraph (b) of
this section may, but need not, be contained in a communication which:
(1) Does no more than state from whom and include the uniform resource
locator (URL) where a written prospectus meeting the requirements of section 10 of the Act
(other than a free writing prospectus as defined in Rule 405) may be obtained, identify the
security, state the price thereof and state by whom orders will be executed; or
(2) Is accompanied or preceded by a prospectus or a summary prospectus,
other than a free writing prospectus as defined in Rule 405, which meets the requirements of
section 10 of the Act, including a price range where required by rule, at the date of such
preliminary communication.
(d) A communication sent or delivered to any person pursuant to this
section which is accompanied or preceded by a prospectus which meets the requirements of
section 10 of the Act (other than a free writing prospectus as defined in Rule 405),
including a price range where required by rule, at the date of such communication, may
solicit from the recipient of the communication an offer to buy the security or request the
recipient to indicate whether he or she might be interested in the security, if the
communication contains substantially the following statement:
No offer to buy the securities can be accepted and no
part of the purchase price can be received until the registration statement has become
effective, and any such offer may be withdrawn or revoked, without obligation or commitment
of any kind, at any time prior to notice of its acceptance given after the effective
date.
Provided, that such statement need not be included in such a communication to a
dealer.
(e) A section 10 prospectus included in any communication pursuant to this
section shall remain a prospectus for all purposes under the Act.
(f) The provision in paragraphs (c)(2) and (d) of this section that a
prospectus that meets the requirements of section 10 of the Act precede or accompany a
communication will be satisfied if such communication is an electronic communication
containing an active hyperlink to such prospectus.
(g) This section does not apply to a communication relating to an
investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1
et seq.), other than a registered closed-end investment company.
[70 FR 44800, Aug. 3, 2005, as amended at 76 FR 46617, Aug. 3, 2011; 85 FR
33290, June 1, 2020]
230.134a — Options material not deemed a prospectus.
Written materials, including advertisements, relating to standardized
options, as that term is defined in Rule 9b-1 under the Securities Exchange Act of 1934,
shall not be deemed to be a prospectus for the purposes of section 2(10) of the Securities
Act of 1933; Provided, That such materials are limited to explanatory information
describing the general nature of the standardized options markets or one or more strategies;
And, Provided further, That:
(a) The potential risks related to options trading generally and to each
strategy addressed are explained;
(b) No past or projected performance figures, including annualized rates
of return are used;
(c) No recommendation to purchase or sell any option contract is made;
(d) No specific security is identified, other than
(1) An option or other security exempt from registration under the Act,
or
(2) An index option, including the component securities of the index;
and
(e) If there is a definitive options disclosure document, as defined in
Rule 9b-1 under the Securities Exchange Act of 1934, the materials shall contain the name
and address of a person or persons from whom a copy of such document may be obtained.
(15 U.S.C. 77a et seq.; secs. 2, 7, 10, 19(a), 48 Stat. 74, 78, 81,
85; secs. 201, 205, 209, 210, 48 Stat. 905, 906, 908; secs. 1-4. 8, 68 Stat. 683, 685; sec.
12(a), 73 Stat. 143; sec. 7(a), 74 Stat. 412; sec. 27(a), 84 Stat. 1433; sec. 308(a)(2), 90
Stat. 57)
[47 FR 41955, Sept. 23, 1982, as amended at 49 FR
12688, Mar. 30, 1984]
230.134b — Statements of additional information.
For the purpose only of Section 5(b) of the Act (15 U.S.C. 77e(b)), the
term “prospectus” as defined in Section 2(a)(10) of the Act (15 U.S.C. 77b(a)(10)) does not
include a Statement of Additional Information filed as part of a registration statement on
Form N-1A (§ 239.15A and § 274.11A of this chapter), Form N-2 (§ 239.14 and § 274.11a-1 of
this chapter), Form N-3 (§§ 239.17a and 274.11b of this chapter), Form N-4 (§§ 239.17b and
274.11c of this chapter), or Form N-6 (§§ 239.17c and 274.11d of this chapter) transmitted
prior to the effective date of the registration statement if it is accompanied or preceded
by a preliminary prospectus meeting the requirements of § 230.430.
[67 FR 19868, Apr. 23, 2002]
230.135 — Notice of proposed registered offerings.
(a) When notice is not an offer. For purposes of section 5 of the
Act (15 U.S.C. 77e) only, an issuer or a selling security holder (and any person acting on
behalf of either of them) that publishes through any medium a notice of a proposed offering
to be registered under the Act will not be deemed to offer its securities for sale through
that notice if:
(1) Legend. The notice includes a statement to the effect that it
does not constitute an offer of any securities for sale; and
(2) Limited notice content. The notice otherwise includes no more
than the following information:
(i) The name of the issuer;
(ii) The title, amount and basic terms of the securities offered;
(iii) The amount of the offering, if any, to be made by selling security
holders;
(iv) The anticipated timing of the offering;
(v) A brief statement of the manner and the purpose of the offering,
without naming the underwriters;
(vi) Whether the issuer is directing its offering to only a particular
class of purchasers;
(vii) Any statements or legends required by the laws of any state or
foreign country or administrative authority; and
(viii) In the following offerings, the notice may contain additional
information, as follows:
(A) Rights offering. In a rights offering to existing security
holders:
(1) The class of security holders eligible to subscribe;
(2) The subscription ratio and expected subscription price;
(3) The proposed record date;
(4) The anticipated issuance date of the rights; and
(5) The subscription period or expiration date of the rights
offering.
(B) Offering to employees. In an offering to employees of the
issuer or an affiliated company:
(1) The name of the employer;
(2) The class of employees being offered the securities;
(3) The offering price; and
(4) The duration of the offering period.
(C) Exchange offer. In an exchange offer:
(1) The basic terms of the exchange offer;
(2) The name of the subject company;
(3) The subject class of securities sought in the exchange
offer.
(D) Rule 145(a) offering. In a § 230.145(a) offering:
(1) The name of the person whose assets are to be sold in exchange
for the securities to be offered;
(2) The names of any other parties to the transaction;
(3) A brief description of the business of the parties to the
transaction;
(4) The date, time and place of the meeting of security holders to
vote on or consent to the transaction; and
(5) A brief description of the transaction and the basic terms of
the transaction.
(b) Corrections of misstatements about the offering. A person that
publishes a notice in reliance on this section may issue a notice that contains no more
information than is necessary to correct inaccuracies published about the proposed offering.
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Note to § 230.135:
Communications under this section relating to business
combination transactions must be filed as required by § 230.425(b).
|
[64 FR 61449, Nov. 10, 1999]
230.135a — Generic advertising.
(a) For the purposes only of section 5 of the Act, a notice, circular,
advertisement, letter, sign, or other communication, published or transmitted to any person
which does not specifically refer by name to the securities of a particular investment
company, to the investment company itself, or to any other securities not exempt under
section 3(a) of the Act, will not be deemed to offer any security for sale, provided:
(1) Such communication is limited to any one or more of the following:
(i) Explanatory information relating to securities of investment companies
generally or to the nature of investment companies, or to services offered in connection
with the ownership of such securities,
(ii) The mention or explanation of investment companies of different
generic types or having various investment objectives, such as balanced funds, growth
funds, income funds, leveraged funds, specialty funds, variable annuities, bond funds,
and no-load funds,
(iii) Offers, descriptions, and explanation of various products and
services not constituting a security subject to registration under the Act: Provided,
That such offers, descriptions, and explanations do not relate directly to the desirability
of owning or purchasing a security issued by a registered investment company,
(iv) Invitation to inquire for further information, and
(2) Such communication contains the name and address of a registered
broker or dealer or other person sponsoring the communication.
(b) If such communication contains a solicitation of inquiries and
prospectuses for investment company securities are to be sent or delivered in response to
such inquiries, the number of such investment companies and, if applicable, the fact that
the sponsor of the communication is the principal underwriter or investment adviser in
respect to such investment companies shall be stated.
(c) With respect to any communication describing any type of security,
service, or product, the broker, dealer, or other person sponsoring such communication must
offer for sale a security, service, or product of the type described in such
communication.
[37 FR 10073, May 19, 1972, as amended at 37 FR
10931, June 1, 1972]
230.135b — Materials not deemed an offer to sell or offer to buy nor a prospectus.
Materials meeting the requirements of § 240.9b-1 of this chapter shall not
be deemed an offer to sell or offer to buy a security for purposes solely of Section 5 (15
U.S.C. 77e) of the Act, nor shall such materials be deemed a prospectus for purposes of
Sections 2(a)(10) and 12(a)(2) (15 U.S.C. 77b(a)(10) and 77l(a)(2)) of the Act, even
if such materials are referred to in, deemed to be incorporated by reference into, or
otherwise in any manner deemed to be a part of a Form S-20 prospectus.
[67 FR 228, Jan. 2, 2002]
230.135c — Notice of certain proposed unregistered offerings.
(a) For the purposes only of section 5 of the Act, a notice given by an
issuer required to file reports pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 or a foreign issuer that is exempt from registration under the Securities
Exchange Act of 1934 pursuant to § 240.12g3-2(b) of this chapter that it proposes to make,
is making or has made an offering of securities not registered or required to be registered
under the Act shall not be deemed to offer any securities for sale if:
(1) Such notice is not used for the purpose of conditioning the market in
the United States for any of the securities offered;
(2) Such notice states that the securities offered will not be or have not
been registered under the Act and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements; and
(3) Such notice contains no more than the following additional
information:
(i) The name of the issuer;
(ii) The title, amount and basic terms of the securities offered, the
amount of the offering, if any, made by selling security holders, the time of the offering
and a brief statement of the manner and purpose of the offering without naming the
underwriters;
(iii) In the case of a rights offering to security holders of the issuer,
the class of securities the holders of which will be or were entitled to subscribe to the
securities offered, the subscription ratio, the record date, the date upon which the rights
are proposed to be or were issued, the term or expiration date of the rights and the
subscription price, or any of the foregoing;
(iv) In the case of an offering of securities in exchange for other
securities of the issuer or of another issuer, the name of the issuer and the title of the
securities to be surrendered in exchange for the securities offered, the basis upon which
the exchange may be made, or any of the foregoing;
(v) In the case of an offering to employees of the issuer or to employees
of any affiliate of the issuer, the name of the employer and class or classes of employees
to whom the securities are offered, the offering price or basis of the offering and the
period during which the offering is to be or was made or any of the foregoing; and
(vi) Any statement or legend required by State or foreign law or
administrative authority.
(b) Any notice contemplated by this section may take the form of a news
release or a written communication directed to security holders or employees, as the case
may be, or other published statements.
(c) Notwithstanding the provisions of paragraphs (a) and (b) of this
section, in the case of a rights offering of a security listed or subject to unlisted
trading privileges on a national securities exchange or quoted on the NASDAQ inter-dealer
quotation system information with respect to the interest rate, conversion ratio and
subscription price may be disseminated through the facilities of the exchange, the
consolidated transaction reporting system, the NASDAQ system or the Dow Jones broad tape,
provided such information is already disclosed in a Form 8-K (§ 249.308 of this chapter) on
file with the Commission, in a Form 6-K (§ 249.306 of this chapter) furnished to the
Commission or, in the case of an issuer relying on § 240.12g3-2(b) of this chapter, in a
submission made pursuant to that Section to the Commission.
(d) The issuer shall file any notice contemplated by this section with the
Commission under cover of Form 8-K (§ 249.308 of this chapter) or furnish such notice under
Form 6-K (§ 249.306 of this chapter), as applicable, and, if relying on § 240.12g3-2(b) of
this chapter, shall furnish such notice to the Commission in accordance with the provisions
of that exemptive Section.
[59 FR 21649, Apr. 26, 1994]
230.135d — Communications involving security-based swaps.
(a) For the purposes only of Section 5 of the Act (15 U.S.C. 77e), the
publication or distribution of quotes relating to security-based swaps that may be
purchased only by persons who are eligible contract participants (as defined in Section
1a(18) of the Commodity Exchange Act (7 U.S.C. 1a(18))) and are traded or processed on or
through a trading system or platform that either is registered as a national securities
exchange under Section 6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(a)) or
as a security-based swap execution facility under Section 3D(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c-4(a)), or is exempt from registration as a security-based swap
execution facility under Section 3D(a) of the Securities Exchange Act of 1934 pursuant to
a rule, regulation, or order of the Commission shall not be deemed to constitute an offer,
an offer to sell, or a solicitation of an offer to buy or purchase any security-based swap
or any guarantee of such security-based swap that is a security; and
(b) For the purposes only of Section 5 of the Act (15 U.S.C. 77e), a
broker, dealer, or security-based swap dealer's publication or distribution of a research
report (as defined in § 230.139(d)) that discusses security-based swaps that may be
purchased only by persons who are eligible contract participants (as defined in Section
1a(18) of the Commodity Exchange Act (7 U.S.C. 1a(18))) shall not be deemed to constitute
an offer, an offer to sell, or a solicitation of an offer to buy or purchase any
security-based swap or any guarantee of such security-based swap that is a security,
provided that the broker, dealer, or security-based swap dealer publishes or distributes
research reports on the issuer underlying the security-based swap or its securities in the
regular course of its business and the publication or distribution of the research report
does not represent the initiation of publication of research reports about such issuer or
its securities or the reinitiation of such publication following discontinuation of
publication of such research reports. For purposes of this section, the term issuer
as used in the definition of “research report” means the issuer of any security or
loan referenced in the security-based swap, each issuer of a security in a narrow-based
security index referenced in the security-based swap, or each issuer referenced in the
security-based swap.
[83 FR 2046, Jan. 16, 2018]
230.135e — Offshore press conferences, meetings with issuer representatives conducted offshore, and press-related materials released offshore.
(a) For the purposes only of Section 5 of the Act (15 U.S.C. 77e), an
issuer that is a foreign private issuer (as defined in § 230.405) or a foreign government
issuer, a selling security holder of the securities of such issuers, or their
representatives will not be deemed to offer any security for sale by virtue of providing any
journalist with access to its press conferences held outside of the United States, to
meetings with issuer or selling security holder representatives conducted outside of the
United States, or to written press-related materials released outside the United States, at
or in which a present or proposed offering of securities is discussed, if:
(1) The present or proposed offering is not being, or to be, conducted
solely in the United States;
|
Note to paragraph (a)(1):
An offering will be considered not to be made solely in the
United States under this paragraph (a)(1) only if there is an intent to make a
bona fide offering offshore.
|
(2) Access is provided to both U.S. and foreign journalists; and
(3) Any written press-related materials pertaining to transactions in
which any of the securities will be or are being offered in the United States satisfy the
requirements of paragraph (b) of this section.
(b) Any written press-related materials specified in paragraph (a)(3) of
this section must:
(1) State that the written press-related materials are not an offer of
securities for sale in the United States, that securities may not be offered or sold in the
United States absent registration or an exemption from registration, that any public
offering of securities to be made in the United States will be made by means of a prospectus
that may be obtained from the issuer or the selling security holder and that will contain
detailed information about the company and management, as well as financial statements;
(2) If the issuer or selling security holder intends to register any part
of the present or proposed offering in the United States, include a statement regarding this
intention; and
(3) Not include any purchase order, or coupon that could be returned
indicating interest in the offering, as part of, or attached to, the written press-related
materials.
(c) For the purposes of this section, United States means the
United States of America, its territories and possessions, any State of the United States,
and the District of Columbia.
[62 FR 53954, Oct. 17, 1997]
230.136 — Definition of certain terms in relation to assessable stock.
(a) An offer, offer to sell, or offer for sale of securities
shall be deemed to be made to the holders of assessable stock of a corporation when such
corporation shall give notice of an assessment to the holders of such assessable stock. A
sale shall be deemed to occur when a stockholder shall pay or agree to pay all or
any part of such an assessment.
(b) The term transactions by any person other than an issuer,
underwriter or dealer in section 4(1) of the Act shall not be deemed to include the
offering or sale of assessable stock, at public auction or otherwise, upon the failure of
the holder of such stock to pay an assessment levied thereon by the issuer, where the offer
or sale is made for the purpose of realizing the amount of the assessment and any of the
proceeds of such sale are to be received by the issuer. However, any person whose functions
are limited to acting as auctioneer at such an auction sale shall not be deemed to be an
underwriter of the securities offered or sold at the auction sale. Any person who acquires
assessable stock at any such public auction or other sale with a view to the distribution
thereof shall be deemed to be an underwriter of such assessable stock.
(c) The term assessable stock means stock which is subject to
resale by the issuer pursuant to statute or otherwise in the event of a failure of the
holder of such stock to pay any assessment levied thereon.
[24 FR 6386, Aug. 8, 1959]
230.137 — Publications or distributions of research reports by brokers or dealers that are not participating in an issuer's registered distribution of securities.
Under the following conditions, the terms “offers,” “participates,” or
“participation” in section 2(a)(11) of the Act shall not be deemed to apply to the
publication or distribution of research reports with respect to the securities of an issuer
which is the subject of an offering pursuant to a registration statement that the issuer
proposes to file, or has filed, or that is effective:
(a) The broker or dealer (and any affiliate) that has distributed the
report and, if different, the person (and any affiliate) that has published the report have
not participated, are not participating, and do not propose to participate in the
distribution of the securities that are or will be the subject of the registered
offering.
(b) In connection with the publication or distribution of the research
report, the broker or dealer (and any affiliate) that has distributed the report and, if
different, the person (and any affiliate) that has published the report are not receiving
and have not received consideration directly or indirectly from, and are not acting under
any direct or indirect arrangement or understanding with:
(1) The issuer of the securities;
(2) A selling security holder;
(3) Any participant in the distribution of the securities that are or will
be the subject of the registration statement; or
(4) Any other person interested in the securities that are or will be the
subject of the registration statement.
Instruction to § 230.137(b). This paragraph (b) does not preclude payment of:
1. The regular price being paid by the broker or
dealer for independent research, so long as the conditions of this paragraph (b) are
satisfied; or
2. The regular subscription or purchase price for the
research report.
(c) The broker or dealer publishes or distributes the research report in
the regular course of its business.
(d) The issuer is not and during the past three years neither the issuer
nor any of its predecessors was:
(1) A blank check company as defined in Rule 419(a)(2) (§
230.419(a)(2));
(2) A shell company, other than a business combination related shell
company, each as defined in Rule 405 (§ 230.405); or
(3) An issuer for an offering of penny stock as defined in Rule 3a51-1 of
the Securities Exchange Act of 1934 (§ 240.3a51-1 of this chapter).
(e) Definition of research report. For purposes of this section,
research report means a written communication, as defined in Rule 405, that
includes information, opinions, or recommendations with respect to securities of an issuer
or an analysis of a security or an issuer, whether or not it provides information reasonably
sufficient upon which to base an investment decision.
[70 FR 44802, Aug. 3, 2005]
230.138 — Publications or distributions of research reports by brokers or dealers about securities other than those they are distributing.
(a) Registered offerings. Under the following conditions, a
broker's or dealer's publication or distribution of research reports about securities of an
issuer shall be deemed for purposes of sections 2(a)(10) and 5(c) of the Act not to
constitute an offer for sale or offer to sell a security which is the subject of an offering
pursuant to a registration statement that the issuer proposes to file, or has filed, or that
is effective, even if the broker or dealer is participating or will participate in the
registered offering of the issuer's securities:
(1)(i) The research report relates solely to the issuer's common stock, or
debt securities or preferred stock convertible into its common stock, and the offering
involves solely the issuer's non-convertible debt securities or non-convertible,
non-participating preferred stock; or
(ii) The research report relates solely to the issuer's non-convertible
debt securities or non-convertible, non-participating preferred stock, and the offering
involves solely the issuer's common stock, or debt securities or preferred stock convertible
into its common stock.
(iii) Note: If the issuer has filed a shelf registration statement under § 230.415(a)(1)(x)
(Rule 415(a)(1)(x)) or pursuant to General Instruction I.D. of Form S-3, General Instruction
I.C. of Form F-3 (§ 239.13 or § 239.33 of this chapter), or pursuant to General Instructions
A.2 and B of Form N-2 (§§ 239.14 and 274.11a-1 of this chapter) with respect to multiple
classes of securities, the conditions of paragraph (a)(1) of this section must be satisfied
for the offering in which the broker or dealer is participating or will participate.
(2) The issuer as of the date of reliance on this section:
(i)(A) Is required to file reports, and has filed all periodic reports
required during the preceding 12 months (or such shorter time that the issuer was required
to file such reports) on Forms 10-K (§ 249.310 of this chapter), 10-Q (§ 249.308a of this
chapter), and 20-F (§ 249.220f of this chapter) pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); or
(B)(1) Is a registered closed-end investment company; and
(2) Is required to file reports, and has filed all periodic reports required during
the preceding 12 months (or such shorter time that the issuer was required to file such
reports) on Forms N-CSR (§§ 249.331 and 274.128 of this chapter), N-PORT (§ 274.150 of this
chapter), and N-CEN (§§ 249.330 and 274.101 of this chapter) pursuant to Section 30 of the
Investment Company Act; or
(ii) Is a foreign private issuer that:
(A) Meets all of the registrant requirements of Form F-3 other than the
reporting history provisions of General Instructions I.A.1. and I.A.2(a) of Form F-3;
(B) Either:
(1) Satisfies the public float threshold in General Instruction
I.B.1. of Form F-3; or
(2) Is issuing non-convertible securities, other than common
equity, and the issuer meets the provisions of General Instruction I.B.2. of Form F-3
(referenced in 17 CFR 239.33 of this chapter); and
(C) Either:
(1) Has its equity securities trading on a designated offshore
securities market as defined in Rule 902(b) (§ 230.902(b)) and has had them so traded for at
least 12 months; or
(2) Has a worldwide market value of its outstanding common equity
held by non-affiliates of $700 million or more.
(3) The broker or dealer publishes or distributes research reports on the
types of securities in question in the regular course of its business; and
(4) The issuer is not, and during the past three years neither the issuer
nor any of its predecessors was:
(i) A blank check company as defined in Rule 419(a)(2) (§
230.419(a)(2));
(ii) A shell company, other than a business combination related shell
company, each as defined in Rule 405 (§ 230.405); or
(iii) An issuer for an offering of penny stock as defined in Rule 3a51-1
of the Securities Exchange Act of 1934 (§ 240.3a51-1 of this chapter).
(b) Rule 144A offerings. If the conditions in paragraph (a) of this
section are satisfied, a broker's or dealer's publication or distribution of a research
report shall not be considered an offer for sale or an offer to sell a security or general
solicitation or general advertising, in connection with an offering relying on Rule 144A (§
230.144A).
(c) Regulation S offerings. If the conditions in paragraph (a) of
this section are satisfied, a broker's or dealer's publication or distribution of a research
report shall not:
(1) Constitute directed selling efforts as defined in Rule 902(c) (§
230.902(c)) for offerings under Regulation S (§ 230.901 through § 230.905); or
(2) Be inconsistent with the offshore transaction requirement in Rule
902(h) (§ 230.902(h)) for offerings under Regulation S.
(d) Definition of research report. For purposes of this section,
research report means a written communication, as defined in Rule 405, that includes
information, opinions, or recommendations with respect to securities of an issuer or an
analysis of a security or an issuer, whether or not it provides information reasonably
sufficient upon which to base an investment decision.
[70 FR 44802, Aug. 3, 2005, as amended at 73 FR 967, Jan. 4, 2008; 76 FR
46617, Aug. 3, 2011; 85 FR 33290, June 1, 2020]
230.139 — Publications or distributions of research reports by brokers or dealers distributing securities.
(a) Registered offerings. Under the conditions of paragraph (a)(1)
or (2) of this section, a broker's or dealer's publication or distribution of a research
report about an issuer or any of its securities shall be deemed for purposes of sections
2(a)(10) and 5(c) of the Act not to constitute an offer for sale or offer to sell a security
that is the subject of an offering pursuant to a registration statement that the issuer
proposes to file, or has filed, or that is effective, even if the broker or dealer is
participating or will participate in the registered offering of the issuer's securities. For
purposes of the Fair Access to Investment Research Act of 2017 [Pub. L. 115-66, 131 Stat.
1196 (2017)], a safe harbor has been established for covered investment fund research
reports, and the specific terms of that safe harbor are set forth in §230.139b.
(1) Issuer-specific research reports. (i) The issuer either:
(A)(1) At the later of the time of filing its most recent Form S-3
(§ 239.13 of this chapter) or Form F-3 (§ 239.33 of this chapter) or the time of its most
recent amendment to such registration statement for purposes of complying with section
10(a)(3) of the Act or, if no Form S-3 or Form F-3 has been filed, at the date of reliance
on this section, meets the registrant requirements of such Form S-3 or Form F-3 and:
(i) At such date, meets the minimum float provisions of General
Instruction I.B.1 of such Forms; or
(ii) At the date of reliance on this section, is, or if a
registration statement has not been filed, will be, offering non-convertible securities,
other than common equity, and meets the requirements for the General Instruction I.B.2. of
Form S-3 or Form F-3 (referenced in 17 CFR 239.13 and 17 CFR 239.33 of this chapter); or
(iii) At the date of reliance on this section is a well-known
seasoned issuer as defined in Rule 405 (§ 230.405), other than a majority-owned subsidiary
that is a well-known seasoned issuer by virtue of paragraph (1)(ii) of the definition of
well-known seasoned issuer in Rule 405; and
(2) As of the date of reliance on this section, has filed all
periodic reports required during the preceding 12 months on Forms 10-K (§ 249.310 of this
chapter), 10-Q (§ 249.308a of this chapter), and 20-F (§ 249.220f of this chapter) pursuant
to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
78o(d)); or
(B) Is a foreign private issuer that as of the date of reliance on this
section:
(1) Meets all of the registrant requirements of Form F-3 other than
the reporting history provisions of General Instructions I.A.1. and I.A.2(a) of Form
F-3;
(2) Either:
(i) Satisfies the public float threshold in General Instruction
I.B.1. of Form F-3; or
(ii) Is issuing non-convertible securities, other than common
equity, and meets the provisions of General Instruction I.B.2. of Form F-3 (referenced in 17
CFR 239.33 of this chapter); and
(3) Either:
(i) Has its equity securities trading on a designated offshore
securities market as defined in Rule 902(b) (§ 230.902(b)) and has had them so traded for at
least 12 months; or
(ii) Has a worldwide market value of its outstanding common equity
held by non-affiliates of $700 million or more;
(ii) The issuer is not and during the past three years neither the issuer
nor any of its predecessors was:
(A) A blank check company as defined in Rule 419(a)(2) (§
230.419(a)(2));
(B) A shell company, other than a business combination related shell
company, each as defined in Rule 405 (§ 230.405); or
(C) An issuer for an offering of penny stock as defined in Rule 3a51-1 of
the Securities Exchange Act of 1934 (§ 240.3a51-1 of this chapter); and
(iii) The broker or dealer publishes or distributes research reports in
the regular course of its business and such publication or distribution does not represent
the initiation of publication of research reports about such issuer or its securities or
reinitiation of such publication following discontinuation of publication of such research
reports.
