15 U.S.C. § 77b | Definitions; promotion of efficiency, competition, and capital formation

(a)

Definitions

When used in this subchapter, unless the context otherwise requires—

(1)

The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

(2)

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

(3)

section 77e of this title section 77e(c) of this title The term “sale” or “sell” shall include every contract of sale or disposition of a security or interest in a security, for value. The term “offer to sell”, “offer for sale”, or “offer” shall include every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security, for value. The terms defined in this paragraph and the term “offer to buy” as used in subsection (c) of shall not include preliminary negotiations or agreements between an issuer (or any person directly or indirectly controlling or controlled by an issuer, or under direct or indirect common control with an issuer) and any underwriter or among underwriters who are or are to be in privity of contract with an issuer (or any person directly or indirectly controlling or controlled by an issuer, or under direct or indirect common control with an issuer). Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing, shall be conclusively presumed to constitute a part of the subject of such purchase and to have been offered and sold for value. The issue or transfer of a right or privilege, when originally issued or transferred with a security, giving the holder of such security the right to convert such security into another security of the same issuer or of another person, or giving a right to subscribe to another security of the same issuer or of another person, which right cannot be exercised until some future date, shall not be deemed to be an offer or sale of such other security; but the issue or transfer of such other security upon the exercise of such right of conversion or subscription shall be deemed a sale of such other security. Any offer or sale of a security futures product by or on behalf of the issuer of the securities underlying the security futures product, an affiliate of the issuer, or an underwriter, shall constitute a contract for sale of, sale of, offer for sale, or offer to sell the underlying securities. Any offer or sale of a security-based swap by or on behalf of the issuer of the securities upon which such security-based swap is based or is referenced, an affiliate of the issuer, or an underwriter, shall constitute a contract for sale of, sale of, offer for sale, or offer to sell such securities. The publication or distribution by a broker or dealer of a research report about an emerging growth company that is the subject of a proposed public offering of the common equity securities of such emerging growth company pursuant to a registration statement that the issuer proposes to file, or has filed, or that is effective shall be deemed for purposes of paragraph (10) of this subsection and not to constitute an offer for sale or offer to sell a security, even if the broker or dealer is participating or will participate in the registered offering of the securities of the issuer. As used in this paragraph, the term “research report” means a written, electronic, or oral communication 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.

(4)

The term “issuer” means every person who issues or proposes to issue any security; except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates, or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functions) or of the fixed, restricted management, or unit type, the term “issuer” means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which such securities are issued; except that in the case of an unincorporated association which provides by its articles for limited liability of any or all of its members, or in the case of a trust, committee, or other legal entity, the trustees or members thereof shall not be individually liable as issuers of any security issued by the association, trust, committee, or other legal entity; except that with respect to equipment-trust certificates or like securities, the term “issuer” means the person by whom the equipment or property is or is to be used; and except that with respect to fractional undivided interests in oil, gas, or other mineral rights, the term “issuer” means the owner of any such right or of any interest in such right (whether whole or fractional) who creates fractional interests therein for the purpose of public offering.

(5)

The term “Commission” means the Securities and Exchange Commission.

(6)

The term “Territory” means Puerto Rico, the Virgin Islands, and the insular possessions of the United States.

(7)

The term “interstate commerce” means trade or commerce in securities or any transportation or communication relating thereto among the several States or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia.

(8)

section 77f of this title The term “registration statement” means the statement provided for in , and includes any amendment thereto and any report, document, or memorandum filed as part of such statement or incorporated therein by reference.

(9)

The term “write” or “written” shall include printed, lithographed, or any means of graphic communication.

(10)

section 77j of this title section 77j of this title 1

1 So in original.

section 77j of this title The term “prospectus” means any prospectus, notice, circular, advertisement, letter, or communication, written or by radio or television, which offers any security for sale or confirms the sale of any security; except that (a) a communication sent or given after the effective date of the registration statement (other than a prospectus permitted under subsection (b) of ) shall not be deemed a prospectus if it is proved that prior to or at the same time with such communication a written prospectus meeting the requirements of subsection (a) of at the time of  such communication was sent or given to the person to whom the communication was made, and (b) a notice, circular, advertisement, letter, or communication in respect of a security shall not be deemed to be a prospectus if it states from whom a written prospectus meeting the requirements of may be obtained and, in addition, does no more than identify the security, state the price thereof, state by whom orders will be executed, and contain such other information as the Commission, by rules or regulations deemed necessary or appropriate in the public interest and for the protection of investors, and subject to such terms and conditions as may be prescribed therein, may permit.

(11)

The term “underwriter” means any person who has purchased from an issuer with a view to, or offers or sells 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; but such term shall not include a person whose interest is limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors’ or sellers’ commission. As used in this paragraph the term “issuer” shall include, in addition to an issuer, any person directly or indirectly controlling or controlled by the issuer, or any person under direct or indirect common control with the issuer.

(12)

The term “dealer” means any person who engages either for all or part of his time, directly or indirectly, as agent, broker, or principal, in the business of offering, buying, selling, or otherwise dealing or trading in securities issued by another person.