(2) Industry reports. (i) The issuer is required to file reports
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 or satisfies
the conditions in paragraph (a)(1)(i)(B) of this section;
(ii) The condition in paragraph (a)(1)(ii) of this section is
satisfied;
(iii) The research report includes similar information with respect to a
substantial number of issuers in the issuer's industry or sub-industry, or contains a
comprehensive list of securities currently recommended by the broker or dealer;
(iv) The analysis regarding the issuer or its securities is given no
materially greater space or prominence in the publication than that given to other
securities or issuers; and
(v) The broker or dealer publishes or distributes research reports in the
regular course of its business and, at the time of the publication or distribution of the
research report, is including similar information about the issuer or its securities in
similar reports.
(b) Rule 144A offerings. If the conditions in paragraph (a)(1) or
(a)(2) of this section are satisfied, a broker's or dealer's publication or distribution of
a research report shall not be considered an offer for sale or an offer to sell a security
or general solicitation or general advertising, in connection with an offering relying on
Rule 144A (§ 230.144A).
(c) Regulation S offerings. If the conditions in paragraph (a)(1)
or (a)(2) of this section are satisfied, a broker's or dealer's publication or distribution
of a research report shall not:
(1) Constitute directed selling efforts as defined in Rule 902(c) (§
230.902(c)) for offerings under Regulation S (§§ 230.901 through 230.905); or
(2) Be inconsistent with the offshore transaction requirement in Rule
902(h) (§ 230.902(h)) for offerings under Regulation S.
(d) Definition of research report. For purposes of this section,
research report means a written communication, as defined in Rule 405, that
includes information, opinions, or recommendations with respect to securities of an issuer
or an analysis of a security or an issuer, whether or not it provides information reasonably
sufficient upon which to base an investment decision.
Instruction to § 230.139. Projections. A projection constitutes an analysis or
information falling within the definition of research report. When a broker or dealer
publishes or distributes projections of an issuer's sales or earnings in reliance on
paragraph (a)(2) of this section, it must:
1. Have previously published or distributed
projections on a regular basis in order to satisfy the “regular course of its business”
condition;
2. At the time of publishing or disseminating a
research report, be publishing or distributing projections with respect to that issuer;
and
3. For purposes of paragraph (a)(2)(iii) of this
section, include projections covering the same or similar periods with respect to either a
substantial number of issuers in the issuer's industry or sub-industry or substantially all
issuers represented in the comprehensive list of securities contained in the research
report.
[70 FR 44803, Aug. 3, 2005, as amended at 71 FR
7413, Feb. 13, 2006; 73 FR 967, Jan. 4, 2008; 76 FR 46617, Aug. 3, 2011; 83 FR 64180, Dec.
13, 2018]
230.139a — Publications by brokers or dealers distributing asset-backed securities.
The publication or distribution by a broker or dealer of information, an
opinion or a recommendation with respect to asset-backed securities meeting the criteria of
Form SF-3 (§ 239.45 of this chapter) (“SF-3 ABS”) shall not be deemed to constitute an offer
for sale or offer to sell SF-3 ABS registered or proposed to be registered for purposes of
sections 2(a)(10) and 5(c) of the Act (15 U.S.C. 77b(a)(10) and 77e(c)) (the “registered
securities”), even if such broker or dealer is or will be a participant in the distribution
of the registered securities, if the following conditions are met:
(a) The broker or dealer shall have previously published or distributed
with reasonable regularity information, opinions or recommendations relating to SF-3 ABS
backed directly (or, with respect to securitizations of other securities, indirectly) by
substantially similar collateral as that directly or indirectly backing SF-3 ABS that is the
subject of the information, opinion or recommendation that is proposed to be published or
distributed.
(b) If the registered securities are proposed to be offered, offered or
part of an unsold allotment or subscription, the information, opinion or recommendation
shall not:
(1) Identify the registered securities;
(2) Give greater prominence to specific structural or collateral-related
attributes of the registered securities than it gives to the same attributes of other
asset-backed securities that it mentions; or
(3) Contain any ABS informational and computational material (as
defined in § 229.1101 of this chapter) relating to the registered securities.
(c) Sufficient information is available from one or more public sources to
provide a reasonable basis for the view expressed by the broker or dealer with respect to
the asset-backed securities that are the subject of the information, opinion or
recommendation.
(d) If the material published by the broker or dealer identifies
asset-backed securities backed directly or indirectly by substantially similar collateral as
that directly or indirectly backing the registered securities and specifically recommends
that such asset-backed securities be preferred over other asset-backed securities backed by
different types of collateral, then the material shall explain in reasonable detail the
reasons for such preference.
[70 FR 1615, Jan. 7, 2005, as amended at 70 FR
44804, Aug. 3, 2005; 79 FR 57183, Sept. 24, 2014]
120.139b — Publications or distributions of covered investment fund research reports by brokers or dealers distributing securities.
(a) Registered offerings. Under the conditions of paragraph
(a)(1) or (2) of this section, the publication or distribution of a covered investment
fund research report by a broker or dealer that is not an investment adviser to the
covered investment fund and is not an affiliated person of the investment adviser to the
covered investment fund shall be deemed for purposes of sections 2(a)(10) and 5(c) of the
Act not to constitute an offer for sale or offer to sell a security that is the subject of
an offering pursuant to a registration statement of the covered investment fund that is
effective, even if the broker or dealer is participating or may participate in the
registered offering of the covered investment fund's securities. This section does not
affect the availability of any other exemption or exclusion from sections 2(a)(10) or 5(c)
of the Act available to the broker or dealer.
(1) Issuer-specific research reports. (i) At the date of
reliance on this section:
(A) The covered investment fund:
(1) Has been subject to the reporting requirements of section 30
of the Investment Company Act of 1940 (the “Investment Company Act”) (15 U.S.C. 80a-29)
for a period of at least 12 calendar months and has filed in a timely manner all of the
reports required, as applicable, to be filed for the immediately preceding 12 calendar
months on Forms N-CSR (§§249.331 and 274.128 of this chapter), N-Q (§§249.332 and 274.130
of this chapter), N-PORT (§274.150 of this chapter), N-MFP (§274.201 of this chapter), and
N-CEN (§§249.330 and 274.101 of this chapter) pursuant to section 30 of the Investment
Company Act; or
(2) If the covered investment fund is not a registered investment
company under the Investment Company Act, has been subject to the reporting requirements
of section 13 or section 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)
(15 U.S.C. 78m or 78o(d)) for a period of at least 12 calendar months and has filed in a
timely manner all of the reports required to be filed for the immediately preceding 12
calendar months on Forms 10-K (§249.310 of this chapter) and 10-Q (§249.308a of this
chapter), or 20-F (§249.220f of this chapter) pursuant to section 13 or section 15(d) of
the Exchange Act; and
(B) At the time of the broker's or dealer's initial publication or
distribution of a research report on the covered investment fund (or reinitation thereof),
and at least quarterly thereafter;
(1) If the covered investment fund is of the type defined in
paragraph (c)(2)(i) of this section, the aggregate market value of voting and non-voting
common equity held by affiliates and non-affiliates equals or exceeds the aggregate market
value specified in General Instruction I.B.1 of Form S-3 (§239.13 of this chapter);
(2) If the covered investment fund is of the type defined in
paragraph (c)(2)(ii) of this section, the aggregate market value of voting and non-voting
common equity held by non-affiliates equals or exceeds the aggregate market value
specified in General Instruction I.B.1 of Form S-3 (§239.13 of this chapter); or
(3) If the covered investment fund is a registered open-end
investment company (other than an exchange-traded fund) its net asset value (inclusive of
shares held by affiliates and non-affiliates) equals or exceeds the aggregate market value
specified in General Instruction I.B.1 of Form S-3 (§239.13 of this chapter); and
(ii) The broker or dealer publishes or distributes research reports in
the regular course of its business and, in the case of a research report regarding a
covered investment fund that does not have a class of securities in substantially
continuous distribution, such publication or distribution does not represent the
initiation of publication of research reports about such covered investment fund or its
securities or reinitiation of such publication following discontinuation of publication of
such research reports.
(2) Industry reports. (i) The covered investment fund is subject
to the reporting requirements of section 30 of the Investment Company Act or, if the
covered investment fund is not a registered investment company under the Investment
Company Act, is subject to the reporting requirements of section 13 or section 15(d) of
the Exchange Act;
(ii) The covered investment fund research report:
(A) Includes similar information with respect to a substantial number of
covered investment fund issuers of the issuer's type (e.g., money market fund, bond fund,
balanced fund, etc.), or investment focus (e.g., primarily invested in the same industry
or sub-industry, or the same country or geographic region); or
(B) Contains a comprehensive list of covered investment fund securities
currently recommended by the broker or dealer (other than securities of a covered
investment fund that is an affiliate of the broker or dealer, or for which the broker or
dealer serves as investment adviser (or for which the broker or dealer is an affiliated
person of the investment adviser));
(iii) The analysis regarding the covered investment fund issuer or its
securities is given no materially greater space or prominence in the publication than that
given to other covered investment fund issuers or securities; and
(iv) The broker or dealer publishes or distributes research reports in
the regular course of its business and, at the time of the publication or distribution of
the research report (in the case of a research report regarding a covered investment fund
that does not have a class of securities in substantially continuous distribution), is
including similar information about the issuer or its securities in similar reports.
(3) Disclosure of standardized performance. In the case of a
research report about a covered investment fund that is a registered open-end management
investment company or a trust account (or series or class thereof), any quotation of the
issuer's performance must be presented in accordance with the conditions of paragraphs
(d), (e), and (g) of §230.482. In the case of a research report about a covered investment
fund that is a registered closed-end investment company, any quotation of the issuer's
performance must be presented in a manner that is in accordance with instructions to item
4.1(g) of Form N-2 (§§239.14 and 274.11a-1 of this chapter), provided, however, that other
historical measures of performance may also be included if any other measurement is set
out with no greater prominence than the measurement that is in accordance with the
instructions to item 4.1(g) of Form N-2.
(b) Self-regulatory organization rules. A self-regulatory
organization shall not maintain or enforce any rule that would prohibit the ability of a
member to publish or distribute a covered investment fund research report solely because
the member is also participating in a registered offering or other distribution of any
securities of such covered investment fund; or to participate in a registered offering or
other distribution of securities of a covered investment fund solely because the member
has published or distributed a covered investment fund research report about such covered
investment fund or its securities. For purposes of section 19(b) of the Exchange Act (15
U.S.C. 78s(b)), this paragraph (b) shall be deemed a rule under that Act.
(c) Definitions. For purposes of this section:
(1) Affiliated person has the meaning given the term in section
2(a) of the Investment Company Act.
(2) Covered investment fund means:
(i) An investment company (or a series or class thereof) registered
under, or that has filed an election to be treated as a business development company
under, the Investment Company Act and that has filed a registration statement under the
Act for the public offering of a class of its securities, which registration statement has
been declared effective by the Commission; or
(ii) A trust or other person:
(A) Issuing securities in an offering registered under the Act and which
class of securities is listed for trading on a national securities exchange;
(B) The assets of which consist primarily of commodities, currencies, or
derivative instruments that reference commodities or currencies, or interests in the
foregoing; and
(C) That provides in its registration statement under the Act that a
class of its securities are purchased or redeemed, subject to conditions or limitations,
for a ratable share of its assets.
(3) Covered investment fund research report means a research
report published or distributed by a broker or dealer about a covered investment fund or
any securities issued by the covered investment fund, but does not include a research
report to the extent that the research report is published or distributed by the covered
investment fund or any affiliate of the covered investment fund, or any research report
published or distributed by any broker or dealer that is an investment adviser (or any
affiliated person of an investment adviser) for the covered investment fund.
(4) Exchange-traded fund has the meaning given the term in
General Instruction A to Form N-1A (§§239.15A and 274.11A of this chapter).
(5) Investment adviser has the meaning given the term in section
2(a) of the Investment Company Act.
(6) Research report means a written communication, as defined in
§230.405 that includes information, opinions, or recommendations with respect to
securities of an issuer or an analysis of a security or an issuer, whether or not it
provides information reasonably sufficient upon which to base an investment decision.
[83 FR 64180, Dec. 13, 2018]
230.140 — Definition of “distribution” in section 2(11) for certain transactions.
A person, the chief part of whose business consists of the purchase of the
securities of one issuer, or of two or more affiliated issuers, and the sale of its own
securities, including the levying of assessments on its assessable stock and the resale of
such stock upon the failure of the holder thereof to pay any assessment levied thereon, to
furnish the proceeds with which to acquire the securities of such issuer or affiliated
issuers, is to be regarded as engaged in the distribution of the securities of such issuer
or affiliated issuers within the meaning of section 2(11) of the Act.
[24 FR 6386, Aug. 8, 1959]
230.141 — Definition of “commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commissions” in section 2(11), for certain transactions.
(a) The term commission in section 2(11) of the Act shall include
such remuneration, commonly known as a spread, as may be received by a distributor or dealer
as a consequence of reselling securities bought from an underwriter or dealer at a price
below the offering price of such securities, where such resales afford the distributor or
dealer a margin of profit not in excess of what is usual and customary in such
transactions.
(b) The term commission from an underwriter or dealer in section
2(11) of the Act shall include commissions paid by an underwriter or dealer directly or
indirectly controlling or controlled by, or under direct or indirect common control with the
issuer.
(c) The term usual and customary distributors' or sellers'
commission in section 2(11) of the Act shall mean a commission or remuneration,
commonly known as a spread, paid to or received by any person selling securities either for
his own account or for the account of others, which is not in excess of the amount usual and
customary in the distribution and sale of issues of similar type and size; and not in excess
of the amount allowed to other persons, if any, for comparable service in the distribution
of the particular issue; but such term shall not include amounts paid to any person whose
function is the management of the distribution of all or a substantial part of the
particular issue, or who performs the functions normally performed by an underwriter or
underwriting syndicate.
[2 FR 1075, May 26, 1937]
230.142 — Definition of “participates” and “participation,” as used in section 2(11), in relation to certain transactions.
(a) The terms participates and participation in section
2(11) (48 Stat. 74, 48 Stat. 905; 15 U.S.C. 77b) shall not include the interest of a person
(1) who is not in privity of contract with the issuer nor directly or indirectly
controlling, controlled by, or under common control with, the issuer, and (2) who has no
association with any principal underwriter of the securities being distributed, and (3)
whose function in the distribution is confined to an undertaking to purchase all or some
specified proportion of the securities remaining unsold after the lapse of some specified
period of time, and (4) who purchases such securities for investment and not with a view to
distribution.
(b) As used in this section:
(1) The term issuer shall have the meaning defined in section 2(4)
(48 Stat. 74, 48 Stat. 905; 15 U.S.C. 77b) and in the last sentence of section 2(11).
(2) The term association shall include a relationship between two
persons under which one:
(i) Is directly or indirectly controlling, controlled by, or under common
control with, the other, or
(ii) Has, in common with the other, one or more partners, officers,
directors, trustees, branch managers, or other persons occupying a similar status or
performing similar functions, or
(iii) Has a participation, direct or indirect, in the profits of the
other, or has a financial stake, by debtor-creditor relationship, stock ownership, contract
or otherwise, in the income or business of the other.
(3) The term principal underwriter shall have the meaning defined
in § 230.405.
[3 FR 3015, Dec. 16, 1938]
Cross Reference:
For interpretative release applicable to § 230.142, see No. 1862 in
tabulation, part 231, of this chapter.
230.143 — Definition of “has purchased”, “sells for”, “participates”, and “participation”, as used in section 2(11), in relation to certain transactions of foreign governments for war purposes.
The terms has purchased, sells for, participates, and
participation, in section 2(11) (48 Stat. 74, 48 Stat. 905; 15 U.S.C. 77b), shall
not be deemed to apply to any action of a foreign government in acquiring, for war purposes
and by or in anticipation of the exercise of war powers, from any person subject to its
jurisdiction securities of a person organized under the laws of the United States or any
State or Territory, or in disposing of such securities with a view to their distribution by
underwriters in the United States, notwithstanding the fact that the price to be paid to
such foreign government upon the disposition of such securities by it may be measured by or
may be in direct or indirect relation to such price as may be realized by the
underwriters.
[6 FR 2052, Apr. 23, 1941]
230.144 — Persons deemed not to be engaged in a distribution and therefore not underwriters.
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Preliminary Note:
Certain basic principles are essential to an understanding of
the registration requirements in the Securities Act of 1933 (the Act or the
Securities Act) and the purposes underlying Rule 144:
1. If any person sells a non-exempt security to any other
person, the sale must be registered unless an exemption can be found for the
transaction.
2. Section 4(1) of the Securities Act provides one such
exemption for a transaction “by a person other than an issuer, underwriter, or
dealer.” Therefore, an understanding of the term “underwriter” is important in
determining whether or not the Section 4(1) exemption from registration is
available for the sale of the securities.
The term “underwriter” is broadly defined in Section 2(a)(11)
of the Securities Act to mean any person who has purchased from an issuer with a
view to, or offers or sells for 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. The interpretation of this
definition traditionally has focused on the words “with a view to” in the phrase
“purchased from an issuer with a view to * * * distribution.” An investment
banking firm which arranges with an issuer for the public sale of its securities
is clearly an “underwriter” under that section. However, individual investors
who are not professionals in the securities business also may be “underwriters”
if they act as links in a chain of transactions through which securities move
from an issuer to the public.
Since it is difficult to ascertain the mental state of the
purchaser at the time of an acquisition of securities, prior to and since the
adoption of Rule 144, subsequent acts and circumstances have been considered to
determine whether the purchaser took the securities “with a view to
distribution” at the time of the acquisition. Emphasis has been placed on
factors such as the length of time the person held the securities and whether
there has been an unforeseeable change in circumstances of the holder.
Experience has shown, however, that reliance upon such factors alone has led to
uncertainty in the application of the registration provisions of the Act.
The Commission adopted Rule 144 to establish specific criteria
for determining whether a person is not engaged in a distribution. Rule 144
creates a safe harbor from the Section 2(a)(11) definition of “underwriter.” A
person satisfying the applicable conditions of the Rule 144 safe harbor is
deemed not to be engaged in a distribution of the securities and therefore not
an underwriter of the securities for purposes of Section 2(a)(11). Therefore,
such a person is deemed not to be an underwriter when determining whether a sale
is eligible for the Section 4(1) exemption for “transactions by any person other
than an issuer, underwriter, or dealer.” If a sale of securities complies with
all of the applicable conditions of Rule 144:
1. Any affiliate or other person who sells restricted
securities will be deemed not to be engaged in a distribution and therefore not
an underwriter for that transaction;
2. Any person who sells restricted or other securities on
behalf of an affiliate of the issuer will be deemed not to be engaged in a
distribution and therefore not an underwriter for that transaction; and
3. The purchaser in such transaction will receive securities
that are not restricted securities.
Rule 144 is not an exclusive safe harbor. A person who does
not meet all of the applicable conditions of Rule 144 still may claim any other
available exemption under the Act for the sale of the securities. The Rule 144
safe harbor is not available to any person with respect to any transaction or
series of transactions that, although in technical compliance with Rule 144, is
part of a plan or scheme to evade the registration requirements of the Act.
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(a) Definitions. The following definitions shall apply for the
purposes of this section.
(1) An affiliate of an issuer is a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or is under
common control with, such issuer.
(2) The term person when used with reference to a person for whose
account securities are to be sold in reliance upon this section includes, in addition to
such person, all of the following persons:
(i) Any relative or spouse of such person, or any relative of such spouse,
any one of whom has the same home as such person;
(ii) Any trust or estate in which such person or any of the persons
specified in paragraph (a)(2)(i) of this section collectively own 10 percent or more of the
total beneficial interest or of which any of such persons serve as trustee, executor or in
any similar capacity; and
(iii) Any corporation or other organization (other than the issuer) in
which such person or any of the persons specified in paragraph (a)(2)(i) of this section are
the beneficial owners collectively of 10 percent or more of any class of equity securities
or 10 percent or more of the equity interest.
(3) The term restricted securities means:
(i) Securities acquired directly or indirectly from the issuer, or from an
affiliate of the issuer, in a transaction or chain of transactions not involving any public
offering;
(ii) Securities acquired from the issuer that are subject to the resale
limitations of § 230.502(d) under Regulation D or § 230.701(c);
(iii) Securities acquired in a transaction or chain of transactions
meeting the requirements of § 230.144A;
(iv) Securities acquired from the issuer in a transaction subject to the
conditions of Regulation CE (§ 230.1001);
(v) Equity securities of domestic issuers acquired in a transaction or
chain of transactions subject to the conditions of § 230.901 or § 230.903 under Regulation S
(§ 230.901 through § 230.905, and Preliminary Notes);
(vi) Securities acquired in a transaction made under § 230.801 to the same
extent and proportion that the securities held by the security holder of the class with
respect to which the rights offering was made were, as of the record date for the rights
offering, “restricted securities” within the meaning of this paragraph (a)(3);
(vii) Securities acquired in a transaction made under § 230.802 to the
same extent and proportion that the securities that were tendered or exchanged in the
exchange offer or business combination were “restricted securities” within the meaning of
this paragraph (a)(3); and
(viii) Securities acquired from the issuer in a transaction subject to an
exemption under section 4(5) (15 U.S.C. 77d(5)) of the Act.
(4) The term debt securities means:
(i) Any security other than an equity security as defined in §
230.405;
(ii) Non-participatory preferred stock, which is defined as
non-convertible capital stock, the holders of which are entitled to a preference in payment
of dividends and in distribution of assets on liquidation, dissolution, or winding up of the
issuer, but are not entitled to participate in residual earnings or assets of the issuer;
and
(iii) Asset-backed securities, as defined in § 229.1101 of this
chapter.
(b) Conditions to be met. Subject to paragraph (i) of this section,
the following conditions must be met:
(1) Non-affiliates. (i) If the issuer of the securities is, and has
been for a period of at least 90 days immediately before the sale, subject to the reporting
requirements of section 13 or 15(d) of the Securities Exchange Act of 1934 (the Exchange
Act), any person who is not an affiliate of the issuer at the time of the sale, and has not
been an affiliate during the preceding three months, who sells restricted securities of the
issuer for his or her own account shall be deemed not to be an underwriter of those
securities within the meaning of section 2(a)(11) of the Act if all of the conditions of
paragraphs (c)(1) and (d) of this section are met. The requirements of paragraph (c)(1) of
this section shall not apply to restricted securities sold for the account of a person who
is not an affiliate of the issuer at the time of the sale and has not been an affiliate
during the preceding three months, provided a period of one year has elapsed since the later
of the date the securities were acquired from the issuer or from an affiliate of the
issuer.
(ii) If the issuer of the securities is not, or has not been for a period
of at least 90 days immediately before the sale, subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act, any person who is not an affiliate of the issuer at
the time of the sale, and has not been an affiliate during the preceding three months, who
sells restricted securities of the issuer for his or her own account shall be deemed not to
be an underwriter of those securities within the meaning of section 2(a)(11) of the Act if
the condition of paragraph (d) of this section is met.
(2) Affiliates or persons selling on behalf of affiliates. Any
affiliate of the issuer, or any person who was an affiliate at any time during the 90 days
immediately before the sale, who sells restricted securities, or any person who sells
restricted or any other securities for the account of an affiliate of the issuer of such
securities, or any person who sells restricted or any other securities for the account of a
person who was an affiliate at any time during the 90 days immediately before the sale,
shall be deemed not to be an underwriter of those securities within the meaning of section
2(a)(11) of the Act if all of the conditions of this section are met.
(c) Current public information. Adequate current public information
with respect to the issuer of the securities must be available. Such information will be
deemed to be available only if the applicable condition set forth in this paragraph is
met:
(1) Reporting issuers. The issuer is, and has been for a period of
at least 90 days immediately before the sale, subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act and has:
(i) Filed all required reports under section 13 or 15(d) of the Exchange
Act, as applicable, during the 12 months preceding such sale (or for such shorter period
that the issuer was required to file such reports), other than Form 8-K reports (§ 249.308
of this chapter); and
(ii) Submitted electronically every Interactive Data File (§ 232.11 of
this chapter) required to be submitted pursuant to § 232.405 of this chapter, during the 12
months preceding such sale (or for such shorter period that the issuer was required to
submit such files); or
(2) Non-reporting issuers. If the issuer is not subject to the
reporting requirements of section 13 or 15(d) of the Exchange Act, there is publicly
available the information concerning the issuer specified in paragraphs (b)(5)(i)(A) to (N),
inclusive, and paragraph (b)(5)(i)(P) of § 240.15c2-11 of this chapter, or, if the issuer is
an insurance company, the information specified in section 12(g)(2)(G)(i) of the Exchange
Act (15 U.S.C. 78l(g)(2)(G)(i)).