(13)

The term “insurance company” means a company which is organized as an insurance company, whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies, and which is subject to supervision by the insurance commissioner, or a similar official or agency, of a State or territory or the District of Columbia; or any receiver or similar official or any liquidating agent for such company, in his capacity as such.

(14)

The term “separate account” means an account established and maintained by an insurance company pursuant to the laws of any State or territory of the United States, the District of Columbia, or of Canada or any province thereof, under which income, gains and losses, whether or not realized, from assets allocated to such account, are, in accordance with the applicable contract, credited to or charged against such account without regard to other income, gains, or losses of the insurance company.

(15)

The term “accredited investor” shall mean—

(i)

section 77c(a)(2) of this title 15 U.S.C. 80a–1 15 U.S.C. 80a–2(a)(48)29 U.S.C. 1001 29 U.S.C. 1002(21) a bank as defined in whether acting in its individual or fiduciary capacity; an insurance company as defined in paragraph (13) of this subsection; an investment company registered under the Investment Company Act of 1940 [ et seq.] or a business development company as defined in section 2(a)(48) of that Act []; a Small Business Investment Company licensed by the Small Business Administration; or an employee benefit plan, including an individual retirement account, which is subject to the provisions of the Employee Retirement Income Security Act of 1974 [ et seq.], if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act [], which is either a bank, insurance company, or registered investment adviser; or

(ii)

any person who, on the basis of such factors as financial sophistication, net worth, knowledge, and experience in financial matters, or amount of assets under management qualifies as an accredited investor under rules and regulations which the Commission shall prescribe.

(16)

section 78c(a)(55) of this title The terms “security future”, “narrow-based security index”, and “security futures product” have the same meanings as provided in .

(17)

section 1a of title 7 The terms “swap” and “security-based swap” have the same meanings as in .

(18)

The terms “purchase” or “sale” of a security-based swap shall be deemed to mean the execution, termination (prior to its scheduled maturity date), assignment, exchange, or similar transfer or conveyance of, or extinguishing of rights or obligations under, a security-based swap, as the context may require.

(19)

The term “emerging growth company” means an issuer that had total annual gross revenues of less than $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) during its most recently completed fiscal year. An issuer that is an emerging growth company as of the first day of that fiscal year shall continue to be deemed an emerging growth company until the earliest of—

(A)

the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

(B)

the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under this subchapter;

(C)

the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or

(D)

the date on which such issuer is deemed to be a “large accelerated filer”, as defined in section 240.12b–2 of title 17, Code of Federal Regulations, or any successor thereto.

(b)

Consideration of promotion of efficiency, competition, and capital formation

Whenever pursuant to this subchapter the Commission is engaged in rulemaking and is required to consider or determine whether an action is necessary or appropriate in the public interest, the Commission shall also consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and capital formation.

May 27, 1933, ch. 38 48 Stat. 74 June 6, 1934, ch. 404 48 Stat. 905 Aug. 10, 1954, ch. 667 68 Stat. 683 Pub. L. 86–70, § 12(a)June 25, 195973 Stat. 143 Pub. L. 86–624, § 7(a)July 12, 196074 Stat. 412 Pub. L. 91–547, § 27(a)Dec. 14, 197084 Stat. 1433 Pub. L. 96–477, title VI, § 603Oct. 21, 198094 Stat. 2294 Pub. L. 97–303, § 1Oct. 13, 198296 Stat. 1409 Pub. L. 100–181, title IIDec. 4, 1987101 Stat. 1252 Pub. L. 104–290, title I, § 106(a)Oct. 11, 1996110 Stat. 3424 Pub. L. 105–353, title III, § 301(a)(1)Nov. 3, 1998112 Stat. 3235 Pub. L. 106–554, § 1(a)(5) [title II, § 208(a)(1)]Dec. 21, 2000114 Stat. 2763 Pub. L. 111–203, title VII, § 768(a)July 21, 2010124 Stat. 1800 Pub. L. 112–106, title IApr. 5, 2012126 Stat. 307 Pub. L. 119–27, § 17(c)July 18, 2025139 Stat. 463(, title I, § 2, ; , title II, § 201, ; , title I, §§ 1–4, , 684; , , ; , , ; , , ; , , ; , , ; , §§ 201, 202, , ; , , ; , , ; , , , 2763A–434; , , ; , §§ 101(a), 105(a), , , 310; , , .)

Amendment of Subsection (a)(1)

Pub. L. 119–27July 18, 2025139 Stat. 463July 18, 2025Pub. L. 119–27

section 5901 of title 12“The term ‘security’ does not include a payment stablecoin issued by a permitted payment stablecoin issuer, as such terms are defined in .”

, §§ 17(c), 20, , , 466, provided that, effective on the earlier of the date that is 18 months after , or the date that is 120 days after the date on which the primary Federal payment stablecoin regulators issue any final regulations implementing , subsection (a)(1) of this section is amended by adding at the end the following: See 2025 Amendment note below.