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Note to § 230.144(c).
With respect to paragraph (c)(1), the person can rely
upon:
1. A statement in whichever is the most recent report,
quarterly or annual, required to be filed and filed by the issuer that such
issuer has:
a. Filed all reports required under section 13 or 15(d) of the
Exchange Act, as applicable, during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), other than Form 8-K
reports (§ 249.308 of this chapter), and has been subject to such filing
requirements for the past 90 days; and
b. Submitted electronically every Interactive Data File
(§ 232.11 of this chapter) required to be submitted pursuant to § 232.405 of
this chapter, during the preceding 12 months (or for such shorter period that
the issuer was required to submit such files); or
2. A written statement from the issuer that it has complied
with such reporting or submission requirements.
3. Neither type of statement may be relied upon, however, if
the person knows or has reason to believe that the issuer has not complied with
such requirements.
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(d) Holding period for restricted securities. If the securities
sold are restricted securities, the following provisions apply:
(1) General rule. (i) If the issuer of the securities is, and has
been for a period of at least 90 days immediately before the sale, subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act, a minimum of six months must elapse
between the later of the date of the acquisition of the securities from the issuer, or from
an affiliate of the issuer, and any resale of such securities in reliance on this section
for the account of either the acquiror or any subsequent holder of those securities.
(ii) If the issuer of the securities is not, or has not been for a period
of at least 90 days immediately before the sale, subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act, a minimum of one year must elapse between the later
of the date of the acquisition of the securities from the issuer, or from an affiliate of
the issuer, and any resale of such securities in reliance on this section for the account of
either the acquiror or any subsequent holder of those securities.
(iii) If the acquiror takes the securities by purchase, the holding period
shall not begin until the full purchase price or other consideration is paid or given by the
person acquiring the securities from the issuer or from an affiliate of the issuer.
(2) Promissory notes, other obligations or installment contracts.
Giving the issuer or affiliate of the issuer from whom the securities were purchased a
promissory note or other obligation to pay the purchase price, or entering into an
installment purchase contract with such seller, shall not be deemed full payment of the
purchase price unless the promissory note, obligation or contract:
(i) Provides for full recourse against the purchaser of the
securities;
(ii) Is secured by collateral, other than the securities purchased, having
a fair market value at least equal to the purchase price of the securities purchased;
and
(iii) Shall have been discharged by payment in full prior to the sale of
the securities.
(3) Determination of holding period. The following provisions shall
apply for the purpose of determining the period securities have been held:
(i) Stock dividends, splits and recapitalizations. Securities
acquired from the issuer as a dividend or pursuant to a stock split, reverse split or
recapitalization shall be deemed to have been acquired at the same time as the securities on
which the dividend or, if more than one, the initial dividend was paid, the securities
involved in the split or reverse split, or the securities surrendered in connection with the
recapitalization.
(ii) Conversions and exchanges. If the securities sold were
acquired from the issuer solely in exchange for other securities of the same issuer, the
newly acquired securities shall be deemed to have been acquired at the same time as the
securities surrendered for conversion or exchange, even if the securities surrendered were
not convertible or exchangeable by their terms.
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Note to § 230.144(d)(3)(ii).
If the surrendered securities originally did not provide for
cashless conversion or exchange by their terms and the holder provided
consideration, other than solely securities of the same issuer, in connection
with the amendment of the surrendered securities to permit cashless conversion
or exchange, then the newly acquired securities shall be deemed to have been
acquired at the same time as such amendment to the surrendered securities, so
long as, in the conversion or exchange, the securities sold were acquired from
the issuer solely in exchange for other securities of the same issuer.
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(iii) Contingent issuance of securities. Securities acquired as a
contingent payment of the purchase price of an equity interest in a business, or the assets
of a business, sold to the issuer or an affiliate of the issuer shall be deemed to have been
acquired at the time of such sale if the issuer or affiliate was then committed to issue the
securities subject only to conditions other than the payment of further consideration for
such securities. An agreement entered into in connection with any such purchase to remain in
the employment of, or not to compete with, the issuer or affiliate or the rendering of
services pursuant to such agreement shall not be deemed to be the payment of further
consideration for such securities.
(iv) Pledged securities. Securities which are bona-fide pledged by
an affiliate of the issuer when sold by the pledgee, or by a purchaser, after a default in
the obligation secured by the pledge, shall be deemed to have been acquired when they were
acquired by the pledgor, except that if the securities were pledged without recourse they
shall be deemed to have been acquired by the pledgee at the time of the pledge or by the
purchaser at the time of purchase.
(v) Gifts of securities. Securities acquired from an affiliate of
the issuer by gift shall be deemed to have been acquired by the donee when they were
acquired by the donor.
(vi) Trusts. Where a trust settlor is an affiliate of the issuer,
securities acquired from the settlor by the trust, or acquired from the trust by the
beneficiaries thereof, shall be deemed to have been acquired when such securities were
acquired by the settlor.
(vii) Estates. Where a deceased person was an affiliate of the
issuer, securities held by the estate of such person or acquired from such estate by the
estate beneficiaries shall be deemed to have been acquired when they were acquired by the
deceased person, except that no holding period is required if the estate is not an affiliate
of the issuer or if the securities are sold by a beneficiary of the estate who is not such
an affiliate.
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Note to § 230.144(d)(3)(vi)).
While there is no holding period or amount limitation for
estates and estate beneficiaries which are not affiliates of the issuer,
paragraphs (c) and (h) of this section apply to securities sold by such persons
in reliance upon this section.
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(viii) Rule 145(a) transactions. The holding period for securities
acquired in a transaction specified in § 230.145(a) shall be deemed to commence on the date
the securities were acquired by the purchaser in such transaction, except as otherwise
provided in paragraphs (d)(3)(ii) and (ix) of this section.
(ix) Holding company formations. Securities acquired from the
issuer in a transaction effected solely for the purpose of forming a holding company shall
be deemed to have been acquired at the same time as the securities of the predecessor issuer
exchanged in the holding company formation where:
(A) The newly formed holding company's securities were issued solely in
exchange for the securities of the predecessor company as part of a reorganization of the
predecessor company into a holding company structure;
(B) Holders received securities of the same class evidencing the same
proportional interest in the holding company as they held in the predecessor, and the rights
and interests of the holders of such securities are substantially the same as those they
possessed as holders of the predecessor company's securities; and
(C) Immediately following the transaction, the holding company has no
significant assets other than securities of the predecessor company and its existing
subsidiaries and has substantially the same assets and liabilities on a consolidated basis
as the predecessor company had before the transaction.
(x) Cashless exercise of options and warrants. If the securities
sold were acquired from the issuer solely upon cashless exercise of options or warrants
issued by the issuer, the newly acquired securities shall be deemed to have been acquired at
the same time as the exercised options or warrants, even if the options or warrants
exercised originally did not provide for cashless exercise by their terms.
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Note 1 to § 230.144(d)(3)(x).
If the options or warrants originally did not provide for
cashless exercise by their terms and the holder provided consideration, other
than solely securities of the same issuer, in connection with the amendment of
the options or warrants to permit cashless exercise, then the newly acquired
securities shall be deemed to have been acquired at the same time as such
amendment to the options or warrants so long as the exercise itself was
cashless.
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Note 2 to § 230.144(d)(3)(x).
If the options or warrants are not purchased for cash or
property and do not create any investment risk to the holder, as in the case of
employee stock options, the newly acquired securities shall be deemed to have
been acquired at the time the options or warrants are exercised, so long as the
full purchase price or other consideration for the newly acquired securities has
been paid or given by the person acquiring the securities from the issuer or
from an affiliate of the issuer at the time of exercise.
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(e) Limitation on amount of securities sold. Except as hereinafter
provided, the amount of securities sold for the account of an affiliate of the issuer in
reliance upon this section shall be determined as follows:
(1) If any securities are sold for the account of an affiliate of the
issuer, regardless of whether those securities are restricted, the amount of securities
sold, together with all sales of securities of the same class sold for the account of such
person within the preceding three months, shall not exceed the greatest of:
(i) One percent of the shares or other units of the class outstanding as
shown by the most recent report or statement published by the issuer, or
(ii) The average weekly reported volume of trading in such securities on
all national securities exchanges and/or reported through the automated quotation system of
a registered securities association during the four calendar weeks preceding the filing of
notice required by paragraph (h), or if no such notice is required the date of receipt of
the order to execute the transaction by the broker or the date of execution of the
transaction directly with a market maker, or
(iii) The average weekly volume of trading in such securities reported
pursuant to an effective transaction reporting plan or an effective national
market system plan as those terms are defined in § 242.600 of this chapter during the
four-week period specified in paragraph (e)(1)(ii) of this section.
(2) If the securities sold are debt securities, then the amount of debt
securities sold for the account of an affiliate of the issuer, regardless of whether those
securities are restricted, shall not exceed the greater of the limitation set forth in
paragraph (e)(1) of this section or, together with all sales of securities of the same
tranche (or class when the securities are non-participatory preferred stock) sold for the
account of such person within the preceding three months, ten percent of the principal
amount of the tranche (or class when the securities are non-participatory preferred stock)
attributable to the securities sold.
(3) Determination of amount. For the purpose of determining the
amount of securities specified in paragraph (e)(1) of this section and, as applicable,
paragraph (e)(2) of this section, the following provisions shall apply:
(i) Where both convertible securities and securities of the class into
which they are convertible are sold, the amount of convertible securities sold shall be
deemed to be the amount of securities of the class into which they are convertible for the
purpose of determining the aggregate amount of securities of both classes sold;
(ii) The amount of securities sold for the account of a pledgee of those
securities, or for the account of a purchaser of the pledged securities, during any period
of three months within six months (or within one year if the issuer of the securities is
not, or has not been for a period of at least 90 days immediately before the sale, subject
to the reporting requirements of section 13 or 15(d) of the Exchange Act) after a default in
the obligation secured by the pledge, and the amount of securities sold during the same
three-month period for the account of the pledgor shall not exceed, in the aggregate, the
amount specified in paragraph (e)(1) or (2) of this section, whichever is applicable;
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Note to § 230.144(e)(3)(ii).
Sales by a pledgee of securities pledged by a borrower will
not be aggregated under paragraph (e)(3)(ii) with sales of the securities of the
same issuer by other pledgees of such borrower in the absence of concerted
action by such pledgees.
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(iii) The amount of securities sold for the account of a donee of those
securities during any three-month period within six months (or within one year if the issuer
of the securities is not, or has not been for a period of at least 90 days immediately
before the sale, subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act) after the donation, and the amount of securities sold during the same
three-month period for the account of the donor, shall not exceed, in the aggregate, the
amount specified in paragraph (e)(1) or (2) of this section, whichever is applicable;
(iv) Where securities were acquired by a trust from the settlor of the
trust, the amount of such securities sold for the account of the trust during any
three-month period within six months (or within one year if the issuer of the securities is
not, or has not been for a period of at least 90 days immediately before the sale, subject
to the reporting requirements of section 13 or 15(d) of the Exchange Act) after the
acquisition of the securities by the trust, and the amount of securities sold during the
same three-month period for the account of the settlor, shall not exceed, in the aggregate,
the amount specified in paragraph (e)(1) or (2) of this section, whichever is
applicable;
(v) The amount of securities sold for the account of the estate of a
deceased person, or for the account of a beneficiary of such estate, during any three-month
period and the amount of securities sold during the same three-month period for the account
of the deceased person prior to his death shall not exceed, in the aggregate, the amount
specified in paragraph (e)(1) or (2) of this section, whichever is applicable:
Provided, that no limitation on amount shall apply if the estate or beneficiary of
the estate is not an affiliate of the issuer;
(vi) When two or more affiliates or other persons agree to act in concert
for the purpose of selling securities of an issuer, all securities of the same class sold
for the account of all such persons during any three-month period shall be aggregated for
the purpose of determining the limitation on the amount of securities sold;
(vii) The following sales of securities need not be included in
determining the amount of securities to be sold in reliance upon this section:
(A) Securities sold pursuant to an effective registration statement under
the Act;
(B) Securities sold pursuant to an exemption provided by Regulation A (§
230.251 through § 230.263) under the Act;
(C) Securities sold in a transaction exempt pursuant to section 4 of the
Act (15 U.S.C. 77d) and not involving any public offering; and
(D) Securities sold offshore pursuant to Regulation S (§ 230.901 through §
230.905, and Preliminary Notes) under the Act.
(f) Manner of sale. (1) The securities shall be sold in one of the
following manners:
(i) Brokers' transactions within the meaning of section 4(4) of the
Act;
(ii) Transactions directly with a market maker, as that term is
defined in section 3(a)(38) of the Exchange Act; or
(iii) Riskless principal transactions where:
(A) The offsetting trades must be executed at the same price (exclusive of
an explicitly disclosed markup or markdown, commission equivalent, or other fee);
(B) The transaction is permitted to be reported as riskless under the
rules of a self-regulatory organization; and
(C) The requirements of paragraphs (g)(2)(applicable to any markup or
markdown, commission equivalent, or other fee), (g)(3), and (g)(4) of this section are met.
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Note to § 230.144(f)(1):
For purposes of this paragraph, a riskless principal
transaction means a principal transaction where, after having received
from a customer an order to buy, a broker or dealer purchases the security as
principal in the market to satisfy the order to buy or, after having received
from a customer an order to sell, sells the security as principal to the market
to satisfy the order to sell.
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(2) The person selling the securities shall not:
(i) Solicit or arrange for the solicitation of orders to buy the
securities in anticipation of or in connection with such transaction, or
(ii) Make any payment in connection with the offer or sale of the
securities to any person other than the broker or dealer who executes the order to sell the
securities.
(3) Paragraph (f) of this section shall not apply to:
(i) Securities sold for the account of the estate of a deceased person or
for the account of a beneficiary of such estate provided the estate or estate beneficiary is
not an affiliate of the issuer; or
(ii) Debt securities.
(g) Brokers' transactions. The term brokers' transactions in
section 4(4) of the Act shall for the purposes of this rule be deemed to include
transactions by a broker in which such broker:
(1) Does no more than execute the order or orders to sell the securities
as agent for the person for whose account the securities are sold;
(2) Receives no more than the usual and customary broker's commission;
(3) Neither solicits nor arranges for the solicitation of customers'
orders to buy the securities in anticipation of or in connection with the transaction;
Provided, that the foregoing shall not preclude:
(i) Inquiries by the broker of other brokers or dealers who have indicated
an interest in the securities within the preceding 60 days;
(ii) Inquiries by the broker of his customers who have indicated an
unsolicited bona fide interest in the securities within the preceding 10 business days;
(iii) The publication by the broker of bid and ask quotations for the
security in an inter-dealer quotation system provided that such quotations are incident to
the maintenance of a bona fide inter-dealer market for the security for the broker's own
account and that the broker has published bona fide bid and ask quotations for the security
in an inter-dealer quotation system on each of at least twelve days within the preceding
thirty calendar days with no more than four business days in succession without such two-way
quotations; or
(iv) The publication by the broker of bid and ask quotations for the
security in an alternative trading system, as defined in § 242.300 of this chapter, provided
that the broker has published bona fide bid and ask quotations for the security in the
alternative trading system on each of the last twelve business days; and
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Note to § 230.144(g)(3)(ii).
The broker should obtain and retain in his files written
evidence of indications of bona fide unsolicited interest by his customers in
the securities at the time such indications are received.
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(4) After reasonable inquiry is not aware of circumstances indicating that
the person for whose account the securities are sold is an underwriter with respect to the
securities or that the transaction is a part of a distribution of securities of the issuer.
Without limiting the foregoing, the broker shall be deemed to be aware of any facts or
statements contained in the notice required by paragraph (h) of this section.
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Notes:
(i) The broker, for his own protection, should obtain and
retain in his files a copy of the notice required by paragraph (h) of this
section.
(ii) The reasonable inquiry required by paragraph (g)(3) of
this section should include, but not necessarily be limited to, inquiry as to
the following matters:
(a) The length of time the securities have been held by
the person for whose account they are to be sold. If practicable, the inquiry
should include physical inspection of the securities;
(b) The nature of the transaction in which the
securities were acquired by such person;
(c) The amount of securities of the same class sold
during the past 3 months by all persons whose sales are required to be taken
into consideration pursuant to paragraph (e) of this section;
(d) Whether such person intends to sell additional
securities of the same class through any other means;
(e) Whether such person has solicited or made any
arrangement for the solicitation of buy orders in connection with the proposed
sale of securities;
(f) Whether such person has made any payment to any
other person in connection with the proposed sale of the securities; and
(g) The number of shares or other units of the class
outstanding, or the relevant trading volume.
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(h) Notice of proposed sale. (1) Reporting issuers. If the
issuer is, and has been for a period of at least 90 days immediately before the sale,
subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and the
amount of securities to be sold in reliance upon this rule during any period of three months
exceeds 5,000 shares or other units or has an aggregate sale price in excess of $50,000, a
notice on Form 144 (§ 239.144 of this chapter) shall be filed electronically with the
Commission.
(2) Non-reporting issuers. If the issuer is not subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act, and the amount of securities to be
sold in reliance upon this rule during any period of three months exceeds 5,000 shares or
other units or has an aggregate sale price in excess of $50,000, three copies of a notice on
Form 144 (§ 239.144 of this chapter) shall be filed with the Commission.
(3) The Form 144 shall be signed by the person for whose account the
securities are to be sold and shall be transmitted for filing concurrently with either the
placing with a broker of an order to execute a sale of securities in reliance upon this rule
or the execution directly with a market maker of such a sale. Neither the filing of such
notice nor the failure of the Commission to comment on such notice shall be deemed to
preclude the Commission from taking any action that it deems necessary or appropriate with
respect to the sale of the securities referred to in such notice. The person filing the
notice required by this paragraph shall have a bona fide intention to sell the securities
referred to in the notice within a reasonable time after the filing of such notice.
(i) Unavailability to securities of issuers with no or nominal
operations and no or nominal non-cash assets. (1) This section is not available for
the resale of securities initially issued by an issuer defined below:
(i) An issuer, other than a business combination related shell company, as
defined in § 230.405, or an asset-backed issuer, as defined in Item 1101(b) of Regulation AB
(§ 229.1101(b) of this chapter), that has:
(A) No or nominal operations; and
(B) Either:
(1) No or nominal assets;
(2) Assets consisting solely of cash and cash equivalents; or
(3) Assets consisting of any amount of cash and cash equivalents
and nominal other assets; or
(ii) An issuer that has been at any time previously an issuer described in
paragraph (i)(1)(i).
(2) Notwithstanding paragraph (i)(1), if the issuer of the securities
previously had been an issuer described in paragraph (i)(1)(i) but has ceased to be an
issuer described in paragraph (i)(1)(i); is subject to the reporting requirements of section
13 or 15(d) of the Exchange Act; has filed all reports and other materials required to be
filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12
months (or for such shorter period that the issuer was required to file such reports and
materials), other than Form 8-K reports (§ 249.308 of this chapter); and has filed current
“Form 10 information” with the Commission reflecting its status as an entity that is no
longer an issuer described in paragraph (i)(1)(i), then those securities may be sold subject
to the requirements of this section after one year has elapsed from the date that the issuer
filed “Form 10 information” with the Commission.
(3) The term “Form 10 information” means the information that is required
by Form 10 or Form 20-F (§ 249.210 or § 249.220f of this chapter), as applicable to the
issuer of the securities, to register under the Exchange Act each class of securities being
sold under this rule. The issuer may provide the Form 10 information in any filing of the
issuer with the Commission. The Form 10 information is deemed filed when the initial filing
is made with the Commission.
[37 FR 596, Jan. 14, 1972; as amended at 83 FR 40846, Aug. 16, 2018; 85 FR
68124, Oct. 27, 2020; 87 FR 35393, June 10, 2022]
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Editorial Note:
For Federal Register citations
affecting § 230.144 see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and at www.fdsys.gov.
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230.144A — Private resales of securities to institutions.
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Preliminary Notes:
1. This section relates solely to the application of section 5
of the Act and not to antifraud or other provisions of the federal securities
laws.
2. Attempted compliance with this section does not act as an
exclusive election; any seller hereunder may also claim the availability of any
other applicable exemption from the registration requirements of the Act.
3. In view of the objective of this section and the policies
underlying the Act, this section is not available with respect to any
transaction or series of transactions that, although in technical compliance
with this section, is part of a plan or scheme to evade the registration
provisions of the Act. In such cases, registration under the Act is
required.
4. Nothing in this section obviates the need for any issuer or
any other person to comply with the securities registration or broker-dealer
registration requirements of the Securities Exchange Act of 1934 (the
Exchange Act), whenever such requirements are applicable.
5. Nothing in this section obviates the need for any person to
comply with any applicable state law relating to the offer or sale of
securities.
6. Securities acquired in a transaction made pursuant to the
provisions of this section are deemed to be restricted securities within
the meaning of § 230.144(a)(3) of this chapter.
7. The fact that purchasers of securities from the issuer
thereof may purchase such securities with a view to reselling such securities
pursuant to this section will not affect the availability to such issuer of an
exemption under section 4(a)(2) of the Act, or Regulation D under the Act, from
the registration requirements of the Act.
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(a) Definitions. (1) For purposes of this section, qualified
institutional buyer shall mean:
(i) Any of the following entities, acting for its own account or the
accounts of other qualified institutional buyers, that in the aggregate owns and invests on
a discretionary basis at least $100 million in securities of issuers that are not affiliated
with the entity:
(A) Any insurance company as defined in section 2(a)(13) of the
Act;
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Note:
A purchase by an insurance company for one or more of its
separate accounts, as defined by section 2(a)(37) of the Investment Company Act
of 1940 (the “Investment Company Act”), which are neither registered under
section 8 of the Investment Company Act nor required to be so registered, shall
be deemed to be a purchase for the account of such insurance company.
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(B) Any investment company registered under the Investment Company
Act or any business development company as defined in section 2(a)(48) of that
Act;
(C) Any Small Business Investment Company licensed by the U.S.
Small Business Administration under section 301(c) or (d) of the Small Business Investment
Act of 1958 or any Rural Business Investment Company as defined in section 384A of
the Consolidated Farm and Rural Development Act;
(D) Any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political subdivisions, for
the benefit of its employees;
(E) Any employee benefit plan within the meaning of title I of the
Employee Retirement Income Security Act of 1974;
(F) Any trust fund whose trustee is a bank or trust company and whose
participants are exclusively plans of the types identified in paragraph (a)(1)(i) (D) or (E)
of this section, except trust funds that include as participants individual retirement
accounts or H.R. 10 plans.
(G) Any business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
(H) Any organization described in section 501(c)(3) of the Internal
Revenue Code, corporation (other than a bank as defined in section 3(a)(2) of the Act or a
savings and loan association or other institution referenced in section 3(a)(5)(A) of the
Act or a foreign bank or savings and loan association or equivalent institution),
partnership, limited liability company, or Massachusetts or similar business trust;
(I) Any investment adviser registered under the Investment Advisers
Act; and
(J) Any institutional accredited investor, as defined in rule 501(a) under the Act (17 CFR
230.501(a)), of a type not listed in paragraphs (a)(1)(i)(A) through (I) or paragraphs
(a)(1)(ii) through (vi).
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Note 1 to paragraph (a)(1)(i)(J):
An entity seeking qualified institutional buyer status under Rule
144A(a)(1)(i)(J) may be formed for the purpose of acquiring the securities being
offered under this section.
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(ii) Any dealer registered pursuant to section 15 of the Exchange
Act, acting for its own account or the accounts of other qualified institutional buyers,
that in the aggregate owns and invests on a discretionary basis at least $10 million of
securities of issuers that are not affiliated with the dealer, Provided, That
securities constituting the whole or a part of an unsold allotment to or subscription by a
dealer as a participant in a public offering shall not be deemed to be owned by such
dealer;
(iii) Any dealer registered pursuant to section 15 of the Exchange
Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;
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Note:
A registered dealer may act as agent, on a non-discretionary
basis, in a transaction with a qualified institutional buyer without itself
having to be a qualified institutional buyer.
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(iv) Any investment company registered under the Investment Company Act,
acting for its own account or for the accounts of other qualified institutional buyers, that
is part of a family of investment companies which own in the aggregate at least $100 million
in securities of issuers, other than issuers that are affiliated with the investment company
or are part of such family of investment companies. Family of investment companies
means any two or more investment companies registered under the Investment Company Act,
except for a unit investment trust whose assets consist solely of shares of one or more
registered investment companies, that have the same investment adviser (or, in the case of
unit investment trusts, the same depositor), Provided That, for purposes of this
section:
(A) Each series of a series company (as defined in Rule 18f-2 under the
Investment Company Act [17 CFR 270.18f-2]) shall be deemed to be a separate investment
company; and
(B) Investment companies shall be deemed to have the same adviser (or
depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same
parent, or if one investment company's adviser (or depositor) is a majority-owned subsidiary
of the other investment company's adviser (or depositor);
(v) Any entity, all of the equity owners of which are qualified
institutional buyers, acting for its own account or the accounts of other qualified
institutional buyers; and
(vi) Any bank as defined in section 3(a)(2) of the Act, any savings
and loan association or other institution as referenced in section 3(a)(5)(A) of the Act, or
any foreign bank or savings and loan association or equivalent institution, acting for its
own account or the accounts of other qualified institutional buyers, that in the aggregate
owns and invests on a discretionary basis at least $100 million in securities of issuers
that are not affiliated with it and that has an audited net worth of at least $25 million as
demonstrated in its latest annual financial statements, as of a date not more than 16 months
preceding the date of sale under the Rule in the case of a U.S. bank or savings and loan
association, and not more than 18 months preceding such date of sale for a foreign bank or
savings and loan association or equivalent institution.
(2) In determining the aggregate amount of securities owned and invested
on a discretionary basis by an entity, the following instruments and interests shall be
excluded: bank deposit notes and certificates of deposit; loan participations; repurchase
agreements; securities owned but subject to a repurchase agreement; and currency, interest
rate and commodity swaps.
(3) The aggregate value of securities owned and invested on a
discretionary basis by an entity shall be the cost of such securities, except where the
entity reports its securities holdings in its financial statements on the basis of their
market value, and no current information with respect to the cost of those securities has
been published. In the latter event, the securities may be valued at market for purposes of
this section.
(4) In determining the aggregate amount of securities owned by an entity
and invested on a discretionary basis, securities owned by subsidiaries of the entity that
are consolidated with the entity in its financial statements prepared in accordance with
generally accepted accounting principles may be included if the investments of such
subsidiaries are managed under the direction of the entity, except that, unless the entity
is a reporting company under section 13 or 15(d) of the Exchange Act, securities owned by
such subsidiaries may not be included if the entity itself is a majority-owned subsidiary
that would be included in the consolidated financial statements of another enterprise.
(5) For purposes of this section, riskless principal transaction
means a transaction in which a dealer buys a security from any person and makes a
simultaneous offsetting sale of such security to a qualified institutional buyer, including
another dealer acting as riskless principal for a qualified institutional buyer.
(6) For purposes of this section, effective conversion premium
means the amount, expressed as a percentage of the security's conversion value, by which the
price at issuance of a convertible security exceeds its conversion value.
(7) For purposes of this section, effective exercise premium means
the amount, expressed as a percentage of the warrant's exercise value, by which the sum of
the price at issuance and the exercise price of a warrant exceeds its exercise value.
(b) Sales by persons other than issuers or dealers. Any person,
other than the issuer or a dealer, who offers or sells securities in compliance with the
conditions set forth in paragraph (d) of this section shall be deemed not to be engaged in a
distribution of such securities and therefore not to be an underwriter of such securities
within the meaning of sections 2(a)(11) and 4(a)(1) of the Act.
(c) Sales by dealers. Any dealer who offers or sells securities in
compliance with the conditions set forth in paragraph (d) of this section shall be deemed
not to be a participant in a distribution of such securities within the meaning of section
4(a)(3)(C) of the Act and not to be an underwriter of such securities within the meaning of
section 2(a)(11) of the Act, and such securities shall be deemed not to have been offered to
the public within the meaning of section 4(a)(3)(A) of the Act.
(d) Conditions to be met. To qualify for exemption under this
section, an offer or sale must meet the following conditions:
(1) The securities are sold only to a qualified institutional buyer or to
a purchaser that the seller and any person acting on behalf of the seller reasonably believe
is a qualified institutional buyer. In determining whether a prospective purchaser is a
qualified institutional buyer, the seller and any person acting on its behalf shall be
entitled to rely upon the following non-exclusive methods of establishing the prospective
purchaser's ownership and discretionary investments of securities:
(i) The prospective purchaser's most recent publicly available financial
statements, Provided That such statements present the information as of a date within
16 months preceding the date of sale of securities under this section in the case of a U.S.
purchaser and within 18 months preceding such date of sale for a foreign purchaser;
(ii) The most recent publicly available information appearing in documents
filed by the prospective purchaser with the Commission or another United States federal,
state, or local governmental agency or self-regulatory organization, or with a foreign
governmental agency or self-regulatory organization, Provided That any such
information is as of a date within 16 months preceding the date of sale of securities under
this section in the case of a U.S. purchaser and within 18 months preceding such date of
sale for a foreign purchaser;
(iii) The most recent publicly available information appearing in a
recognized securities manual, Provided That such information is as of a date within
16 months preceding the date of sale of securities under this section in the case of a U.S.
purchaser and within 18 months preceding such date of sale for a foreign purchaser; or
(iv) A certification by the chief financial officer, a person fulfilling
an equivalent function, or other executive officer of the purchaser, specifying the amount
of securities owned and invested on a discretionary basis by the purchaser as of a specific
date on or since the close of the purchaser's most recent fiscal year, or, in the case of a
purchaser that is a member of a family of investment companies, a certification by an
executive officer of the investment adviser specifying the amount of securities owned by the
family of investment companies as of a specific date on or since the close of the
purchaser's most recent fiscal year;
(2) The seller and any person acting on its behalf takes reasonable steps
to ensure that the purchaser is aware that the seller may rely on the exemption from the
provisions of section 5 of the Act provided by this section;
(3) The securities offered or sold:
(i) Were not, when issued, of the same class as securities listed on a
national securities exchange registered under section 6 of the Exchange Act or quoted in a
U.S. automated inter-dealer quotation system; Provided, That securities that are
convertible or exchangeable into securities so listed or quoted at the time of issuance and
that had an effective conversion premium of less than 10 percent, shall be treated as
securities of the class into which they are convertible or exchangeable; and that warrants
that may be exercised for securities so listed or quoted at the time of issuance, for a
period of less than 3 years from the date of issuance, or that had an effective exercise
premium of less than 10 percent, shall be treated as securities of the class to be issued
upon exercise; and Provided further, That the Commission may from time to time,
taking into account then-existing market practices, designate additional securities and
classes of securities that will not be deemed of the same class as securities listed on a
national securities exchange or quoted in a U.S. automated inter-dealer quotation system;
and
(ii) Are not securities of an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered under
section 8 of the Investment Company Act; and
(4)(i) In the case of securities of an issuer that is neither subject to
section 13 or 15(d) of the Exchange Act, nor exempt from reporting pursuant to Rule
12g3-2(b) (§ 240.12g3-2(b) of this chapter) under the Exchange Act, nor a foreign government
as defined in Rule 405 (§ 230.405 of this chapter) eligible to register securities under
Schedule B of the Act, the holder and a prospective purchaser designated by the holder have
the right to obtain from the issuer, upon request of the holder, and the prospective
purchaser has received from the issuer, the seller, or a person acting on either of their
behalf, at or prior to the time of sale, upon such prospective purchaser's request to the
holder or the issuer, the following information (which shall be reasonably current in
relation to the date of resale under this section): a very brief statement of the nature of
the business of the issuer and the products and services it offers; and the issuer's most
recent balance sheet and profit and loss and retained earnings statements, and similar
financial statements for such part of the two preceding fiscal years as the issuer has been
in operation (the financial statements should be audited to the extent reasonably
available).
(ii) The requirement that the information be reasonably current
will be presumed to be satisfied if:
(A) The balance sheet is as of a date less than 16 months before the date
of resale, the statements of profit and loss and retained earnings are for the 12 months
preceding the date of such balance sheet, and if such balance sheet is not as of a date less
than 6 months before the date of resale, it shall be accompanied by additional statements of
profit and loss and retained earnings for the period from the date of such balance sheet to
a date less than 6 months before the date of resale; and
(B) The statement of the nature of the issuer's business and its products
and services offered is as of a date within 12 months prior to the date of resale; or
(C) With regard to foreign private issuers, the required information meets
the timing requirements of the issuer's home country or principal trading markets.
(e) Offers and sales of securities pursuant to this section shall be
deemed not to affect the availability of any exemption or safe harbor relating to any
previous or subsequent offer or sale of such securities by the issuer or any prior or
subsequent holder thereof.
[55 FR 17945, Apr. 30, 1990, as amended at 57 FR 48722, Oct. 28, 1992, 78
FR 44771, Jul 24, 2013; 85 FR 64234, Oct. 9, 2020]
230.145 — Reclassification of securities, mergers, consolidations and acquisitions of assets.
|
Preliminary Note:
Rule 145 (§ 230.145 of this chapter) is designed to make
available the protection provided by registration under the Securities Act of
1933, as amended (Act), to persons who are offered securities in a business
combination of the type described in paragraphs (a) (1), (2) and (3) of the
rule. The thrust of the rule is that an offer, offer to sell, offer for
sale, or sale occurs when there is submitted to security holders a
plan or agreement pursuant to which such holders are required to elect, on the
basis of what is in substance a new investment decision, whether to accept a new
or different security in exchange for their existing security. Rule 145 embodies
the Commission's determination that such transactions are subject to the
registration requirements of the Act, and that the previously existing
no-sale theory of Rule 133 is no longer consistent with the statutory
purposes of the Act. See Release No. 33-5316 (October 6, 1972) [37 FR
23631]. Securities issued in transactions described in paragraph (a) of Rule 145
may be registered on Form S-4 or F-4 (§ 239.25 or § 239.34 of this chapter) or
Form N-14 (§ 239.23 of this chapter) under the Act.
|
Transactions for which statutory exemptions under the Act, including those
contained in sections 3(a)(9), (10), (11) and 4(a)(2), are otherwise available are not
affected by Rule 145.
Reference is made to Rule 153a (§ 230.153a of this chapter) describing the
prospectus delivery required in a transaction of the type referred to in Rule 145.
A reclassification of securities covered by Rule 145 would be exempt from
registration pursuant to section 3(a)(9) or (11) of the Act if the conditions of either of
these sections are satisfied.
(a) Transactions within this section. An offer, offer to sell,
offer for sale, or sale shall be deemed to be involved, within the meaning of
section 2(3) of the Act, so far as the security holders of a corporation or other person are
concerned where, pursuant to statutory provisions of the jurisdiction under which such
corporation or other person is organized, or pursuant to provisions contained in its
certificate of incorporation or similar controlling instruments, or otherwise, there is
submitted for the vote or consent of such security holders a plan or agreement for:
(1) Reclassifications. A reclassification of securities of such
corporation or other person, other than a stock split, reverse stock split, or change in par
value, which involves the substitution of a security for another security;
(2) Mergers of consolidations. A statutory merger or consolidation
or similar plan or acquisition in which securities of such corporation or other person held
by such security holders will become or be exchanged for securities of any person, unless
the sole purpose of the transaction is to change an issuer's domicile solely within the
United States; or
(3) Transfers of assets. A transfer of assets of such corporation
or other person, to another person in consideration of the issuance of securities of such
other person or any of its affiliates, if:
(i) Such plan or agreement provides for dissolution of the corporation or
other person whose security holders are voting or consenting; or
(ii) Such plan or agreement provides for a pro rata or similar
distribution of such securities to the security holders voting or consenting; or
(iii) The board of directors or similar representatives of such
corporation or other person, adopts resolutions relative to paragraph (a)(3) (i) or (ii) of
this section within 1 year after the taking of such vote or consent; or
(iv) The transfer of assets is a part of a preexisting plan for
distribution of such securities, notwithstanding paragraph (a)(3) (i), (ii), or (iii) of
this section.
(b) Communications before a Registration Statement is filed.
Communications made in connection with or relating to a transaction described in paragraph
(a) of this section that will be registered under the Act may be made under § 230.135, §
230.165 or § 230.166.
(c) Persons and parties deemed to be underwriters. For purposes of
this section, if any party to a transaction specified in paragraph (a) of this section is a
shell company, other than a business combination related shell company, as those terms are
defined in § 230.405, any party to that transaction, other than the issuer, or any person
who is an affiliate of such party at the time such transaction is submitted for vote or
consent, who publicly offers or sells securities of the issuer acquired in connection with
any such transaction, shall be deemed to be engaged in a distribution and therefore to be an
underwriter thereof within the meaning of Section 2(a)(11) of the Act.
(d) Resale provisions for persons and parties deemed underwriters.
Notwithstanding the provisions of paragraph (c), a person or party specified in that
paragraph shall not be deemed to be engaged in a distribution and therefore not to be an
underwriter of securities acquired in a transaction specified in paragraph (a) that was
registered under the Act if:
(1) The issuer has met the requirements applicable to an issuer of
securities in paragraph (i)(2) of § 230.144; and
(2) One of the following three conditions is met:
(i) Such securities are sold by such person or party in accordance with
the provisions of paragraphs (c), (e), (f), and (g) of § 230.144 and at least 90 days have
elapsed since the date the securities were acquired from the issuer in such transaction;
or
(ii) Such person or party is not, and has not been for at least three
months, an affiliate of the issuer, and at least six months, as determined in accordance
with paragraph (d) of § 230.144, have elapsed since the date the securities were acquired
from the issuer in such transaction, and the issuer meets the requirements of paragraph (c)
of § 230.144; or
(iii) Such person or party is not, and has not been for at least three
months, an affiliate of the issuer, and at least one year, as determined in accordance with
paragraph (d) of § 230.144, has elapsed since the date the securities were acquired from the
issuer in such transaction.
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Note to § 230.145(c) and (d):
Paragraph (d) is not available with respect to any transaction
or series of transactions that, although in technical compliance with the rule,
is part of a plan or scheme to evade the registration requirements of the
Act.
|
(e) Definitions. (1) The term affiliate as used in
paragraphs (c) and (d) of this section shall have the same meaning as the definition of that
term in § 230.144.
(2) The term party as used in paragraphs (c) and (d) of this
section shall mean the corporations, business entities, or other persons, other than the
issuer, whose assets or capital structure are affected by the transactions specified in
paragraph (a) of this section.
(3) The term person as used in paragraphs (c) and (d) of this
section, when used in reference to a person for whose account securities are to be sold,
shall have the same meaning as the definition of that term in paragraph (a)(2) of §
230.144.
[37 FR 23636, Nov. 7, 1972, as amended at 49 FR
5921, Feb. 16, 1984; 50 FR 19016, May 6, 1985; 50 FR 48382, Nov. 25, 1985; 55 FR 17944,
Apr. 30, 1990; 62 FR 9245, Feb. 28, 1997; 64 FR 61449, Nov. 10, 1999; 72 FR 71570, Dec.
17, 2007, 78 FR 44729, Jul 24, 2013 ]
230.145a — Business combinations with reporting shell companies.
With respect to a reporting shell company's shareholders, any direct or indirect business
combination of a reporting shell company that is not a business combination related shell
company involving another entity that is not a shell company, as those terms are defined
in § 230.405, is deemed to involve an offer, offer to sell, offer for sale, or sale within
the meaning of section 2(a)(3) of the Act. For purposes of this section, a reporting shell
company is a company other than an asset-backed issuer as defined in § 229.1101(b) of this
chapter (Item 1101(b) of Regulation AB), that has:
(a) No or nominal operations;
(b) Either:
(1) No or nominal assets;
(2) Assets consisting solely of cash and cash equivalents; or
(3) Assets consisting of any amount of cash and cash equivalents and nominal other
assets; and
(c) An obligation to file reports under section 13 (15 U.S.C. 78m) or
section 15(d) (15 U.S.C. 78o(d)) of the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.).
[89 FR 14158, Feb. 26, 2024]
230.146 — Rules under section 18 of the Act.
(a) Prepared by or on behalf of the issuer. An offering document
(as defined in Section 18(d)(1) of the Act [15 U.S.C. 77r(d)(1)]) is “prepared by or on
behalf of the issuer” for purposes of Section 18 of the Act, if the issuer or an agent or
representative:
(1) Authorizes the document's production, and
(2) Approves the document before its use.
(b) Covered securities for purposes of Section 18. (1) For purposes
of Section 18(b) of the Act (15 U.S.C. 77r), the Commission finds that the following
national securities exchanges, or segments or tiers thereof, have listing standards that are
substantially similar to those of the New York Stock Exchange (“NYSE”), the NYSE American
LLC (“NYSE American”), or the National Market System of the Nasdaq Stock Market
(“Nasdaq/NGM”), and that securities listed, or authorized for listing, on such exchanges
shall be deemed covered securities:
(i) Tier I of the NYSE Arca, Inc.;
(ii) Tier I of the NASDAQ PHLX LLC;
(iii) The Chicago Board Options Exchange, Incorporated;
(iv) Options listed on Nasdaq ISE, LLC;
(v) The Nasdaq Capital Market;
(vi) Tier I and Tier II of Bats BZX Exchange, Inc.; and
(vii) Investors Exchange LLC.
(2) The designation of securities in paragraphs (b)(1)(i) through (vii) of
this section as covered securities is conditioned on such exchanges' listing standards (or
segments or tiers thereof) continuing to be substantially similar to those of the NYSE, NYSE
American, or Nasdaq/NGM.
[62 FR 24573, May 6, 1997, as amended at 63 FR
3035, Jan. 21, 1998; 69 FR 43298, July 20, 2004; 72 FR 20414, Apr. 24, 2007; 77 FR 3597,
Jan. 25, 2012; 82 FR 50059, Oct. 30, 2017]
230.147 — Intrastate offers and sales.
(a) This section shall not raise any presumption that the exemption
provided by section 3(a)(11) of the Act (15 U.S.C. 77c(a)(11)) is not available for
transactions by an issuer which do not satisfy all of the provisions of this section.
(b) Manner of offers and sales. An issuer, or any person acting on
behalf of the issuer, shall be deemed to conduct an offering in compliance with section
3(a)(11) of the Act (15 U.S.C. 77c(a)(11)), where offers and sales are made only to persons
resident within the same state or territory in which the issuer is resident and doing
business, within the meaning of section 3(a)(11) of the Act, so long as the issuer complies
with the provisions of paragraphs (c), (d), and (f) through (h) of this section.
(c) Nature of the issuer. The issuer of the securities shall at
the time of any offers and sales be a person resident and doing business within the state or
territory in which all of the offers and sales are made.
(1) The issuer shall be deemed to be a resident of the state or territory
in which:
(i) It is incorporated or organized, and it has its principal place of
business, if a corporation, limited partnership, trust or other form of business
organization that is organized under state or territorial law. The issuer shall be deemed to
have its principal place of business in a state or territory in which the officers, partners
or managers of the issuer primarily direct, control and coordinate the activities of the
issuer;
(ii) It has its principal place of business, as defined in paragraph
(c)(1)(i) of this section, if a general partnership or other form of business organization
that is not organized under any state or territorial law;
(iii) Such person's principal residence is located, if an individual.
Instruction to paragraph (c)(1): An issuer that has previously
conducted an intrastate offering pursuant to this section (§ 230.147) or Rule 147A
(§ 230.147A) may not conduct another intrastate offering pursuant to this section
(§ 230.147) in a different state or territory, until the expiration of the time period
specified in paragraph (e) of this section (§ 230.147(e)) or paragraph (e) of Rule 147A
(§ 230.147A(e)), calculated on the basis of the date of the last sale in such offering.
(2) The issuer shall be deemed to be doing business within a state or
territory if the issuer satisfies at least one of the following requirements:
(i) The issuer derived at least 80% of its consolidated gross revenues
from the operation of a business or of real property located in or from the rendering of
services within such state or territory;
Instruction to paragraph (c)(2)(i): Revenues must be calculated
based on the issuer's most recent fiscal year, if the first offer of securities pursuant to
this section is made during the first six months of the issuer's current fiscal year, and
based on the first six months of the issuer's current fiscal year or during the twelve-month
fiscal period ending with such six-month period, if the first offer of securities pursuant
to this section is made during the last six months of the issuer's current fiscal year.
(ii) The issuer had at the end of its most recent semi-annual fiscal
period prior to an initial offer of securities in any offering or subsequent offering
pursuant to this section, at least 80% of its assets and those of its subsidiaries on a
consolidated basis located within such state or territory;
(iii) The issuer intends to use and uses at least 80% of the net proceeds
to the issuer from sales made pursuant to this section (§ 230.147) in connection with the
operation of a business or of real property, the purchase of real property located in, or
the rendering of services within such state or territory; or
(iv) A majority of the issuer's employees are based in such state or
territory.
(d) Residence of offerees and purchasers. Offers and sales of
securities pursuant to this section (§ 230.147) shall be made only to residents of the state
or territory in which the issuer is resident, as determined pursuant to paragraph (c) of
this section, or who the issuer reasonably believes, at the time of the offer and sale, are
residents of the state or territory in which the issuer is resident. For purposes of
determining the residence of offerees and purchasers:
(1) A corporation, partnership, limited liability company, trust or other
form of business organization shall be deemed to be a resident of a state or territory if,
at the time of the offer and sale to it, it has its principal place of business, as defined
in paragraph (c)(1)(i) of this section, within such state or territory.
Instruction to paragraph (d)(1): A trust that is not deemed by the law of the state
or territory of its creation to be a separate legal entity is deemed to be a resident of
each state or territory in which its trustee is, or trustees are, resident.
(2) Individuals shall be deemed to be residents of a state or territory
if such individuals have, at the time of the offer and sale to them, their principal
residence in the state or territory.
(3) A corporation, partnership, trust or other form of business
organization, which is organized for the specific purpose of acquiring securities offered
pursuant to this section (§ 230.147), shall not be a resident of a state or territory unless
all of the beneficial owners of such organization are residents of such state or territory.
Instruction to paragraph (d): Obtaining a written representation
from purchasers of in-state residency status will not, without more, be sufficient to
establish a reasonable belief that such purchasers are in-state residents.
(e) Limitation on resales. For a period of six months from the
date of the sale by the issuer of a security pursuant to this section (§ 230.147), any
resale of such security shall be made only to persons resident within the state or territory
in which the issuer was resident, as determined pursuant to paragraph (c) of this section,
at the time of the sale of the security by the issuer.
Instruction to paragraph (e): In the case of convertible
securities, resales of either the convertible security, or if it is converted, the
underlying security, could be made during the period described in paragraph (e) only to
persons resident within such state or territory. For purposes of this paragraph (e), a
conversion in reliance on section 3(a)(9) of the Act (15 U.S.C. 77c(a)(9)) does not begin a
new period.
(f) Precautions against interstate sales. (1) The issuer shall, in
connection with any securities sold by it pursuant to this section:
(i) Place a prominent legend on the certificate or other document
evidencing the security stating that: “Offers and sales of these securities were made under
an exemption from registration and have not been registered under the Securities Act of
1933. For a period of six months from the date of the sale by the issuer of these
securities, any resale of these securities (or the underlying securities in the case of
convertible securities) shall be made only to persons resident within the state or territory
of [identify the name of the state or territory in which the issuer was resident at the time
of the sale of the securities by the issuer].”;
(ii) Issue stop transfer instructions to the issuer's transfer agent, if
any, with respect to the securities, or, if the issuer transfers its own securities, make a
notation in the appropriate records of the issuer; and
(iii) Obtain a written representation from each purchaser as to his or
her residence.
(2) The issuer shall, in connection with the issuance of new certificates
for any of the securities that are sold pursuant to this section (§ 230.147) that are
presented for transfer during the time period specified in paragraph (e), take the steps
required by paragraphs (f)(1)(i) and (ii) of this section.
(3) The issuer shall, at the time of any offer or sale by it of a security
pursuant to this section (§ 230.147), prominently disclose to each offeree in the manner in
which any such offer is communicated and to each purchaser of such security in writing a
reasonable period of time before the date of sale, the following: “Sales will be made only
to residents of [identify the name of the state or territory in which the issuer was
resident at the time of the sale of the securities by the issuer]. Offers and sales of these
securities are made under an exemption from registration and have not been registered under
the Securities Act of 1933. For a period of six months from the date of the sale by the
issuer of the securities, any resale of the securities (or the underlying securities in the
case of convertible securities) shall be made only to persons resident within the state or
territory of [identify the name of the state or territory in which the issuer was resident
at the time of the sale of the securities by the issuer].”
(g) Integration with other offerings. To determine whether offers
and sales should be integrated, refer to § 230.152.
[81 FR 83550, Nov. 21, 2016, as amended at 86 FR 3594, Jan. 14,
2021]
230.147A — Intrastate sales exemption.
(a) Scope of the exemption. Offers and sales by or on behalf of
an issuer of its securities made in accordance with this section (§ 230.147A) are exempt
from section 5 of the Act (15 U.S.C. 77e). This exemption is not available to an issuer
that is an investment company registered or required to be registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.).
(b) Manner of offers and sales. An issuer, or any person acting
on behalf of the issuer, may rely on this exemption to make offers and sales using any
form of general solicitation and general advertising, so long as the issuer complies with
the provisions of paragraphs (c), (d), and (f) through (h) of this section.
(c) Nature of the issuer. The issuer of the securities shall at
the time of any offers and sales be a person resident and doing business within the state
or territory in which all of the sales are made.
(1) The issuer shall be deemed to be a resident of the state or
territory in which it has its principal place of business. The issuer shall be deemed to
have its principal place of business in a state or territory in which the officers,
partners or managers of the issuer primarily direct, control and coordinate the activities
of the issuer.
(2) The issuer shall be deemed to be doing business within a state or
territory if the issuer satisfies at least one of the following requirements:
(i) The issuer derived at least 80% of its consolidated gross revenues
from the operation of a business or of real property located in or from the rendering of
services within such state or territory;
Instruction to paragraph (c)(2)(i): Revenues must be calculated
based on the issuer's most recent fiscal year, if the first offer of securities pursuant
to this section is made during the first six months of the issuer's current fiscal year,
and based on the first six months of the issuer's current fiscal year or during the
twelve-month fiscal period ending with such six-month period, if the first offer of
securities pursuant to this section is made during the last six months of the issuer's
current fiscal year.
(ii) The issuer had at the end of its most recent semi-annual fiscal
period prior to an initial offer of securities in any offering or subsequent offering
pursuant to this section, at least 80% of its assets and those of its subsidiaries on a
consolidated basis located within such state or territory;
(iii) The issuer intends to use and uses at least 80% of the net
proceeds to the issuer from sales made pursuant to this section (§ 230.147A) in connection
with the operation of a business or of real property, the purchase of real property
located in, or the rendering of services within such state or territory; or
(iv) A majority of the issuer's employees are based in such state or
territory.
Instruction to paragraph (c): An issuer that has previously
conducted an intrastate offering pursuant to this section (§ 230.147A) or Rule 147
(§ 230.147) may not conduct another intrastate offering pursuant to this section
(§ 230.147A) in a different state or territory, until the expiration of the time period
specified in paragraph (e) of this section (§ 230.147A(e)) or paragraph (e) of Rule 147
(§ 230.147(e)), calculated on the basis of the date of the last sale in such offering.
(d) Residence of purchasers. Sales of securities pursuant to
this section (§ 230.147A) shall be made only to residents of the state or territory in
which the issuer is resident, as determined pursuant to paragraph (c) of this section, or
who the issuer reasonably believes, at the time of sale, are residents of the state or
territory in which the issuer is resident. For purposes of determining the residence of
purchasers:
(1) A corporation, partnership, limited liability company, trust or
other form of business organization shall be deemed to be a resident of a state or
territory if, at the time of sale to it, it has its principal place of business, as
defined in paragraph (c)(1) of this section, within such state or territory.
Instruction to paragraph (d)(1): A trust that is not deemed by
the law of the state or territory of its creation to be a separate legal entity is deemed
to be a resident of each state or territory in which its trustee is, or trustees are,
resident.
(2) Individuals shall be deemed to be residents of a state or territory
if such individuals have, at the time of sale to them, their principal residence in the
state or territory.
(3) A corporation, partnership, trust or other form of business
organization, which is organized for the specific purpose of acquiring securities offered
pursuant to this section (§ 230.147A), shall not be a resident of a state or territory
unless all of the beneficial owners of such organization are residents of such state or
territory.
Instruction to paragraph (d): Obtaining a written representation
from purchasers of in-state residency status will not, without more, be sufficient to
establish a reasonable belief that such purchasers are in-state residents.
(e) Limitation on resales. For a period of six months from the
date of the sale by the issuer of a security pursuant to this section (§ 230.147A), any
resale of such security shall be made only to persons resident within the state or
territory in which the issuer was resident, as determined pursuant to paragraph (c) of
this section, at the time of the sale of the security by the issuer.
Instruction to paragraph (e): In the case of convertible
securities, resales of either the convertible security, or if it is converted, the
underlying security, could be made during the period described in paragraph (e) only to
persons resident within such state or territory. For purposes of this paragraph (e), a
conversion in reliance on section 3(a)(9) of the Act (15 U.S.C. 77c(a)(9)) does not begin
a new period.
(f) Precautions against interstate sales. (1) The issuer shall,
in connection with any securities sold by it pursuant to this section:
(i) Place a prominent legend on the certificate or other document
evidencing the security stating that: “Offers and sales of these securities were made
under an exemption from registration and have not been registered under the Securities Act
of 1933. For a period of six months from the date of the sale by the issuer of these
securities, any resale of these securities (or the underlying securities in the case of
convertible securities) shall be made only to persons resident within the state or
territory of [identify the name of the state or territory in which the issuer was resident
at the time of the sale of the securities by the issuer].”;
(ii) Issue stop transfer instructions to the issuer's transfer agent,
if any, with respect to the securities, or, if the issuer transfers its own securities,
make a notation in the appropriate records of the issuer; and
(iii) Obtain a written representation from each purchaser as to his or
her residence.
(2) The issuer shall, in connection with the issuance of new
certificates for any of the securities that are sold pursuant to this section (§ 230.147A)
that are presented for transfer during the time period specified in paragraph (e), take
the steps required by paragraphs (f)(1)(i) and (ii) of this section.
(3) The issuer shall, at the time of any offer or sale by it of a
security pursuant to this section (§ 230.147A), prominently disclose to each offeree in
the manner in which any such offer is communicated and to each purchaser of such security
in writing a reasonable period of time before the date of sale, the following: “Sales will
be made only to residents of the state or territory of [identify the name of the state or
territory in which the issuer was resident at the time of the sale of the securities by
the issuer]. Offers and sales of these securities are made under an exemption from
registration and have not been registered under the Securities Act of 1933. For a period
of six months from the date of the sale by the issuer of the securities, any resale of the
securities (or the underlying securities in the case of convertible securities) shall be
made only to persons resident within the state or territory of [identify the name of the
state or territory in which the issuer was resident at the time of the sale of the
securities by the issuer].”
(g) Integration with other offerings. To determine whether offers
and sales should be integrated, refer to §230.152.
[81 FR 83551, Nov. 21, 2016, as amended at 86 FR 3594, Jan. 14, 2021]
230.148 — Exemption from general solicitation or general advertising.
(a) A communication will not be deemed to constitute general solicitation or general
advertising if made in connection with a seminar or meeting in which more than one issuer
participates that is sponsored by a college, university, or other institution of higher
education, State or local government or instrumentality thereof, nonprofit organization,
or angel investor group, incubator, or accelerator, provided that:
(1) No advertising for the seminar or meeting references a specific offering of
securities by the issuer;
(2) The sponsor of the seminar or meeting does not:
(i) Make investment recommendations or provide investment advice to attendees of the
event;
(ii) Engage in any investment negotiations between the issuer and investors attending the
event;
(iii) Charge attendees of the event any fees, other than reasonable administrative
fees;
(iv) Receive any compensation for making introductions between event attendees and
issuers or for investment negotiations between such parties; and
(v) Receive any compensation with respect to the event that would
require registration of the sponsor as a broker or a dealer under the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.) or an investment adviser under the Investment
Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.);
(3) The type of information regarding an offering of securities by the issuer that is
communicated or distributed by or on behalf of the issuer in connection with the event is
limited to a notification that the issuer is in the process of offering or planning to
offer securities, the type and amount of securities being offered, the intended use of
proceeds of the offering, and the unsubscribed amount in an offering; and
(4) If the event allows attendees to participate virtually, rather than in person, online
participation in the event is limited to:
(i) Individuals who are members of, or otherwise associated with the sponsor
organization;
(ii) Individuals that the sponsor reasonably believes are accredited investors; or
(iii) Individuals who have been invited to the event by the sponsor based on industry or
investment-related experience reasonably selected by the sponsor in good faith and
disclosed in the public communications about the event.
(5) For purposes of this paragraph, the term “angel investor group” means a group of
accredited investors that holds regular meetings and has defined processes and procedures
for making investment decisions, either individually or among the membership of the group
as a whole, and is neither associated nor affiliated with brokers, dealers, or investment
advisers.
(b) [Reserved]
[86 FR 3496, Jan. 14, 2021]
230.149 — Definition of “exchanged” in section 3(a)(9), for certain transactions.
The term exchanged in section 3(a)(9) (sec. 202(c), 48 Stat. 906;
15 U.S.C. 77c(9)) shall be deemed to include the issuance of a security in consideration of
the surrender, by the existing security holders of the issuer, of outstanding securities of
the issuer, notwithstanding the fact that the surrender of the outstanding securities may be
required by the terms of the plans of exchange to be accompanied by such payment in cash by
the security holder as may be necessary to effect an equitable adjustment, in respect of
dividends or interest paid or payable on the securities involved in the exchange, as between
such security holder and other security holders of the same class accepting the offer of
exchange.
[2 FR 1382, July 7, 1937]
230.150 — Definition of “commission or other remuneration” in section 3(a)(9), for certain transactions.
The term commission or other remuneration in section 3(a)(9) of the
Act shall not include payments made by the issuer, directly or indirectly, to its security
holders in connection with an exchange of securities for outstanding securities, when such
payments are part of the terms of the offer of exchange.
[2 FR 1076, May 26, 1937]
230.151 — Safe harbor definition of certain “annuity contracts or optional annuity contracts” within the meaning of section 3(a)(8).
(a) Any annuity contract or optional annuity contract (a contract)
shall be deemed to be within the provisions of section 3(a)(8) of the Securities Act of 1933
(15 U.S.C. 77c(a)(8)), Provided, That
(1) The annuity or optional annuity contract is issued by a corporation
(the insurer) subject to the supervision of the insurance commissioner, bank
commissioner, or any agency or officer performing like functions, of any State or Territory
of the United States or the District of Columbia;
(2) The insurer assumes the investment risk under the contract as
prescribed in paragraph (b) of this section; and
(3) The contract is not marketed primarily as an investment.
(b) The insurer shall be deemed to assume the investment risk under the
contract if:
(1) The value of the contract does not vary according to the investment
experience of a separate account;
(2) The insurer for the life of the contract
(i) Guarantees the principal amount of purchase payments and interest
credited thereto, less any deduction (without regard to its timing) for sales,
administrative or other expenses or charges; and
(ii) Credits a specified rate of interest (as defined in paragraph (c) of
this section to net purchase payments and interest credited thereto; and
(3) The insurer guarantees that the rate of any interest to be credited in
excess of that described in paragraph (b)(2)(ii) of this section will not be modifed more
frequently than once per year.
(c) The term specified rate of interest, as used in paragraph
(b)(2)(ii) of this section, means a rate of interest under the contract that is at least
equal to the minimum rate required to be credited by the relevant nonforfeiture law in the
jurisdiction in which the contract is issued. If that jurisdiction does not have any
applicable nonforfeiture law at the time the contract is issued (or if the minimum rate
applicable to an existing contract is no longer mandated in that jurisdiction), the
specified rate under the contract must at least be equal to the minimum rate then required
for individual annuity contracts by the NAIC Standard Nonforfeiture Law.
[51 FR 20262, June 4, 1986]
230.152 — Integration.
This section provides a general principle of integration and non-exclusive safe
harbors from integration of registered and exempt offerings. Because of the objectives of
this section and the policies underlying the Act, the provisions of this section will not
have the effect of avoiding integration for any transaction or series of transactions that,
although in technical compliance with the section, is part of a plan or scheme to evade the
registration requirements of the Act.
(a) General principle of integration. If the safe harbors in paragraph
(b) of this section do not apply, in determining whether two or more offerings are to be
treated as one for the purpose of registration or qualifying for an exemption from
registration under the Act, offers and sales will not be integrated if, based on the
particular facts and circumstances, the issuer can establish that each offering either
complies with the registration requirements of the Act, or that an exemption from
registration is available for the particular offering. In making this determination:
(1) For an exempt offering prohibiting general solicitation, the issuer must
have a reasonable belief, based on the facts and circumstances, with respect to each
purchaser in the exempt offering prohibiting general solicitation, that the issuer (or any
person acting on the issuer's behalf) either:
(i) Did not solicit such purchaser through the use of general solicitation;
or
(ii) Established a substantive relationship with such purchaser prior to the
commencement of the exempt offering prohibiting general solicitation; and
(2) For two or more concurrent exempt offerings permitting general
solicitation, in addition to satisfying the requirements of the particular exemption relied
on, general solicitation offering materials for one offering that includes information about
the material terms of a concurrent offering under another exemption may constitute an offer
of securities in such other offering, and therefore the offer must comply with all the
requirements for, and restrictions on, offers under the exemption being relied on for such
other offering, including any legend requirements and communications restrictions.
(b) Safe harbors. No integration analysis under paragraph (a) of this
section is required, if any of the following non-exclusive safe harbors apply:
(1) Any offering made more than 30 calendar days before the commencement of any
other offering, or more than 30 calendar days after the termination or completion of any
other offering, will not be integrated with such other offering, provided that for an
exempt offering for which general solicitation is not permitted that follows by 30 calendar
days or more an offering that allows general solicitation, the provisions of § 230.152(a)(1)
shall apply.
(2) Offers and sales made in compliance with § 230.701, pursuant to an employee
benefit plan, or in compliance with §§ 230.901 through 230.905 (Regulation S) will not be
integrated with other offerings;
(3) An offering for which a registration statement under the Act has been filed
will not be integrated if it is made subsequent to:
(i) A terminated or completed offering for which general solicitation is not
permitted;
(ii) A terminated or completed offering for which general solicitation is
permitted made only to qualified institutional buyers and institutional accredited
investors; or
(iii) An offering for which general solicitation is permitted that terminated
or completed more than 30 calendar days prior to the commencement of the registered
offering; or
(4) Offers and sales made in reliance on an exemption for which general
solicitation is permitted will not be integrated if made subsequent to any terminated or
completed offering.
(c) Commencement of an offering. For purposes of this section, an
offering of securities will be deemed to be commenced at the time of the first offer of
securities in the offering by the issuer or its agents. The following non-exclusive list of
factors should be considered in determining when an offering is deemed to be commenced.
Pursuant to the requirements for registered and exempt offerings, an issuer or its agents
may commence an offering in reliance on:
(1) Section 230.241, on the date the issuer first made a generic offer
soliciting interest in a contemplated securities offering for which the issuer had not yet
determined the exemption under the Act under which the offering of securities would be
conducted;
(2) Section 15 U.S.C. 77d(a)(2) (Section 4(a)(2)), §§ 230.501 through 230.508
(Regulation D), or § 230.147, or § 230.147A (Rules 147 or 147A), on the date the issuer
first made an offer of its securities in reliance on these exemptions;
(3) Sections 230.251 through 230.263 (Regulation A), on the earlier of the date
the issuer first made an offer soliciting interest in a contemplated securities offering in
reliance on § 230.255, or the public filing of a Form 1-A offering statement;
(4) Sections 227.100 through 227.503 of this chapter (Regulation Crowdfunding),
on the earlier of the date the issuer first made an offer soliciting interest in a
contemplated securities offering in reliance on § 227.206 of this chapter, or the public
filing of a Form C offering statement; and
(5) A registration statement filed under the Act, in the case of:
(i) A continuous offering that will commence promptly on the date of initial
effectiveness, on the date the issuer first filed its registration statement for the
offering with the Commission; or
(ii) A delayed offering, on the earliest date on which the issuer or its agents
commenced public efforts to offer and sell the securities, which could be evidenced by the
earlier of:
(A) The first filing of a prospectus supplement with the Commission describing
the delayed offering; or
(B) The issuance of a widely disseminated public disclosure, such as a press
release, confirming the commencement of the delayed offering.
Note 1 to paragraph (c)(5): Offers by the issuer,
or persons acting on behalf of the issuer, limited exclusively to qualified institutional
buyers and institutional accredited investors, including those that would qualify for the
safe harbor in § 230.163B, will not be considered the commencement of a registered offering
for purposes of this section.
(d) Termination or completion of an offering. For purposes of this section, the
termination or completion of an offering is deemed to have occurred when the issuer and its
agents cease efforts to make further offers to sell the issuer's securities under such
offering. The following non-exclusive list of factors should be considered in determining
when an offering is deemed to be terminated or completed including for offerings made in
reliance on:
(1) Section 4(a)(2), Regulation D, or Rules 147 or 147A, on the later of the date:
(i) The issuer entered into a binding commitment to sell all securities to be sold under
the offering (subject only to conditions outside of the investor's control); or
(ii) The issuer and its agents ceased efforts to make further offers to sell the issuer's
securities under such offering;
(2) Regulation A, on:
(i) The withdrawal of an offering statement under § 230.259(a);
(ii) The filing of a § 239.94 of this chapter (Form 1-Z) with respect to a
Tier I offering under § 230.257(a);
(iii) The declaration by the Commission that the offering statement has been abandoned
under §230.259(b); or
(iv) The date, after the third anniversary of the date the offering
statement was initially qualified, on which § 230.251(d)(3)(i)(F) prohibits the issuer from
continuing to sell securities using the offering statement, or any earlier date on which the
offering terminates by its terms;
(3) Regulation Crowdfunding, on the deadline of the offering identified in
the offering materials pursuant to § 227.201(g) of this chapter, or indicated by the
Regulation Crowdfunding intermediary in any notice to investors delivered under § 227.304(b)
of this chapter; and
(4) A registration statement filed under the Act:
(i) On the withdrawal of the registration statement after an application
is granted or deemed granted under § 230.477;
(ii) On the filing of a prospectus supplement or amendment to the registration statement
indicating that the offering, or particular delayed offering in the case of a shelf
registration statement, has been terminated or completed;
(iii) On the entry of an order of the Commission declaring that the
registration statement has been abandoned under § 230.479;
(iv) On the date, after the third anniversary of the initial effective
date of the registration statement, on which § 230.415(a)(5) prohibits the issuer from
continuing to sell securities using the registration statement, or any earlier date on which
the offering terminates by its terms; or
(v) Any other factors that indicate that the issuer has abandoned or ceased its public
selling efforts in furtherance of the offering, or particular delayed offering in the case
of a shelf registration statement, which could be evidenced by:
(A) The filing of a Current Report on Form 8-K; or
(B) The issuance of a widely disseminated public disclosure by the issuer, or its agents,
informing the market that the offering, or particular delayed offering, in the case of a
shelf registration statement, has been terminated or completed.
Note 2 to paragraph (d)(4): A particular delayed offering may be deemed terminated
or completed, even though the issuer's shelf registration statement may still have an
aggregate amount of securities available to offer and sell in a later delayed offering.
[86 FR 3596, Jan. 14, 2021]
230.152a — Offer or sale of certain fractional interests.
Any offer or sale of a security, evidenced by a scrip certificate, order
form or similar document which represents a fractional interest in a share of stock or
similar security shall be deemed a transaction by a person other than an issuer, underwriter
or dealer, within the meaning of section 4(1) of the act, if the fractional interest (a)
resulted from a stock dividend, stock split, reverse stock split, conversion, merger or
similar transaction, and (b) is offered or sold pursuant to arrangements for the purchase
and sale of fractional interests among the person entitled to such fractional interests for
the purpose of combining such interests into whole shares, and for the sale of such number
of whole shares as may be necessary to compensate security holders for any remaining
fractional interests not so combined, notwithstanding that the issuer or an affiliate of the
issuer may act on behalf of or as agent for the security holders in effecting such
transactions.
(Sec. 4, 48 Stat. 77; 15 U.S.C. 77d)
[30 FR 2657, Mar. 2, 1965]
230.153 — Definition of “preceded by a prospectus” as used in section 5(b)(2) of the Act, in relation to certain transactions.
(a) Definition of preceded by a prospectus. The term preceded by a
prospectus as used in section 5(b)(2) of the Act, regarding any requirement of a broker or
dealer to deliver a prospectus to a broker or dealer as a result of a transaction effected
between such parties on or through a national securities exchange or facility thereof,
trading facility of a national securities association, or an alternative trading system,
shall mean the satisfaction of the conditions in paragraph (b) of this section.
(b) Conditions. Any requirement of a broker or dealer to deliver a
prospectus for transactions covered by paragraph (a) of this section will be satisfied
if:
(1) Securities of the same class as the securities that are the subject of
the transaction are trading on that national securities exchange or facility thereof,
trading facility of a national securities association, or alternative trading system;
(2) The registration statement relating to the offering is effective and
is not the subject of any pending proceeding or examination under section 8(d) or 8(e) of
the Act;
(3) Neither the issuer, nor any underwriter or participating dealer is the
subject of a pending proceeding under section 8A of the Act in connection with the offering;
and
(4) The issuer has filed or will file with the Commission a prospectus
that satisfies the requirements of section 10(a) of the Act.
(c) Definitions. (1) The term national securities exchange,
as used in this section, shall mean a securities exchange registered as a national
securities exchange under section 6 of the Securities Exchange Act of 1934 (15 U.S.C.
78f).
(2) The term trading facility, as used in this section, shall mean
a trading facility sponsored and governed by the rules of a registered securities
association or a national securities exchange.
(3) The term alternative trading system, as used in this section,
shall mean an alternative trading system as defined in Rule 300(a) of Regulation ATS under
the Securities Exchange Act of 1934 (§ 242.300(a) of this chapter) registered with the
Commission pursuant to Rule 301 of Regulation ATS under the Securities Exchange Act of 1934
(§ 242.301(a) of this chapter).
[70 FR 44804, Aug. 3, 2005]
Cross References:
For the rules and regulations under the Securities Exchange Act of 1934,
see part 240 of this chapter. For general requirements as to prospectuses, see §§
230.400-230.434a.
230.153a — Definition of “preceded by a prospectus” as used in section 5(b)(2) of the Act, in relation to certain transactions requiring approval of security holders.
The term preceded by a prospectus, as used in section 5(b)(2) of
the Act with respect to any requirement for the delivery of a prospectus to security holders
of a corporation or other person, in connection with transactions of the character specified
in paragraph (a) of § 230.145, shall mean the delivery of a prospectus:
(a) Prior to the vote of security holders on such transactions; or,
(b) With respect to actions taken by consent, prior to the earliest date
on which the corporate action may be taken; to all security holders of record of such
corporation or other person, entitled to vote on or consent to the proposed transaction, at
their address of record on the transfer records of the corporation or other person.
[37 FR 23636, Nov. 7, 1972]
230.153b — Definition of “preceded by a prospectus”, as used in section 5(b)(2), in connection with certain transactions in standardized options.
The term preceded by a prospectus, as used in section 5(b)(2) of
the Act with respect to any requirement for the delivery of a prospectus relating to
standardized options registered on Form S-20, shall mean the delivery, prior to any
transactions, of copies of such prospectus to each options market upon which the options are
traded, for the purpose of redelivery to options customers upon their request,
Provided That:
(a) Such options market shall thereto have requested of the issuer, from
time to time, such number of copies of such prospectus as may have appeared reasonably
necessary to comply with the requests of options customers, and shall have delivered
promptly from its supply on hand a copy to any options customer making a request thereof;
and
(b) The issuer shall have furnished such options market with such
reasonable number of copies of such prospectus as may have been requested by the options
market for the purpose stated above.
(15 U.S.C. 77a et seq.)
[47 FR 41955, Sept. 23, 1982]
230.154 — Delivery of prospectuses to investors at the same address.
(a) Delivery of a single prospectus. If you must deliver a
prospectus under the federal securities laws, for purposes of sections 5(b) and 2(a)(10) of
the Act (15 U.S.C. 77e(b) and 77b(a)(10)) or § 240.15c2-8(b) of this chapter, you will be
considered to have delivered a prospectus to investors who share an address if:
(1) You deliver a prospectus to the shared address;
(2) You address the prospectus to the investors as a group (for example,
“ABC Fund [or Corporation] Shareholders,” “Jane Doe and Household,” “The Smith Family”) or
to each of the investors individually (for example, “John Doe and Richard Jones”); and
(3) The investors consent in writing to delivery of one prospectus.
(b) Implied consent. You do not need to obtain written consent from
an investor under paragraph (a)(3) of this section if all of the following conditions are
met:
(1) The investor has the same last name as the other investors, or you
reasonably believe that the investors are members of the same family;
(2) You have sent the investor a notice at least 60 days before you begin
to rely on this section concerning delivery of prospectuses to that investor. The notice
must be a separate written statement and:
(i) State that only one prospectus will be delivered to the shared address
unless you receive contrary instructions;
(ii) Include a toll-free telephone number or be accompanied by a reply
form that is pre-addressed with postage provided, that the investor can use to notify you
that he or she wishes to receive a separate prospectus;
(iii) State the duration of the consent;
(iv) Explain how an investor can revoke consent;
(v) State that you will begin sending individual copies to an investor
within 30 days after you receive revocation of the investor's consent; and
(vi) Contain the following prominent statement, or similar clear and
understandable statement, in bold-face type: “Important Notice Regarding Delivery of
Shareholder Documents.” This statement also must appear on the envelope in which the notice
is delivered. Alternatively, if the notice is delivered separately from other communications
to investors, this statement may appear either on the notice or on the envelope in which the
notice is delivered;
|
Note to paragraph (b)(2):
The notice should be written in plain English. See §
230.421(d)(2) of this chapter for a discussion of plain English principles.
|
(3) You have not received the reply form or other notification indicating
that the investor wishes to continue to receive an individual copy of the prospectus, within
60 days after you sent the notice; and
(4) You deliver the prospectus to a post office box or to a residential
street address. You can assume a street address is a residence unless you have information
that indicates it is a business.
(c) Revocation of consent. If an investor, orally or in writing,
revokes consent to delivery of one prospectus to a shared address (provided under paragraphs
(a)(3) or (b) of this section), you must begin sending individual copies to that investor
within 30 days after you receive the revocation. If the individual's consent concerns
delivery of the prospectus of a registered open-end management investment company, at least
once a year you must explain to investors who have consented how they can revoke their
consent. The explanation must be reasonably designed to reach these investors.
(d) Definition of address. For purposes of this section,
address means a street address, a post office box number, an electronic mail
address, a facsimile telephone number, or other similar destination to which paper or
electronic documents are delivered, unless otherwise provided in this section. If you have
reason to believe that an address is the street address of a multi-unit building, the
address must include the unit number.
[64 FR 62545, Nov. 16, 1999, as amended at 65 FR
65749, Nov. 2, 2000]
230.155 — [Removed and reserved]
[66 FR 8896, Feb. 5, 2001, as amended at 76 FR 81805, Dec. 29, 2011, 78 FR
44729, Jul 24, 2013; 86 FR 3496, Jan. 14, 2021]
230.156 — Investment company and registered non-variable annuity sales literature.
(a) Under the Federal securities laws, including section 17(a) of the
Securities Act of 1933 (15 U.S.C. 77q(a)) and section 10(b) of the Securities Exchange Act
of 1934 (15 U.S.C. 78j(b)) and § 240.10b-5 of this chapter (Rule 10b-5) thereunder, it is
unlawful for any person, directly or indirectly, by the use of any means or instrumentality
of interstate commerce or of the mails, to use sales literature which is materially
misleading in connection with the offer or sale of registered non-variable annuity
securities or securities issued by an investment company. Under these provisions, sales
literature is materially misleading if it:
(1) Contains an untrue statement of a material fact; or
(2) Omits to state a material fact necessary in order to make a statement made, in the
light of the circumstances of its use, not misleading.
(b) Whether or not a particular description, representation, illustration, or other
statement involving a material fact is misleading depends on evaluation of the context in
which it is made. In considering whether a particular statement involving a material fact is
or might be misleading, weight should be given to all pertinent factors, including, but not
limited to, those listed below.
(1) A statement could be misleading because of:
(i) Other statements being made in connection with the offer of sale or
sale of the securities in question;
(ii) The absence of explanations, qualifications, limitations or other statements necessary
or appropriate to make such statement not misleading; or
(iii) General economic or financial conditions or circumstances.
(2) Representations about past or future investment performance could be misleading because
of statements or omissions made involving a material fact, including situations where:
(i) Portrayals of past income, gain, or growth of assets convey an impression of the net
investment results achieved by an actual or hypothetical investment which would not be
justified under the circumstances, including portrayals that omit explanations,
qualifications, limitations, or other statements necessary or appropriate to make the
portrayals not misleading; and
(ii) Representations, whether express or implied, about future investment performance,
including:
(A) Representations, as to security of capital, possible future gains or income, or
expenses associated with an investment;
(B) Representations implying that future gains or income may be inferred from or predicted
based on past investment performance; or
(C) Portrayals of past performance, made in a manner which would imply that gains or income
realized in the past would be repeated in the future.
(3) A statement involving a material fact about the characteristics or attributes of an
investment company or registered non-variable annuity could be misleading because of:
(i) Statements about possible benefits connected with or resulting from services to be
provided or methods of operation which do not give equal prominence to discussion of any
risks or limitations associated therewith;
(ii) Exaggerated or unsubstantiated claims about management skill or techniques,
characteristics of the investment company or registered non-variable annuity or an
investment in such company or securities, services, security of investment or funds, effects
of government supervision, or other attributes; and
(iii) Unwarranted or incompletely explained comparisons to other investment vehicles or to
indexes.
(4) Representations about the fees or expenses associated with an investment in the fund or
registered non-variable annuity could be misleading because of statements or omissions made
involving a material fact, including situations where portrayals of the fees and expenses
associated with an investment in the fund or registered non-variable annuity omit
explanations, qualifications, limitations, or other statements necessary or appropriate to
make the portrayals not misleading.
(c) For purposes of this section, the term sales literature shall be deemed to
include any communication (whether in writing, by radio, or by television) used by any
person to offer to sell or induce the sale of securities of any investment company or
registered non-variable annuity. Communications between issuers, underwriters and dealers
are included in this definition of sales literature if such communications, or the
information contained therein, can be reasonably expected to be communicated to prospective
investors in the offer or sale of securities or are designed to be employed in either
written or oral form in the offer or sale of securities.
(d) Nothing in this section may be construed to prevent a business development company or a
registered closed-end investment company from qualifying for an exemption under § 230.168 or
§ 230.169.
[44 FR 64072, Nov. 6, 1979, as amended at 68 FR 57777, Oct. 6, 2003; 85 FR
33290, June 1, 2020; 87 FR 72758, Nov. 25, 2022; 89 FR 59978, July 24, 2024]
230.157 — Small entities under the Securities Act for purposes of the Regulatory Flexibility Act.
For purposes of Commission rulemaking in accordance with the provisions of
Chapter Six of the Administrative Procedure Act (5 U.S.C. 601 et seq.), and unless
otherwise defined for purposes of a particular rulemaking proceeding, the term small
business or small organization shall:
(a) When used with reference to an issuer, other than an investment
company, for purposes of the Securities Act of 1933, mean an issuer whose total assets on
the last day of its most recent fiscal year were $5 million or less and that is engaged or
proposing to engage in small business financing. An issuer is considered to be engaged or
proposing to engage in small business financing under this section if it is conducting or
proposes to conduct an offering of securities which does not exceed the dollar limitation
prescribed by section 3(b)(1) of the Securities Act.
(b) When used with reference to an investment company that is an issuer
for purposes of the Act, have the meaning ascribed to those terms by § 270.0-10 of this
chapter.
[47 FR 5221, Feb. 4, 1982, as amended at 51 FR
25362, July 14, 1986; 63 FR 35514, June 30, 1998; 80 FR 21805, April 20, 2015]
230.158 — Definitions of certain terms in the last paragraph of section 11(a).
(a) An “earning statement” made generally available to securityholders of
the registrant pursuant to the last paragraph of section 11(a) of the Act shall be
sufficient for the purposes of such paragraph if:
(1) There is included the information required for statements of
comprehensive income (as defined in § 210.1-02 of Regulation S-X of this chapter) contained
either:
(i) In Item 8 of Form 10-K (§ 239.310 of this chapter), part I, Item 1 of
Form 10-Q (§ 240.308a of this chapter), or Rule 14a-3(b) (§ 240.14a-3(b) of this chapter)
under the Securities Exchange Act of 1934;
(ii) In Item 17 of Form 20-F (§ 249.220f of this chapter), if appropriate;
or
(iii) In Form 40-F (§ 249.240f of this chapter); and
(2) The information specified in the last paragraph of section 11(a) is
contained in one report or any combination of reports either:
(i) On Form 10-K, Form 10-Q, Form 8-K (§ 249.308 of this chapter), or in
the annual report to security holders pursuant to Rule 14a-3 under the Securities Exchange
Act of 1934 (§ 240.14a-3 of this chapter); or
(ii) On Form 20-F, Form 40-F or Form 6-K (§ 249.306 of this chapter).
Note 1 to paragraph (a). A subsidiary issuing debt
securities guaranteed by its parent will be deemed to have met the requirements of this
paragraph (a) if the parent's statements of comprehensive income (as defined in § 210.1-02
of Regulation S-X) satisfy the criteria of this paragraph and information respecting the
subsidiary is included to the same extent as was presented in the registration statement. An
“earning statement” not meeting the requirements of this paragraph (a) may otherwise be
sufficient for purposes of the last paragraph of section 11(a) of the Act.
(b) For purposes of the last paragraph of section 11(a) only, the “earning
statement” contemplated by paragraph (a) of this section shall be deemed to be “made
generally available to its security holders” if the registrant:
(1) Is required to file reports pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 and
(2) Has filed its report or reports on Form 10-K, Form 10-Q, Form 8-K,
Form 20-F, Form 40-F, or Form 6-K, or has submitted to the Commission in electronic format,
in accordance with the EDGAR Filer Manual, its annual report sent to security holders
pursuant to Rule 14a-3(c) (§ 240.14a-3(c) of this chapter) containing such information. A
registrant may use other methods to make an earning statement “generally available to its
security holders” for purposes of the last paragraph of section 11(a).
(c) For purposes of the last paragraph of section 11(a) of the Act only,
the effective date of the registration statement is deemed to be the date of the latest to
occur of:
(1) The effective date of the registration statement;
(2) The effective date of the last post-effective amendment to the
registration statement next preceding a particular sale of the issuer's registered
securities to the public filed for the purposes of:
(i) Including any prospectus required by section 10(a)(3) of the Act;
or
(ii) Reflecting in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(3) The date of filing of the last report of the issuer incorporated by
reference into the prospectus that is part of the registration statement or the date that a
form of prospectus filed pursuant to Rule 424(b) or Rule 497(b), (c), (d), or (e) (§
230.424(b) or § 230.497(b), (c), (d), or (e)) is deemed part of and included in the
registration statement, and relied upon in either case in lieu of filing a post-effective
amendment for purposes of paragraphs (c)(2)(i) and (ii) of this section next preceding a
particular sale of the issuer's registered securities to the public; or
(4) As to the issuer and any underwriter at that time only, the most
recent effective date of the registration statement for purposes of liability under section
11 of the Act of the issuer and any such underwriter only at the time of or next preceding a
particular sale of the issuer's registered securities to the public determined pursuant to
Rule 430B (§ 230.430B).
(d) If an earnings statement was made available by “other methods” than
those specified in paragraphs (a) and (b) of this section, the earnings statement must be
filed as exhibit 99 to the next periodic report required by section 13 or 15(d) of the
Exchange Act covering the period in which the earnings statement was released.
[48 FR 44770, Sept. 30, 1983, as amended at 56 FR 30054, July 1, 1991; 58
FR 14669, Mar. 18, 1993; 70 FR 44804, Aug. 3, 2005; 73 FR 967, Jan. 4, 2008; 87 FR 35393,
June 10, 2022]
230.159 — Information available to purchaser at time of contract of sale.
(a) For purposes of section 12(a)(2) of the Act only, and without
affecting any other rights a purchaser may have, for purposes of determining whether a
prospectus or oral statement included an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading at the time of sale (including,
without limitation, a contract of sale), any information conveyed to the purchaser only
after such time of sale (including such contract of sale) will not be taken into
account.
(b) For purposes of section 17(a)(2) of the Act only, and without
affecting any other rights the Commission may have to enforce that section, for purposes of
determining whether a statement includes or represents any untrue statement of a material
fact or any omission to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading at the time
of sale (including, without limitation, a contract of sale), any information conveyed to the
purchaser only after such time of sale (including such contract of sale) will not be taken
into account.
(c) For purposes of section 12(a)(2) of the Act only, knowing of such
untruth or omission in respect of a sale (including, without limitation, a contract of
sale), means knowing at the time of such sale (including such contract of sale).
[70 FR 44804, Aug. 3, 2005]
230.159A — Certain definitions for purposes of section 12(a)(2) of the Act.
(a) Definition of seller for purposes of section 12(a)(2) of the
Act. For purposes of section 12(a)(2) of the Act only, in a primary offering of
securities of the issuer, regardless of the underwriting method used to sell the issuer's
securities, seller shall include the issuer of the securities sold to a person as
part of the initial distribution of such securities, and the issuer shall be considered to
offer or sell the securities to such person, if the securities are offered or sold to such
person by means of any of the following communications:
(1) Any preliminary prospectus or prospectus of the issuer relating to the
offering required to be filed pursuant to Rule 424 (§ 230.424) or Rule 497 (§ 230.497);
(2) Any free writing prospectus as defined in § 230.405 (Rule 405)
relating to the offering prepared by or on behalf of the issuer or used or referred to by
the issuer and, in the case of an issuer that is an open-end management company registered
under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or a separate
account (as defined in Section 2(a)(14) of the Securities Act) (15 U.S.C. 77b(a)(14)) registered under the
Investment Company Act of 1940 on §§ 239.17a and 274.11b of this chapter (Form N-3),
§§ 239.17b and 274.11c of this chapter (Form N-4), or §§ 239.17c and 274.11d of this chapter
(Form N-6), any summary prospectus relating to the offering provided pursuant to § 230.498
(Rule 498) or § 230.498A (Rule 498A), respectively;
(3) The portion of any other free writing prospectus (or, in the case of
an issuer that is an investment company registered under the Investment Company Act of 1940
or a business development company as defined in section 2(a)(48) of the Investment Company
Act of 1940 (15 U.S.C. 80a-2(a)(48)), any advertisement pursuant to Rule 482 (§ 230.482))
relating to the offering containing material information about the issuer or its securities
provided by or on behalf of the issuer; and
(4) Any other communication that is an offer in the offering made by the
issuer to such person.
|
Notes to paragraph (a) of Rule 159A.
1. For purposes of paragraph (a) of this section, information
is provided or a communication is made by or on behalf of an issuer if an issuer
or an agent or representative of the issuer authorizes or approves the
information or communication before its provision or use. An offering
participant other than the issuer shall not be an agent or representative of the
issuer solely by virtue of its acting as an offering participant.
2. Paragraph (a) of this section shall not affect in any
respect the determination of whether any person other than an issuer is a
“seller” for purposes of section 12(a)(2) of the Act.
|
(b) Definition of by means of for purposes of section 12(a)(2) of the
Act. (1) For purposes of section 12(a)(2) of the Act only, an offering participant
other than the issuer shall not be considered to offer or sell securities that are the
subject of a registration statement by means of a free writing prospectus as to a purchaser
unless one or more of the following circumstances shall exist:
(i) The offering participant used or referred to the free writing
prospectus in offering or selling the securities to the purchaser;
(ii) The offering participant offered or sold securities to the purchaser
and participated in planning for the use of the free writing prospectus by one or more other
offering participants and such free writing prospectus was used or referred to in offering
or selling securities to the purchaser by one or more of such other offering participants;
or
(iii) The offering participant was required to file the free writing
prospectus pursuant to the conditions to use in Rule 433 (§ 230.433).
(2) For purposes of section 12(a)(2) of the Act only, a person will not be
considered to offer or sell securities by means of a free writing prospectus solely because
another person has used or referred to the free writing prospectus or filed the free writing
prospectus with the Commission pursuant to Rule 433.
[70 FR 44805, Aug. 3, 2005, as amended at 74 FR 4584, Jan. 26, 2009; 85 FR
25964, May 1, 2020]
230.160 — Registered investment company exemption from Section 101(c)(1) of the Electronic Signatures in Global and National Commerce Act.
A prospectus for an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.) that is sent or given for the sole
purpose of permitting a communication not to be deemed a prospectus under section
2(a)(10)(a) of the Act (15 U.S.C. 77b(a)(10)(a)) shall be exempt from the requirements of
section 101(c)(1) of the Electronic Signatures in Global and National Commerce Act.
[65 FR 47284, Aug. 2, 2000]
230.161 — Amendments to rules and regulations governing exemptions.
The rules and regulations governing the exemption of securities under
section 3(b) of the Act, as in effect at the time the securities are first bona fide offered
to the public in conformity therewith, shall continue to govern the exemption of such
securities notwithstanding the subsequent amendment of such rules and regulations. This
section shall not apply, however, to any new offering of such securities by an issuer or
underwriter after the effective date of any such amendment, nor shall it apply to any
offering after January 1, 1959, of securities by an issuer or underwriter pursuant to
Regulation D or pursuant to Regulation A as in effect at any time prior to July 23,
1956.
[23 FR 4454, June 20, 1958]
230.162 — Submission of tenders in registered exchange offers.
(a) Notwithstanding section 5(a) of the Act (15 U.S.C. 77e(a)), an offeror
may solicit tenders of securities in an exchange offer before a registration statement is
effective as to the security offered, so long as no securities are purchased until the
registration statement is effective and the tender offer has expired in accordance with the
tender offer rules, and either:
(1) The exchange offer is subject to § 240.13e-4 or §§ 240.14d-1 through
14d-11 of this chapter; or
(2) The offeror provides withdrawal rights to the same extent as would be
required if the exchange offer were subject to the requirements of § 240.13e-4 or §§
240.14d-1 through 14d-11 of this chapter; and if a material change occurs in the information
published, sent or given to security holders, the offeror complies with the provisions of §
240.13e-4(e)(3) or § 240.14d-4(b) and (d) of this chapter in disseminating information about
the material change to security holders, and including the minimum periods during which the
offer must remain open (with withdrawal rights) after notice of the change is provided to
security holders.
(b) Notwithstanding Section 5(b)(2) of the Act (15 U.S.C. 77e(b)(2)), a
prospectus that meets the requirements of Section 10(a) of the Act (15 U.S.C. 77j(a)) need
not be delivered to security holders in an exchange offer that commences before the
effectiveness of a registration statement in accordance with the provisions of § 230.162(a)
of this section, so long as a preliminary prospectus, prospectus supplements and revised
prospectuses are delivered to security holders in accordance with § 240.13e-4(e)(2) or §
240.14d-4(b) of this chapter. This applies not only to exchange offers subject to those
provisions, but also to exchange offers not subject to those provisions that meet the
conditions in § 230.162(a)(2) of this section.
Instruction to § 230.162 of this section: Notwithstanding the provisions of § 230.162
of this section above, for going-private transactions (as defined by § 240.13e-3) and
roll-up transactions (as described by Item 901 of Regulation S-K (§ 229.901 of this
chapter)), a registration statement registering the securities to be offered must have
become effective and only a prospectus that meets the requirements of Section 10(a) of the
Securities Act may be delivered to security holders on the date of commencement.
[73 FR 60087, Oct. 9, 2008]
230.163 — Exemption from section 5(c) of the Act for certain communications by or on behalf of well-known seasoned issuers.
|
Preliminary Note to § 230.163.
Attempted compliance with this section does not act as an
exclusive election and the issuer also may claim the availability of any other
applicable exemption or exclusion. Reliance on this section does not affect the
availability of any other exemption or exclusion from the requirements of
section 5 of the Act.
|
(a) In an offering by or on behalf of a well-known seasoned issuer, as
defined in Rule 405 (§ 230.405), that will be or is at the time intended to be registered
under the Act, an offer by or on behalf of such issuer is exempt from the prohibitions in
section 5(c) of the Act on offers to sell, offers for sale, or offers to buy its securities
before a registration statement has been filed, provided that:
(1) Any written communication that is an offer made in reliance on this
exemption will be a free writing prospectus as defined in Rule 405 and a prospectus under
section 2(a)(10) of the Act relating to a public offering of securities to be covered by the
registration statement to be filed; and
(2) The exemption from section 5(c) of the Act provided in this section
for such written communication that is an offer shall be conditioned on satisfying the
conditions in paragraph (b) of this section.
(b) Conditions — (1) Legend. (i) Every written communication
that is an offer made in reliance on this exemption shall contain substantially the
following legend:
The issuer may file a registration statement
(including a prospectus) with the SEC for the offering to which this communication relates.
Before you invest, you should read the prospectus in that registration statement and other
documents the issuer has filed with the SEC for more complete information about the issuer
and this offering. You may get these documents for free by visiting EDGAR on the SEC Web
site at www.sec.gov. Alternatively, the company will arrange to send you the
prospectus after filing if you request it by calling toll-free 1-8[xx-xxx-xxxx].
(ii) The legend also may provide an e-mail address at which the documents
can be requested and may indicate that the documents also are available by accessing the
issuer's Web site, and provide the Internet address and the particular location of the
documents on the Web site.
(iii) An immaterial or unintentional failure to include the specified
legend in a free writing prospectus required by this section will not result in a violation
of section 5(c) of the Act or the loss of the ability to rely on this section so long
as:
(A) A good faith and reasonable effort was made to comply with the
specified legend condition;
(B) The free writing prospectus is amended to include the specified legend
as soon as practicable after discovery of the omitted or incorrect legend; and
(C) If the free writing prospectus has been transmitted without the
specified legend, the free writing prospectus is retransmitted with the legend by
substantially the same means as, and directed to substantially the same prospective
purchasers to whom, the free writing prospectus was originally transmitted.
(2) Filing condition. (i) Subject to paragraph (b)(2)(ii) of this
section, every written communication that is an offer made in reliance on this exemption
shall be filed by the issuer with the Commission promptly upon the filing of the
registration statement, if one is filed, or an amendment, if one is filed, covering the
securities that have been offered in reliance on this exemption.
(ii) The condition that an issuer shall file a free writing prospectus
with the Commission under this section shall not apply in respect of any communication that
has previously been filed with, or furnished to, the Commission or that the issuer would not
be required to file with the Commission pursuant to the conditions of Rule 433 (§ 230.433)
if the communication was a free writing prospectus used after the filing of the registration
statement. The condition that the issuer shall file a free writing prospectus with the
Commission under this section shall be satisfied if the issuer satisfies the filing
conditions (other than timing of filing which is provided in this section) that would apply
under Rule 433 if the communication was a free writing prospectus used after the filing of
the registration statement.
(iii) An immaterial or unintentional failure to file or delay in filing a
free writing prospectus to the extent provided in this section will not result in a
violation of section 5(c) of the Act or the loss of the ability to rely on this section so
long as:
(A) A good faith and reasonable effort was made to comply with the filing
condition; and
(B) The free writing prospectus is filed as soon as practicable after
discovery of the failure to file.
(3) Ineligible offerings. The exemption in paragraph (a) of this
section shall not be available to:
(i) Communications relating to business combination transactions that are
subject to § 230.165 (Rule 165) or § 230.166 (Rule 166); or
(ii) Communications by an issuer that is an investment company registered
under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), other than a
registered closed-end investment company.
(c) For purposes of this section, a communication is made by or on behalf
of an issuer if the issuer or an agent or representative of the issuer, other than an
offering participant who is an underwriter or dealer, authorizes or approves the
communication before it is made.
(d) For purposes of this section, a communication for which disclosure
would be required under section 17(b) of the Act as a result of consideration given or to be
given, directly or indirectly, by or on behalf of an issuer is deemed to be an offer by the
issuer and, if a written communication, is deemed to be a free writing prospectus of the
issuer.
(e) A communication exempt from section 5(c) of the Act pursuant to this
section will not be considered to be in connection with a securities offering registered
under the Securities Act for purposes of Rule 100(b)(2)(iv) of Regulation FD under the
Securities Exchange Act of 1934 (§ 243.100(b)(2)(iv) of this chapter).
[70 FR 44805, Aug. 3, 2005; as amended at 85 FR 33290, June 1, 2020]
230.163A — Exemption from section 5(c) of the Act for certain communications made by or on behalf of issuers more than 30 days before a registration statement is filed.
|
Preliminary Note to § 230.163A.
Attempted compliance with this section does not act as an
exclusive election and the issuer also may claim the availability of any other
applicable exemption or exclusion. Reliance on this section does not affect the
availability of any other exemption or exclusion from the requirements of
section 5 of the Act.
|
(a) Except as excluded pursuant to paragraph (b) of this section, in all
registered offerings by issuers, any communication made by or on behalf of an issuer more
than 30 days before the date of the filing of the registration statement that does not
reference a securities offering that is or will be the subject of a registration statement
shall not constitute an offer to sell, offer for sale, or offer to buy the securities being
offered under the registration statement for purposes of section 5(c) of the Act, provided
that the issuer takes reasonable steps within its control to prevent further distribution or
publication of such communication during the 30 days immediately preceding the date of
filing the registration statement.
(b) The exemption in paragraph (a) of this section shall not be available
with respect to the following communications:
(1) Communications relating to business combination transactions that are
subject to Rule 165 (§ 230.165) or Rule 166 (§ 230.166);
(2) Communications made in connection with offerings registered on Form
S-8 (§ 239.16b of this chapter), other than by well-known seasoned issuers;
(3) Communications in offerings of securities of an issuer that is, or
during the past three years was (or any of whose predecessors during the last three years
was):
(i) A blank check company as defined in Rule 419(a)(2) (§
230.419(a)(2));
(ii) A shell company, other than a business combination related shell
company, each as defined in Rule 405 (§ 230.405); or
(iii) An issuer for an offering of penny stock as defined in Rule 3a51-1
of the Securities Exchange Act of 1934 (§ 240.3a51-1 of this chapter); or
(4) Communications made by an issuer that is an investment company
registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), other
than a registered closed-end investment company.
(c) For purposes of this section, a communication is made by or on behalf
of an issuer if the issuer or an agent or representative of the issuer, other than an
offering participant who is an underwriter or dealer, authorizes or approves the
communication before it is made.
(d) A communication exempt from section 5(c) of the Act pursuant to this
section will not be considered to be in connection with a securities offering registered
under the Securities Act for purposes of Rule 100(b)(2)(iv) of Regulation FD under the
Securities Exchange Act of 1934 (§ 243.100(b)(2)(iv) of this chapter).
[70 FR 44806, Aug. 3, 2005; as amended at 85 FR 33290, June 1,
2020]
230.163B — Exemption from section 5(b)(1) and section 5(c) of the Act for certain communications to qualified institutional buyers or institutional accredited investors.
(a) Attempted compliance with this rule does not act as an exclusive
election, and the issuer also may claim the availability of any other applicable exemption
or exclusion. Reliance on this rule does not affect the availability of any other exemption
or exclusion from the requirements of section 5 of the Act (15 U.S.C. 77e).
(b)(1) An issuer, or any person authorized to act on behalf of an issuer,
may engage in oral or written communications with potential investors described in paragraph
(c) of this section to determine whether such investors might have an interest in a
contemplated registered securities offering, either prior to or following the date of filing
of a registration statement with respect to such securities with the Commission.
Communications under this rule will be exempt from section 5(b)(1) (15 U.S.C. 77e(b)(1)) and
section 5(c) of the Act (15 U.S.C. 77e(c)).
(2) Any oral or written communication by an issuer, or any person
authorized to act on behalf of an issuer, made in reliance on this rule will be deemed an
“offer” as defined in section 2(a)(3) of the Act (15 U.S.C.77b(a)(3)).
(3) Any oral or written communication by an issuer, or any person
authorized to act on behalf of an issuer, made in reliance on this rule is not required to
be filed with the Commission, including pursuant to § 230.424(a) or § 230.497(a) of
Regulation C under the Act or section 24(b) of the Investment Company Act of 1940 (15 U.S.C.
80a-24(b)) and the rules and regulations thereunder.
(c) Communications under this rule may be made with potential investors
that are, or that an issuer or person authorized to act on its behalf reasonably believes
are:
(1) Qualified institutional buyers, as defined in § 230.144A; or
(2) Institutions that are accredited investors, as defined in
§§ 230.501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12), or (a)(13).
|
Note 1 to paragraph (c)(2):
Though the definition of “family client” from Rule 501(a)(13) includes both
natural persons and institutions, only family clients that are institutions may
be considered institutional accredited investors.
|
[84 FR 53011, Oct. 4, 2019; as amended at 85 FR 64234, Oct. 9, 2020]
230.164 — Post-filing free writing prospectuses in connection with certain registered offerings.
|
Preliminary Notes to § 230.164.
1. This section is not available for any communication that,
although in technical compliance with this section, is part of a plan or scheme
to evade the requirements of section 5 of the Act.
2. Attempted compliance with this section does not act as an
exclusive election and the person relying on this section also may claim the
availability of any other applicable exemption or exclusion. Reliance on this
section does not affect the availability of any other exemption or exclusion
from the requirements of section 5 of the Act.
|
(a) In connection with a registered offering of an issuer meeting the
requirements of this section, a free writing prospectus, as defined in Rule 405 (§ 230.405),
of the issuer or any other offering participant, including any underwriter or dealer, after
the filing of the registration statement will be a section 10(b) prospectus for purposes of
section 5(b)(1) of the Act provided that the conditions set forth in Rule 433 (§ 230.433)
are satisfied.
(b) An immaterial or unintentional failure to file or delay in filing a
free writing prospectus as necessary to satisfy the filing conditions contained in Rule 433
will not result in a violation of section 5(b)(1) of the Act or the loss of the ability to
rely on this section so long as:
(1) A good faith and reasonable effort was made to comply with the filing
condition; and
(2) The free writing prospectus is filed as soon as practicable after
discovery of the failure to file.
(c) An immaterial or unintentional failure to include the specified legend
in a free writing prospectus as necessary to satisfy the legend condition contained in Rule
433 will not result in a violation of section 5(b)(1) of the Act or the loss of the ability
to rely on this section so long as:
(1) A good faith and reasonable effort was made to comply with the legend
condition;
(2) The free writing prospectus is amended to include the specified legend
as soon as practicable after discovery of the omitted or incorrect legend; and
(3) If the free writing prospectus has been transmitted without the
specified legend, the free writing prospectus must be retransmitted with the legend by
substantially the same means as, and directed to substantially the same prospective
purchasers to whom, the free writing prospectus was originally transmitted.
(d) Solely for purposes of this section, an immaterial or unintentional
failure to retain a free writing prospectus as necessary to satisfy the record retention
condition contained in Rule 433 will not result in a violation of section 5(b)(1) of the Act
or the loss of the ability to rely on this section so long as a good faith and reasonable
effort was made to comply with the record retention condition. Nothing in this paragraph
will affect, however, any other record retention provisions applicable to the issuer or any
offering participant.
(e) Ineligible issuers. (1) This section and Rule 433 are available
only if at the eligibility determination date for the offering in question, determined
pursuant to paragraph (h) of this section, the issuer is not an ineligible issuer as defined
in Rule 405 (or in the case of any offering participant, other than the issuer, the
participant has a reasonable belief that the issuer is not an ineligible issuer);
(2) Notwithstanding paragraph (e)(1) of this section, this section and
Rule 433 are available to an ineligible issuer with respect to a free writing prospectus
that contains only descriptions of the terms of the securities in the offering or the
offering (or in the case of an offering of asset-backed securities, contains only
information specified in paragraphs (a)(1), (2), (3), (4), (6), (7), and (8) of the
definition of ABS informational and computational materials in Item 1101 of Regulation AB (§
229.1101 of this chapter), unless the issuer is or during the last three years the issuer or
any of its predecessors was:
(i) A blank check company as defined in Rule 419(a)(2) (§
230.419(a)(2));
(ii) A shell company, other than a business combination related shell
company, as defined in Rule 405; or
(iii) An issuer for an offering of penny stock as defined in Rule 3a51-1
of the Securities Exchange Act of 1934 (§ 240.3a51-1 of this chapter).
(f) Excluded issuers. This section and Rule 433 are not available
if the issuer is an investment company registered under the Investment Company Act of 1940
(15 U.S.C. 80a-1 et seq.), other than a registered closed-end investment company.
(g) Excluded offerings. This section and Rule 433 are not available
if the issuer is registering a business combination transaction as defined in Rule 165(f)(1)
(§ 230.165(f)(1)) or the issuer, other than a well-known seasoned issuer, is registering an
offering on Form S-8 (§ 239.16b of this chapter).
(h) For purposes of this section and Rule 433, the determination date as
to whether an issuer is an ineligible issuer in respect of an offering shall be:
(1) Except as provided in paragraph (h)(2) of this section, the time of
filing of the registration statement covering the offering; or
(2) If the offering is being registered pursuant to Rule 415 (§ 230.415),
the earliest time after the filing of the registration statement covering the offering at
which the issuer, or in the case of an underwritten offering the issuer or another offering
participant, makes a bona fide offer, including without limitation through the use of
a free writing prospectus, in the offering.
[70 FR 44806, Aug. 3, 2005; as amended at 85 FR 33290, June 1, 2020]
230.165 — Offers made in connection with a business combination transaction.
|
Preliminary Note:
This section is available only to communications relating to
business combinations. The exemption does not apply to communications that may
be in technical compliance with this section, but have the primary purpose or
effect of conditioning the market for another transaction, such as a
capital-raising or resale transaction.
|
(a) Communications before a registration statement is filed.
Notwithstanding section 5(c) of the Act (15 U.S.C. 77e(c)), the offeror of securities in a
business combination transaction to be registered under the Act may make an offer to sell or
solicit an offer to buy those securities from and including the first public announcement
until the filing of a registration statement related to the transaction, so long as any
written communication (other than non-public communications among participants) made in
connection with or relating to the transaction (i.e., prospectus) is filed in
accordance with § 230.425 and the conditions in paragraph (c) of this section are
satisfied.
(b) Communications after a registration statement is filed.
Notwithstanding section 5(b)(1) of the Act (15 U.S.C. 77e(b)(1)), any written communication
(other than non-public communications among participants) made in connection with or
relating to a business combination transaction (i.e., prospectus) after the filing of
a registration statement related to the transaction need not satisfy the requirements of
section 10 (15 U.S.C. 77j) of the Act, so long as the prospectus is filed in accordance with
§ 230.424 or § 230.425 and the conditions in paragraph (c) of this section are
satisfied.
(c) Conditions. To rely on paragraphs (a) and (b) of this
section:
(1) Each prospectus must contain a prominent legend that urges investors
to read the relevant documents filed or to be filed with the Commission because they contain
important information. The legend also must explain to investors that they can get the
documents for free at the Commission's web site and describe which documents are available
free from the offeror; and
(2) In an exchange offer, the offer must be made in accordance with the
applicable tender offer rules (§§ 240.14d-1 through 240.14e-8 of this chapter); and, in a
transaction involving the vote of security holders, the offer must be made in accordance
with the applicable proxy or information statement rules (§§ 240.14a-1 through 240.14a-101
and §§ 240.14c-1 through 240.14c-101 of this chapter).
(d) Applicability. This section is applicable not only to the
offeror of securities in a business combination transaction, but also to any other
participant that may need to rely on and complies with this section in communicating about
the transaction.
(e) Failure to file or delay in filing. An immaterial or
unintentional failure to file or delay in filing a prospectus described in this section will
not result in a violation of section 5(b)(1) or (c) of the Act (15 U.S.C. 77e(b)(1) and
(c)), so long as:
(1) A good faith and reasonable effort was made to comply with the filing
requirement; and
(2) The prospectus is filed as soon as practicable after discovery of the
failure to file.
(f) Definitions. (1) A business combination transaction
means any transaction specified in § 230.145(a) or exchange offer;
(2) A participant is any person or entity that is a party to the
business combination transaction and any persons authorized to act on their behalf; and
(3) Public announcement is any oral or written communication by a
participant that is reasonably designed to, or has the effect of, informing the public or
security holders in general about the business combination transaction.
[64 FR 61450, Nov. 10, 1999]
230.166 — Exemption from section 5(c) for certain communications in connection with business combination transactions.
|
Preliminary Note:
This section is available only to communications relating to
business combinations. The exemption does not apply to communications that may
be in technical compliance with this section, but have the primary purpose or
effect of conditioning the market for another transaction, such as a
capital-raising or resale transaction.
|
(a) Communications. In a registered offering involving a business
combination transaction, any communication made in connection with or relating to the
transaction before the first public announcement of the offering will not constitute an
offer to sell or a solicitation of an offer to buy the securities offered for purposes of
section 5(c) of the Act (15 U.S.C. 77e(c)), so long as the participants take all reasonable
steps within their control to prevent further distribution or publication of the
communication until either the first public announcement is made or the registration
statement related to the transaction is filed.
(b) Definitions. The terms business combination transaction,
participant and public announcement have the same meaning as set forth in § 230.165(f).
[64 FR 61450, Nov. 10, 1999]
230.167 — Communications in connection with certain registered offerings of asset-backed securities.
|
Preliminary Note:
This section is available only to communications in connection
with certain offerings of asset-backed securities. The exemption does not apply
to communications that may be in technical compliance with this section, but
have the primary purpose or effect of conditioning the market for another
transaction or are part of a plan or scheme to evade the requirements of section
5 of the Act (15 U.S.C. 77e).
|
(a) In an offering of asset-backed securities registered on Form SF-3 (§
239.45 of this chapter), ABS informational and computational material regarding such
securities used after the effective date of the registration statement and before the
sending or giving to investors of a final prospectus that meets the requirements of section
10(a) of the Act (15 U.S.C. 77j(a)) regarding such offering is exempt from section 5(b)(1)
of the Act (15 U.S.C. 77e(b)(1)), if the conditions in paragraph (b) of this section are
met.
(b) Conditions. To rely on paragraph (a) of this section:
(1) The communications shall be filed to the extent required pursuant to §
230.426.
(2) Every communication used pursuant to this section shall include
prominently on the cover page or otherwise at the beginning of such communication:
(i) The issuing entity's name and the depositor's name, if applicable;
(ii) The Commission file number for the related registration
statement;
(iii) A statement that such communication is ABS informational and
computational material used in reliance on Securities Act Rule 167 (§ 230.167);
and
(iv) A legend that urges investors to read the relevant documents filed or
to be filed with the Commission because they contain important information. The legend also
shall explain to investors that they can get the documents for free at the Commission's Web
site and describe which documents are available free from the issuer or an underwriter.
(c) This section is applicable not only to the offeror of the asset-backed
securities, but also to any other participant that may need to rely on and complies with
this section in communicating about the transaction. A participant for purposes of this
section is any person or entity that is a party to the asset-backed securities transaction
and any persons authorized to act on their behalf.
(d) Failure by a particular underwriter to cause the filing of a
prospectus described in this section will not affect the ability of any other underwriter
who has complied with the procedures to rely on the exemption.
(e) An immaterial or unintentional failure to file or delay in filing a
prospectus described in this section will not result in a violation of section 5(b)(1) of
the Act (15 U.S.C. 77e(b)(1)), so long as:
(1) A good faith and reasonable effort was made to comply with the filing
requirement; and
(2) The prospectus is filed as soon as practicable after discovery of the
failure to file.
(f) Terms used in this section have the same meaning as in Item 1101 of
Regulation AB (§ 229.1101 of this chapter).
[70 FR 1615, Jan. 7, 2005, as amended at 79 FR
57183, Sept. 24, 2014]
230.168 — Exemption from sections 2(a)(10) and 5(c) of the Act for certain communications of regularly released factual business information and forward-looking information.
|
Preliminary Notes to § 230.168.
1. This section is not available for any communication that,
although in technical compliance with this section, is part of a plan or scheme
to evade the requirements of section 5 of the Act.
2. This section provides a non-exclusive safe harbor for
factual business information and forward-looking information released or
disseminated as provided in this section. Attempted compliance with this section
does not act as an exclusive election and the issuer also may claim the
availability of any other applicable exemption or exclusion. Reliance on this
section does not affect the availability of any other exemption or exclusion
from the definition of prospectus in section 2(a)(10) or the requirements of
section 5 of the Act.
3. The availability of this section for a release or
dissemination of a communication that contains or incorporates factual business
information or forward-looking information will not be affected by another
release or dissemination of a communication that contains all or a portion of
the same factual business information or forward-looking information that does
not satisfy the conditions of this section.
|
(a) For purposes of sections 2(a)(10) and 5(c) of the Act, the regular
release or dissemination by or on behalf of an issuer (and, in the case of an asset-backed
issuer, the other persons specified in paragraph (a)(3) of this section) of communications
containing factual business information or forward-looking information shall be deemed not
to constitute an offer to sell or offer for sale of a security which is the subject of an
offering pursuant to a registration statement that the issuer proposes to file, or has
filed, or that is effective, if the conditions of this section are satisfied by any of the
following:
(1) An issuer that is required to file reports pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d));
(2) A foreign private issuer that:
(i) Meets all of the registrant requirements of Form F-3 (§ 239.33 of this
chapter) other than the reporting history provisions of General Instructions I.A.1. and
I.A.2.(a) of Form F-3;
(ii) Either:
(A) Satisfies the public float threshold in General Instruction I.B.1. of
Form F-3; or
(B) Is issuing non-convertible securities, other than common equity, and
meets the provisions of General Instruction I.B.2. of Form F-3 (referenced in 17 CFR 239.33
of this chapter); and
(iii) Either:
(A) Has its equity securities trading on a designated offshore securities
market as defined in Rule 902(b) (§ 230.902(b)) and has had them so traded for at least 12
months; or
(B) Has a worldwide market value of its outstanding common equity held by
non-affiliates of $700 million or more; or
(3) An asset-backed issuer or a depositor, sponsor, or servicer (as such
terms are defined in Item 1101 of Regulation AB (§ 229.1101 of this chapter)) or an
affiliated depositor, whether or not such other person is the issuer.
(b) Definitions.
(1) Factual business information means some or all of the following
information that is released or disseminated under the conditions in paragraph (d) of this
section, including, without limitation, such factual business information contained in
reports or other materials filed with, furnished to, or submitted to the Commission pursuant
to the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) or the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.):
(i) Factual information about the issuer, its business or financial
developments, or other aspects of its business;
(ii) Advertisements of, or other information about, the issuer's products
or services; and
(iii) Dividend notices.
(2) Forward-looking information means some or all of the following
information that is released or disseminated under the conditions in paragraph (d) of this
section, including, without limitation, such forward-looking information contained in
reports or other materials filed with, furnished to, or submitted to the Commission pursuant
to the Securities Exchange Act of 1934 or pursuant to the Investment Company Act of
1940:
(i) Projections of the issuer's revenues, income (loss), earnings (loss)
per share, capital expenditures, dividends, capital structure, or other financial items;
(ii) Statements about the issuer management's plans and objectives for
future operations, including plans or objectives relating to the products or services of the
issuer;
(iii) Statements about the issuer's future economic performance, including
statements of the type contemplated by the management's discussion and analysis of financial
condition and results of operation described in Item 303 of Regulations S-B and S-K (§
228.303 and § 229.303 of this chapter) or the operating and financial review and prospects
described in Item 5 of Form 20-F (§ 249.220f of this chapter); and
(iv) Assumptions underlying or relating to any of the information
described in paragraphs (b)(2)(i), (b)(2)(ii) and (b)(2)(iii) of this section.
(3) For purposes of this section, the release or dissemination of a
communication is by or on behalf of the issuer if the issuer or an agent or representative
of the issuer, other than an offering participant who is an underwriter or dealer,
authorizes or approves such release or dissemination before it is made.
(4) For purposes of this section, in the case of communications of a
person specified in paragraph (a)(3) of this section other than the asset-backed issuer, the
release or dissemination of a communication is by or on behalf of such other person if such
other person or its agent or representative, other than an underwriter or dealer, authorizes
or approves such release or dissemination before it is made.
(c) Exclusion. A communication containing information about the
registered offering or released or disseminated as part of the offering activities in the
registered offering is excluded from the exemption of this section.
(d) Conditions to exemption. The following conditions must be
satisfied:
(1) The issuer (or in the case of an asset-backed issuer, the issuer and
the other persons specified in paragraph (a)(3) of this section, taken together) has
previously released or disseminated information of the type described in this section in the
ordinary course of its business;
(2) The timing, manner, and form in which the information is released or
disseminated is consistent in material respects with similar past releases or
disseminations; and
(3) The issuer is not an investment company registered under the
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), other than a registered
closed-end investment company.
[70 FR 44807, Aug. 3, 2005, as amended at 76 FR 46617, Aug. 3, 2011; 85 FR
33290, June 1, 2020]
230.169 — Exemption from sections 2(a)(10) and 5(c) of the Act for certain communications of regularly released factual business information.
|
Preliminary Notes to § 230.169.
1. This section is not available for any communication that,
although in technical compliance with this section, is part of a plan or scheme
to evade the requirements of section 5 of the Act.
2. This section provides a non-exclusive safe harbor for
factual business information released or disseminated as provided in this
section. Attempted compliance with this section does not act as an exclusive
election and the issuer also may claim the availability of any other applicable
exemption or exclusion. Reliance on this section does not affect the
availability of any other exemption or exclusion from the definition of
prospectus in section 2(a)(10) or the requirements of section 5 of the Act.
3. The availability of this section for a release or
dissemination of a communication that contains or incorporates factual business
information will not be affected by another release or dissemination of a
communication that contains all or a portion of the same factual business
information that does not satisfy the conditions of this section.
|
(a) For purposes of sections 2(a)(10) and 5(c) of the Act, the regular
release or dissemination by or on behalf of an issuer of communications containing factual
business information shall be deemed not to constitute an offer to sell or offer for sale of
a security by an issuer which is the subject of an offering pursuant to a registration
statement that the issuer proposes to file, or has filed, or that is effective, if the
conditions of this section are satisfied.
(b) Definitions.
(1) Factual business information means some or all of the following
information that is released or disseminated under the conditions in paragraph (d) of this
section:
(i) Factual information about the issuer, its business or financial
developments, or other aspects of its business; and
(ii) Advertisements of, or other information about, the issuer's products
or services.
(2) For purposes of this section, the release or dissemination of a
communication is by or on behalf of the issuer if the issuer or an agent or representative
of the issuer, other than an offering participant who is an underwriter or dealer,
authorizes or approves such release or dissemination before it is made.
(c) Exclusions. A communication containing information about the
registered offering or released or disseminated as part of the offering activities in the
registered offering is excluded from the exemption of this section.
(d) Conditions to exemption. The following conditions must be
satisfied:
(1) The issuer has previously released or disseminated information of the
type described in this section in the ordinary course of its business;
(2) The timing, manner, and form in which the information is released or
disseminated is consistent in material respects with similar past releases or
disseminations;
(3) The information is released or disseminated for intended use by
persons, such as customers and suppliers, other than in their capacities as investors or
potential investors in the issuer's securities, by the issuer's employees or agents who
historically have provided such information; and
(4) The issuer is not an investment company registered under the
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), other than a registered
closed-end investment company.
[70 FR 44808, Aug. 3, 2005; as amended at 85 FR 33290, June 1, 2020]
230.170 — Prohibition of use of certain financial statements.
Financial statements which purport to give effect to the receipt and
application of any part of the proceeds from the sale of securities for cash shall not be
used unless such securities are to be offered through underwriters and the underwriting
arrangements are such that the underwriters are or will be committed to take and pay for all
of the securities, if any are taken, prior to or within a reasonable time after the
commencement of the public offering, or if the securities are not so taken to refund to all
subscribers the full amount of all subscription payments made for the securities. The
caption of any such financial statement shall clearly set forth the assumptions upon which
such statement is based. The caption shall be in type at least as large as that used
generally in the body of the statement.
[21 FR 7566, Oct. 3, 1956]
230.171 — Disclosure detrimental to the national defense or foreign policy.
(a) Any requirement to the contrary notwithstanding, no registration
statement, prospectus, or other document filed with the Commission or used in connection
with the offering or sale of any securities shall contain any document or information which,
pursuant to Executive order, has been classified by an appropriate department or agency of
the United States for protection in the interests of national defense or foreign policy.
(b) Where a document or information is omitted pursuant to paragraph (a)
of this section, there shall be filed, in lieu of such document or information, a statement
from an appropriate department or agency of the United States to the effect that such
document or information has been classified or that the status thereof is awaiting
determination. Where a document is omitted pursuant to paragraph (a) of this section, but
information relating to the subject matter of such document is nevertheless included in
material filed with the Commission pursuant to a determination of an appropriate department
or agency of the United States that disclosure of such information would not be contrary to
the interests of national defense or foreign policy, a statement from such department or
agency to that effect shall be submitted for the information of the Commission. A registrant
may rely upon any such statement in filing or omitting any document or information to which
the statement relates.
(c) The Commission may protect any information in its possession which may
require classification in the interests of national defense or foreign policy pending
determination by an appropriate department or agency as to whether such information should
be classified.
(d) It shall be the duty of the registrant to submit the documents or
information referred to in paragraph (a) of this section to the appropriate department or
agency of the United States prior to filing them with the Commission and to obtain and
submit to the Commission, at the time of filing such documents or information, or in lieu
thereof, as the case may be, the statements from such department or agency required by
paragraph (b) of this section. All such statements shall be in writing.
[33 FR 7682, May 24, 1968]
230.172 — Delivery of prospectuses.
(a) Sending confirmations and notices of allocations. After the
effective date of a registration statement, the following are exempt from the provisions of
section 5(b)(1) of the Act if the conditions set forth in paragraph (c) of this section are
satisfied:
(1) Written confirmations of sales of securities in an offering pursuant
to a registration statement that contain information limited to that called for in Rule
10b-10 under the Securities Exchange Act of 1934 (§ 240.10b-10 of this chapter) and other
information customarily included in written confirmations of sales of securities, which may
include notices provided pursuant to Rule 173 (§ 230.173); and
(2) Notices of allocation of securities sold or to be sold in an offering
pursuant to the registration statement that may include information identifying the
securities (including the CUSIP number) and otherwise may include only information regarding
pricing, allocation and settlement, and information incidental thereto.
(b) Transfer of the security. Any obligation under section 5(b)(2)
of the Act to have a prospectus that satisfies the requirements of section 10(a) of the Act
precede or accompany the carrying or delivery of a security in a registered offering is
satisfied if the conditions in paragraph (c) of this section are met.
(c) Conditions. (1) The registration statement relating to the
offering is effective and is not the subject of any pending proceeding or examination under
section 8(d) or 8(e) of the Act;
(2) Neither the issuer, nor an underwriter or participating dealer is the
subject of a pending proceeding under section 8A of the Act in connection with the offering;
and
(3) The issuer has filed with the Commission a prospectus with respect to
the offering that satisfies the requirements of section 10(a) of the Act or the issuer will
make a good faith and reasonable effort to file such a prospectus within the time required
under Rule 424 (§ 230.424) and, in the event that the issuer fails to file timely such a
prospectus, the issuer files the prospectus as soon as practicable thereafter.
(4) The condition in paragraph (c)(3) of this section shall not apply to
transactions by dealers requiring delivery of a final prospectus pursuant to section 4(3) of
the Act.
(d) Exclusions. This section shall not apply to any:
(1) Offering of any investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1et seq.), other than a registered closed-end
investment company;
(2) A business combination transaction as defined in § 230.165(f)(1);
(3) Offering registered on Form S-8 (§ 239.16b of this chapter); or
(4) Offering of any registered non-variable annuity securities.
[70 FR 44808, Aug. 3, 2005; as amended at 85 FR 33290, June 1, 2020; 89 FR
59978, July 24, 2024]
230.173 — Notice of registration.
(a) In a transaction that represents a sale by the issuer or an
underwriter, or a sale where there is not an exclusion or exemption from the requirement to
deliver a final prospectus meeting the requirements of section 10(a) of the Act pursuant to
section 4(3) of the Act or Rule 174 (§ 230.174), each underwriter or dealer selling in such
transaction shall provide to each purchaser from it, not later than two business days
following the completion of such sale, a copy of the final prospectus or, in lieu of such
prospectus, a notice to the effect that the sale was made pursuant to a registration
statement or in a transaction in which a final prospectus would have been required to have
been delivered in the absence of Rule 172 (§ 230.172).
(b) If the sale was by the issuer and was not effected by or through an
underwriter or dealer, the responsibility to send a prospectus, or in lieu of such
prospectus, such notice as set forth in paragraph (a) of this section, shall be the
issuer's.
(c) Compliance with the requirements of this section is not a condition to
reliance on Rule 172.
(d) A purchaser may request from the person responsible for sending a
notice a copy of the final prospectus if one has not been sent.
(e) After the effective date of the registration statement with respect to
an offering, notices as set forth in paragraph (a) of this section, are exempt from the
provisions of section 5(b)(1) of the Act.
(f) Exclusions. This section shall not apply to any:
(1) Transaction solely between brokers or dealers in reliance on Rule 153
(§ 230.153);
(2) Offering of an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.), other than a registered closed-end
investment company;
(3) A business combination transaction as defined in § 230.165(f)(1) (Rule
165(f)(1)); or
(4) Offering registered on Form S-8 (§ 239.16b of this chapter).
[70 FR 44809, Aug. 3, 2005; as amended at 85 FR 33290, June 1, 2020]
230.174 — Delivery of prospectus by dealers; exemptions under section 4(3) of the Act.
The obligations of a dealer (including an underwriter no longer acting as
an underwriter in respect of the security involved in such transactions) to deliver a
prospectus in transactions in a security as to which a registration statement has been filed
taking place prior to the expiration of the 40- or 90-day period specified in section 4(3)
of the Act after the effective date of such registration statement or prior to the
expiration of such period after the first date upon which the security was bona fide offered
to the public by the issuer or by or through an underwriter after such effective date,
whichever is later, shall be subject to the following provisions:
(a) No prospectus need be delivered if the registration statement is on
Form F-6 (§ 239.36 of this chapter).
(b) No prospectus need be delivered if the issuer is subject, immediately
prior to the time of filing the registration statement, to the reporting requirements of
section 13 or 15(d) of the Securities Exchange Act of 1934.
(c) Where a registration statement relates to offerings to be made from
time to time no prospectus need be delivered after the expiration of the initial prospectus
delivery period specified in section 4(3) of the Act following the first bona fide offering
of securities under such registration statement.
(d) If (1) the registration statement relates to the security of an issuer
that is not subject, immediately prior to the time of filing the registration statement, to
the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934,
and (2) as of the offering date, the security is listed on a registered national securities
exchange or authorized for inclusion in an electronic inter-dealer quotation system
sponsored and governed by the rules of a registered securities association, no prospectus
need be delivered after the expiration of twenty-five calendar days after the offering date.
For purposes of this provision, the term offering date refers to the later of the
effective date of the registration statement or the first date on which the security was
bona fide offered to the public.
(e) Notwithstanding the foregoing, the period during which a prospectus
must be delivered by a dealer shall be:
(1) As specified in section 4(3) of the Act if the registration statement
was the subject of a stop order issued under section 8 of the Act; or
(2) As the Commission may provide upon application or on its own motion in
a particular case.
(f) Nothing in this section shall affect the obligation to deliver a
prospectus pursuant to the provisions of section 5 of the Act by a dealer who is acting as
an underwriter with respect to the securities involved or who is engaged in a transaction 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 the issuer or by or
through an underwriter.
(g) If the registration statement relates to an offering of securities of
a “blank check company,” as defined in Rule 419 under the Act (17 CFR 230.419), the
statutory period for prospectus delivery specified in section 4(3) of the Act shall not
terminate until 90 days after the date funds and securities are released from the escrow or
trust account pursuant to Rule 419 under the Act.
(h) Any obligation pursuant to Section 4(3) of the Act and this section to
deliver a prospectus, other than pursuant to paragraph (g) of this section, may be satisfied
by compliance with the provisions of Rule 172 (§ 230.172).
[35 FR 18457, Dec. 4, 1970, as amended at 48 FR
12347, Mar. 24, 1983; 53 FR 11845, Apr. 11, 1988; 57 FR 18043, Apr. 28, 1992; 70 FR 44809,
Aug. 3, 2005]
230.175 — Liability for certain statements by issuers.
(a) A statement within the coverage of paragraph (b) of this section which
is made by or on behalf of an issuer or by an outside reviewer retained by the issuer shall
be deemed not to be a fraudulent statement (as defined in paragraph (d) of this section),
unless it is shown that such statement was made or reaffirmed without a reasonable basis or
was disclosed other than in good faith.
(b) This rule applies to the following statements:
(1) A forward-looking statement (as defined in paragraph (c) of this
section) made in a document filed with the Commission, in Part I of a quarterly report on
Form 10-Q, (§ 249.308a of this chapter), or in an annual report to security holders meeting
the requirements of Rule 14a-3(b) and (c) or 14c-3(a) and (b) under the Securities Exchange
Act of 1934 (§§ 240.14a-3(b) and (c) or 240.14c-3(a) and (b) of this chapter), a statement
reaffirming such forward-looking statement after the date the document was filed or the
annual report was made publicly available, or a forward-looking statement made before the
date the document was filed or the date the annual report was publicly available if such
statement is reaffirmed in a filed document, in Part I of a quarterly report on Form 10-Q,
or in an annual report made publicly available within a reasonable time after the making of
such forward-looking statement; Provided, that
(i) At the time such statements are made or reaffirmed, either the issuer
is subject to the reporting requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and has complied with the requirements of Rule 13a-1 or 15d-1 (§§
239.13a-1 or 239.15d-1 of this chapter) thereunder, if applicable, to file its most recent
annual report on Form 10-K, Form 20-F, or Form 40-F; or if the issuer is not subject to the
reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, the
statements are made in a registration statement filed under the Act, offering statement or
solicitation of interest, written document or broadcast script under Regulation A or
pursuant to sections 12(b) or (g) of the Securities Exchange Act of 1934; and
(ii) The statements are not made by or on behalf of an issuer that is an
investment company registered under the Investment Company Act of 1940; and
(2) Information that is disclosed in a document filed with the Commission,
in Part I of a quarterly report on Form 10-Q (§ 249.308a of this chapter) or in an annual
report to shareholders meeting the requirements of Rules 14a-3 (b) and (c) or 14c-3 (a) and
(b) under the Securities Exchange Act of 1934 (§§ 240.14a-3(b) and (c) or 240.14c-3(a) and
(b) of this chapter) and that relates to:
(i) The effects of changing prices on the business enterprise, presented
voluntarily or pursuant to Item 303 of Regulation S-K (§ 229.303 of this chapter),
“Management's Discussion and Analysis of Financial Condition and Results of Operations,”
Item 5 of Form 20-F (§ 249.220(f) of this chapter), “Operating and Financial Review and
Prospects,” Item 302 of Regulation S-K (§ 229.302 of this chapter), “Supplementary Financial
Information,” or Rule 3-20(c) of Regulation S-X (§ 210.3-20(c) of this chapter); or
(ii) The value of proved oil and gas reserves (such as a standardized
measure of discounted future net cash flows relating to proved oil and gas reserves as set
forth in FASB ASC paragraphs 932-235-50-29 through 932-235-50-36 (Extractive Activities —
Oil and Gas Topic) presented voluntarily or pursuant to Item 302 of Regulation S-K (§
229.302 of this chapter).
(c) For the purpose of this rule, the term forward-looking
statement shall mean and shall be limited to:
(1) A statement containing a projection of revenues, income (loss),
earnings (loss) per share, capital expenditures, dividends, capital structure or other
financial items;
(2) A statement of management's plans and objectives for future
operations;
(3) A statement of future economic performance contained in management's
discussion and analysis of financial condition and results of operations included pursuant
to Item 303 of Regulation S-K (§ 229.303 of this chapter) or Item 9 of Form 20-F; or Item 5
of Form 20-F.
(4) Disclosed statements of the assumptions underlying or relating to any
of the statements described in paragraphs (c) (1), (2), or (3) of this section.
(d) For the purpose of this rule the term fraudulent statement
shall mean a statement which is an untrue statement of a material fact, a statement false or
misleading with respect to any material fact, an omission to state a material fact necessary
to make a statement not misleading, or which constitutes the employment of a manipulative,
deceptive, or fraudulent device, contrivance, scheme, transaction, act, practice, course of
business, or an artifice to defraud, as those terms are used in the Securities Act of 1933
or the rules or regulations promulgated thereunder.
[46 FR 13990, Feb. 25, 1981, as amended at 46 FR
19457, Mar. 31, 1981; 47 FR 54770, Dec. 6, 1982; 48 FR 19875, May 3, 1983; 56 FR 30054,
July 1, 1991; 57 FR 36468, Aug. 13, 1992; 64 FR 53909, Oct. 5, 1999; 73 FR 967, Jan. 4,
2008; 76 FR 50121, Aug. 12, 2011]
230.176 — Circumstances affecting the determination of what constitutes reasonable investigation and reasonable grounds for belief under section 11 of the Securities Act.
In determining whether or not the conduct of a person constitutes a
reasonable investigation or a reasonable ground for belief meeting the standard set forth in
section 11(c), relevant circumstances include, with respect to a person other than the
issuer.
(a) The type of issuer;
(b) The type of security;
(c) The type of person;
(d) The office held when the person is an officer;
(e) The presence or absence of another relationship to the issuer when the
person is a director or proposed director;
(f) Reasonable reliance on officers, employees, and others whose duties
should have given them knowledge of the particular facts (in the light of the functions and
responsibilities of the particular person with respect to the issuer and the filing);
(g) When the person is an underwriter, the type of underwriting
arrangement, the role of the particular person as an underwriter and the availability of
information with respect to the registrant; and
(h) Whether, with respect to a fact or document incorporated by reference,
the particular person had any responsibility for the fact or document at the time of the
filing from which it was incorporated.
[47 FR 11433, Mar. 16, 1982, as amended at 76 FR
71876, Nov. 21, 2011]
230.180 — Exemption from registration of interests and participations issued in connection with certain H.R. 10 plans.
(a) Any interest or participation in a single trust fund or in a
collective trust fund maintained by a bank, or any security arising out of a contract issued
by an insurance company, issued to an employee benefit plan shall be exempt from the
provisions of section 5 of the Act if the following terms and conditions are met:
(1) The plan covers employees, some or all of whom are employees within
the meaning of section 401(c)(1) of the Internal Revenue Code of 1954, and is either: (i) A
pension or profit-sharing plan which meets the requirements for qualification under section
401 of such Code, or (ii) an annuity plan which meets the requirements for the deduction of
the employer's contribution under section 404(a)(2) of such Code;
(2) The plan covers only employees of a single employer or employees of
interrelated partnerships; and
(3) The issuer of such interest, participation or security shall have
reasonable grounds to believe and, after making reasonable inquiry, shall believe
immediately prior to any issuance that:
(i) The employer is a law firm, accounting firm, investment banking firm,
pension consulting firm or investment advisory firm that is engaged in furnishing services
of a type that involve such knowledge and experience in financial and business matters that
the employer is able to represent adequately its interests and those of its employees;
or
(ii) In connection with the plan, the employer prior to adopting the plan
obtains the advice of a person or entity that (A) is not a financial institution providing
any funding vehicle for the plan, and is neither an affiliated person as defined in section
2(a)(3) of the Investment Company Act of 1940 of, nor a person who has a material business
relationship with, a financial institution providing a funding vehicle for the plan; and (B)
is, by virtue of knowledge and experience in financial and business matters, able to
represent adequately the interests of the employer and its employees.
(b) Any interest or participation issued to a participant in either a
pension or profit-sharing plan which meets the requirements for qualification under section
401 of the Internal Revenue Code of 1954 or an annuity plan which meets the requirements for
the deduction of the employer's contribution under section 404(a)(2) of such Code, and which
covers employees, some or all of whom are employees within the meaning of section 401(c)(1)
of such Code, shall be exempt from the provisions of section 5 of the Act.
[46 FR 58291, Dec. 1, 1981]
230.190 — Registration of underlying securities in asset-backed securities transactions.
(a) In an offering of asset-backed securities where the asset pool
includes securities of another issuer (“underlying securities”), unless the underlying
securities are themselves exempt from registration under section 3 of the Act (15 U.S.C.
77c), the offering of the relevant underlying securities itself must be registered as a
primary offering of such securities in accordance with paragraph (b) of this section unless
all of the following are true. Terms used in this section have the same meaning as in Item
1101 of Regulation AB (§ 229.1101 of this chapter).
(1) Neither the issuer of the underlying securities nor any of its
affiliates has a direct or indirect agreement, arrangement, relationship or understanding,
written or otherwise, relating to the underlying securities and the asset-backed securities
transaction;
(2) Neither the issuer of the underlying securities nor any of its
affiliates is an affiliate of the sponsor, depositor, issuing entity or underwriter of the
asset-backed securities transaction;
(3) If the underlying securities are restricted securities, as defined in
§ 230.144(a)(3), § 230.144 must be available for the sale of the securities, provided
however, that notwithstanding any other provision of § 230.144, § 230.144 shall only be so
available if at least two years have elapsed since the later of the date the securities were
acquired from the issuer of the underlying securities or from an affiliate of the issuer of
the underlying securities; and
(4) The depositor would be free to publicly resell the underlying
securities without registration under the Act. For example, the offering of the asset-backed
security does not constitute part of a distribution of the underlying securities. An
offering of asset-backed securities with an asset pool containing underlying securities that
at the time of the purchase for the asset pool are part of a subscription or unsold
allotment would be a distribution of the underlying securities. For purposes of this
section, in an offering of asset-backed securities involving a sponsor, depositor or
underwriter that was an underwriter or an affiliate of an underwriter in a registered
offering of the underlying securities, the distribution of the asset-backed securities will
not constitute part of a distribution of the underlying securities if the underlying
securities were purchased at arm's length in the secondary market at least three months
after the last sale of any unsold allotment or subscription by the affiliated underwriter
that participated in the registered offering of the underlying securities.
(b) If all of the conditions in paragraph (a) of this section are not met,
the offering of the relevant underlying securities itself must be registered as a primary
offering of such securities in accordance with the following:
(1) If the offering of asset-backed securities is registered on Form SF-3
(§ 239.45 of this chapter), the offering of the underlying securities itself must be
eligible to be registered under Form SF-3, Form S-3 (§ 239.13 of this chapter), or F-3 (§
239.33 of this chapter) as a primary offering of such securities;
(2) The plan of distribution in the registration statement for the
offering of the underlying securities contemplates this type of distribution at the time of
the commencement of the offering trfgwof the asset-backed securities;
(3) The prospectus for the asset-backed securities offering describes the
plan of distribution for both the underlying securities and the asset-backed securities;
(4) The prospectus relating to the offering of the underlying securities
is delivered simultaneously with the delivery of the prospectus relating to the offering of
the asset-backed securities, and the prospectus for the asset-backed securities includes
disclosure that the prospectus for the offering of the underlying securities will be
delivered along with, or is combined with, the prospectus for the offering of the
asset-backed securities;
(5) The prospectus for the asset-backed securities offering identifies the
issuing entity, depositor, sponsor and each underwriter for the offering of the asset-backed
securities as an underwriter for the offering of the underlying securities; and
(6) Neither prospectus disclaims or limits responsibility by the issuing
entity, sponsor, depositor, trustee or any underwriter for information regarding the
underlying securities.
(c) Notwithstanding paragraphs (a) and (b) of this section, if the asset
pool for the asset-backed securities includes a pool asset representing an interest in or
the right to the payments or cash flows of another asset pool, then that pool asset is not
considered an “underlying security” for purposes of this section (although its distribution
in connection with the asset-backed securities transaction may need to be separately
registered) if the following conditions are met:
(1) Both the issuing entity for the asset-backed securities and the entity
issuing the pool asset were established under the direction of the same sponsor and
depositor;
(2) The pool asset is created solely to satisfy legal requirements or
otherwise facilitate the structuring of the asset-backed securities transaction;
(3) The pool asset is not part of a scheme to avoid registration or the
requirements of this section; and
(4) The pool asset is held by the issuing entity and is a part of the
asset pool for the asset-backed securities.
(d) Notwithstanding paragraph (c) of this section (that is, although the
pool asset described in paragraph (c) of this section is an not an “underlying security” for
purposes of this section), if the pool assets for the asset-backed securities are collateral
certificates or special units of beneficial interest, those collateral certificates or
special units of beneficial interest must be registered concurrently with the registration
of the asset-backed securities. However, pursuant to § 230.457(t) no separate registration
fee for the certificates or special units of beneficial interest is required to be paid.
[70 FR 1615, Jan. 7, 2005, as amended at 72 FR
71571, Dec. 17, 2007; 79 FR 57183, Sept. 24, 2014]
230.191 — Definition of “issuer” in section 2(a)(4) of the Act in relation to asset-backed securities.
The following applies with respect to asset-backed securities under the
Act. Terms used in this section have the same meaning as in Item 1101 of Regulation AB (§
229.1101 of this chapter).
(a) The depositor for the asset-backed securities acting solely in its
capacity as depositor to the issuing entity is the “issuer” for purposes of the asset-backed
securities of that issuing entity.
(b) The person acting in the capacity as the depositor specified in
paragraph (a) of this section is a different “issuer” from that same person acting as a
depositor for another issuing entity or for purposes of that person's own securities.
[70 FR 1615, Jan. 7, 2005]
230.192 — Conflicts of interest relating to certain securitizations.
(a) Unlawful activity —(1) Prohibition. A securitization participant shall
not, for a period commencing on the date on which such person has reached an agreement
that such person will become a securitization participant with respect to an asset-backed
security and ending on the date that is one year after the date of the first closing of
the sale of such asset-backed security, directly or indirectly engage in any transaction
that would involve or result in any material conflict of interest between the
securitization participant and an investor in such asset-backed security.
(2) Material conflict of interest. For purposes of this section, engaging in any
transaction would involve or result in a material conflict of interest between a
securitization participant for an asset-backed security and an investor in such
asset-backed security if such a transaction is a conflicted transaction.
(3) Conflicted transaction. For purposes of this section, a conflicted transaction
means any of the following transactions with respect to which there is a substantial
likelihood that a reasonable investor would consider the transaction important to the
investor's investment decision, including a decision whether to retain the asset-backed
security:
(i) A short sale of the relevant asset-backed security;
(ii) The purchase of a credit default swap or other credit derivative pursuant to which
the securitization participant would be entitled to receive payments upon the occurrence
of specified credit events in respect of the relevant asset-backed security; or
(iii) The purchase or sale of any financial instrument (other than the relevant
asset-backed security) or entry into a transaction that is substantially the economic
equivalent of a transaction described in paragraph (a)(3)(i) or (a)(3)(ii) of this
section, other than, for the avoidance of doubt, any transaction that only hedges general
interest rate or currency exchange risk.
(b) Excepted activity. The following activities are not prohibited by paragraph
(a) of this section:
(1) Risk-mitigating hedging activities —(i) Permitted risk-mitigating hedging
activities. Risk-mitigating hedging activities of a securitization participant
conducted in accordance with this paragraph (b)(1) in connection with and related to
individual or aggregated positions, contracts, or other holdings of the securitization
participant, including those arising out of its securitization activities, such as the
origination or acquisition of assets that it securitizes.
(ii) Conditions. Risk-mitigating hedging activities are permitted under paragraph
(b)(1) of this section only if:
(A) At the inception of the hedging activity and at the time of any adjustments to the
hedging activity, the risk-mitigating hedging activity is designed to reduce or otherwise
significantly mitigate one or more specific, identifiable risks arising in connection with
and related to identified positions, contracts, or other holdings of the securitization
participant, based upon the facts and circumstances of the identified underlying and
hedging positions, contracts or other holdings and the risks and liquidity thereof;
(B) The risk-mitigating hedging activity is subject, as appropriate, to ongoing
recalibration by the securitization participant to ensure that the hedging activity
satisfies the requirements set out in paragraph (b)(1) of this section and does not
facilitate or create an opportunity to materially benefit from a conflicted transaction
other than through risk-reduction; and
(C) The securitization participant has established, and implements, maintains, and
enforces, an internal compliance program that is reasonably designed to ensure the
securitization participant's compliance with the requirements set out in paragraph (b)(1)
of this section, including reasonably designed written policies and procedures regarding
the risk-mitigating hedging activities that provide for the specific risk and
risk-mitigating hedging activity to be identified, documented, and monitored.
(2) Liquidity commitments. Purchases or sales of the asset-backed security made
pursuant to, and consistent with, commitments of the securitization participant to provide
liquidity for the asset-backed security.
(3) Bona fide market-making activities —(i) Permitted bona fide market-making
activities. Bona fide market-making activities, including market-making related
hedging, of the securitization participant conducted in accordance with this paragraph
(b)(3) in connection with and related to asset-backed securities with respect to which the
prohibition in paragraph (a)(1) of this section applies, the assets underlying such
asset-backed securities, or financial instruments that reference such asset-backed
securities or underlying assets or with respect to which the prohibition in paragraph
(a)(1) of this section otherwise applies, except that the initial distribution of an
asset-backed security is not bona fide market-making activity for purposes of paragraph
(b)(3) of this section.
(ii) Conditions. Bona fide market-making activities are permitted under paragraph
(b)(3) of this section only if:
(A) The securitization participant routinely stands ready to purchase and sell one or
more types of the financial instruments described in paragraph (b)(3)(i) of this section
as a part of its market-making related activities in such financial instruments, and is
willing and available to quote, purchase and sell, or otherwise enter into long and short
positions in those types of financial instruments, in commercially reasonable amounts and
throughout market cycles on a basis appropriate for the liquidity, maturity, and depth of
the market for the relevant types of financial instruments;
(B) The securitization participant's market-making related activities are designed not to
exceed, on an ongoing basis, the reasonably expected near term demands of clients,
customers, or counterparties, taking into account the liquidity, maturity, and depth of
the market for the relevant types of financial instruments described in paragraph
(b)(3)(i) of this section;
(C) The compensation arrangements of persons performing the foregoing activity are
designed not to reward or incentivize conflicted transactions;
(D) The securitization participant is licensed or registered, if required, to engage in
the activity described in paragraph (b)(3) of this section in accordance with applicable
law and self-regulatory organization rules; and
(E) The securitization participant has established, and implements, maintains, and
enforces, an internal compliance program that is reasonably designed to ensure the
securitization participant's compliance with the requirements of paragraph (b)(3) of this
section, including reasonably designed written policies and procedures that demonstrate a
process for prompt mitigation of the risks of its market-making positions and
holdings.
(c) Definitions. For purposes of this section:
Asset-backed security has the same meaning as in section 3(a)(79) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(79)), and also includes a synthetic
asset-backed security and a hybrid cash and synthetic asset-backed security.
Distribution means:
(i) An offering of securities, whether or not subject to registration under the
Securities Act of 1933, that is distinguished from ordinary trading transactions by the
presence of special selling efforts and selling methods; or
(ii) An offering of securities made pursuant to an effective registration statement under
the Securities Act of 1933.
Initial purchaser means a person who has agreed with an issuer to purchase a
security from the issuer for resale to other purchasers in transactions that are not
required to be registered under the Securities Act in reliance upon 17 CFR 230.144A or
that are otherwise not required to be registered because they do not involve any public
offering.
Placement agent and underwriter each mean a person who has agreed with an
issuer or selling security holder to:
(i) Purchase securities from the issuer or selling security holder for distribution;
(ii) Engage in a distribution for or on behalf of such issuer or selling security holder;
or
(iii) Manage or supervise a distribution for or on behalf of such issuer or selling
security holder.
Securitization participant means:
(i) An underwriter, placement agent, initial purchaser, or sponsor of an asset-backed
security; or
(ii) Any affiliate (as defined in 17 CFR 230.405) or subsidiary (as defined in 17 CFR
230.405) of a person described in paragraph (i) of this definition if the affiliate or
subsidiary:
(A) Acts in coordination with a person described in paragraph (i) of this definition;
or
(B) Has access to or receives information about the relevant asset-backed security or the
asset pool underlying or referenced by the relevant asset-backed security prior to the
first closing of the sale of the relevant asset-backed security.
Sponsor means:
(i) Any person who organizes and initiates an asset-backed securities transaction by
selling or transferring assets, either directly or indirectly, including through an
affiliate, to the entity that issues the asset-backed security; or
(ii) Any person with a contractual right to direct or cause the direction of the
structure, design, or assembly of an asset-backed security or the composition of the pool
of assets underlying or referenced by the asset-backed security, other than a person who
acts solely pursuant to such person's contractual rights as a holder of a long position in
the asset-backed security.
(iii) Notwithstanding paragraph (ii) of this definition, a person that performs only
administrative, legal, due diligence, custodial, or ministerial acts related to the
structure, design, assembly, or ongoing administration of an asset-backed security or the
composition of the pool of assets underlying or referenced by the asset-backed security
will not be a sponsor for purposes of this rule.
(iv) Notwithstanding paragraphs (i) and (ii) of this definition, the United States or an
agency of the United States will not be a sponsor for purposes of this rule with respect
to an asset-backed security that is fully insured or fully guaranteed as to the timely
payment of principal and interest by the United States.
(d) Anti-evasion. If a securitization participant engages in a transaction or a
series of related transactions that, although in technical compliance with paragraph (b)
of this section, is part of a plan or scheme to evade the prohibition in paragraph (a)(1)
of this section, that transaction or series of related transactions will be deemed to
violate paragraph (a)(1) of this section.
(e) Safe harbor for certain foreign transactions. The prohibition in paragraph
(a)(1) of this section shall not apply to any asset-backed security for which all of the
following conditions are met:
(1) The asset-backed security (as defined in this section) is not issued by a U.S. person
(as defined in 17 CFR 230.902(k)); and
(2) The offer and sale of the asset-backed security (as defined by this section) is in
compliance with 17 CFR 230.901 through 905 (Regulation S).
[88 FR 85396, Dec. 7, 2023]
230.193 — Review of underlying assets in asset-backed securities transactions.
An issuer of an “asset-backed security,” as that term is defined in
Section 3(a)(79) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(79)), offering and
selling such a security pursuant to a registration statement shall perform a review of the
pool assets underlying the asset-backed security. At a minimum, such review must be designed
and effected to provide reasonable assurance that the disclosure regarding the pool assets
in the form of prospectus filed pursuant to § 230.424 of this chapter is accurate in all
material respects. The issuer may conduct the review or an issuer may employ a third party
engaged for purposes of performing the review. If the findings and conclusions of the review
are attributed to the third party, the third party must be named in the registration
statement and consent to being named as an expert in accordance with § 230.436 of this
chapter.
Instruction to § 230.193: An issuer of an “asset-backed security” may rely on one or
more third parties to fulfill its obligation to perform a review under this section,
provided that the reviews performed by the third parties and the issuer, in the aggregate,
comply with the minimum standard in this section. The issuer must comply with the
requirements of this section for each third party engaged by the issuer to perform the
review for purposes of this section. An issuer may not rely on a review performed by an
unaffiliated originator for purposes of performing the review required under this
section.
[76 FR 4244, Jan. 25, 2011,as amended at 79 FR
57183, Sept. 24, 2014]
230.194 — Definitions of the terms “swap” and “security-based swap” as used in the Act.
(a) The term swap as used in section 2(a)(17) of the Act (15 U.S.C.
77b(a)(17)) has the same meaning as provided in section 3(a)(69) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(69)) and 17 CFR 240.3a69-1 through 240.3a69-3.
(b) The term security-based swap as used in section 2(a)(17) of the
Act (15 U.S.C. 77b(a)(17)) has the same meaning as provided in section 3(a)(68) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(68)) and 17 CFR 240.3a68-1a through
240.3a68-5.
[77 FR 48356, Aug. 13, 2012]
230.215 — Accredited investor.
The term accredited investor as used in section 2(a)(15)(ii) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(15)(ii)) shall have the same meaning as the
definition of that term in rule 501(a) under the Act (17 CFR 230.501(a)).
[47 FR 11261, Mar. 16, 1982, as amended at 53 FR 7868, Mar. 10, 1988; 54 FR
11372, Mar. 20, 1989; 76 FR 81805, Dec. 29, 2011; 85 FR 64234, Oct. 9, 2020]