Editorial Notes

References in Text

act Aug. 22, 1940, ch. 686 54 Stat. 789 section 80a–51 of this titleThe Investment Company Act of 1940, referred to in subsec. (a)(15)(i), is title I of , , which is classified generally to subchapter I (§ 80a–1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see and Tables.

Pub. L. 93–406Sept. 2, 197488 Stat. 829 section 1001 of Title 29The Employee Retirement Income Security Act of 1974, referred to in subsec. (a)(15)(i), is , , , which is classified principally to chapter 18 (§ 1001 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Codification

July 4, 194660 Stat. 1352 section 1394 of Title 22Words “Philippine Islands” deleted from definition of term “Territory” under authority of Proc. No. 2695, eff. , 11 F.R. 7517, , which granted independence to the Philippine Islands. Proc. No. 2695 was issued pursuant to , Foreign Relations and Intercourse, and is set out as a note under that section.

Amendments

Pub. L. 119–27 section 5901 of title 122025—Subsec. (a)(1). inserted at end “The term ‘security’ does not include a payment stablecoin issued by a permitted payment stablecoin issuer, as such terms are defined in .”

Pub. L. 112–106, § 105(a)section 77e(c) of this title2012—Subsec. (a)(3). , inserted at end “The publication or distribution by a broker or dealer of a research report about an emerging growth company that is the subject of a proposed public offering of the common equity securities of such emerging growth company pursuant to a registration statement that the issuer proposes to file, or has filed, or that is effective shall be deemed for purposes of paragraph (10) of this subsection and not to constitute an offer for sale or offer to sell a security, even if the broker or dealer is participating or will participate in the registered offering of the securities of the issuer. As used in this paragraph, the term ‘research report’ means a written, electronic, or oral communication 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.”

Pub. L. 112–106, § 101(a)Subsec. (a)(19). , added par. (19).

Pub. L. 111–203, § 768(a)(1)2010—Subsec. (a)(1). , inserted “security-based swap,” after “security future,”.

Pub. L. 111–203, § 768(a)(2)Subsec. (a)(3). , inserted at end “Any offer or sale of a security-based swap by or on behalf of the issuer of the securities upon which such security-based swap is based or is referenced, an affiliate of the issuer, or an underwriter, shall constitute a contract for sale of, sale of, offer for sale, or offer to sell such securities.”

Pub. L. 111–203, § 768(a)(3)Subsec. (a)(17), (18). , added pars. (17) and (18).

Pub. L. 106–554, § 1(a)(5) [title II, § 208(a)(1)(A)]2000—Subsec. (a)(1). , inserted “security future,” after “treasury stock,”.

Pub. L. 106–554, § 1(a)(5) [title II, § 208(a)(1)(B)]Subsec. (a)(3). , inserted at end “Any offer or sale of a security futures product by or on behalf of the issuer of the securities underlying the security futures product, an affiliate of the issuer, or an underwriter, shall constitute a contract for sale of, sale of, offer for sale, or offer to sell the underlying securities.”

Pub. L. 106–554, § 1(a)(5) [title II, § 208(a)(1)(C)]Subsec. (a)(16). , added par. (16).

Pub. L. 105–353 section 77c(a)(2) of this title1998—Subsec. (a)(15)(i). made technical amendment to reference in original act which appears in text as reference to and inserted “of this subsection” after “paragraph (13)”.

Pub. L. 104–2901996— designated existing provisions as subsec. (a), inserted heading, and added subsec. (b).

Pub. L. 100–181, § 2011987—Par. (5). , substituted “Securities and Exchange Commission” for “Federal Trade Commission”.

Pub. L. 100–181, § 202Par. (6). , struck out reference to Canal Zone.

Pub. L. 97–3031982—Par. (1). inserted “any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency,” after “mineral rights,”.

Pub. L. 96–4771980—Par. (15). added par. (15).

Pub. L. 91–5471970—Pars. (13), (14). added pars. (13) and (14).

Pub. L. 86–6241960—Par. (6). struck out reference to Hawaii.

Pub. L. 86–701959—Par. (6). struck out reference to Alaska.

Aug. 10, 1954Aug. 10, 19541954—Act , in pars. (3), (8), (10), and (11), redefined term “sale” so as to distinguish between “offers” and “sales”, clarified definition of “registration statement”, and conformed definition of “prospectus” to changes made by act , to sections 77e and 77j of this title.

June 6, 19341934—Act , amended pars. (1), (4), and (10).

Statutory Notes and Related Subsidiaries

Effective Date of 2025 Amendment

Pub. L. 119–27July 18, 2025Pub. L. 119–27 section 20 of Pub. L. 119–27 section 5901 of Title 12Amendment by effective on the earlier of the date that is 18 months after , or the date that is 120 days after the date on which the primary Federal payment stablecoin regulators issue any final regulations implementing , see , set out as an Effective Date note under , Banks and Banking.

Effective Date of 2012 Amendment

Pub. L. 112–106, title I, § 101(d)Apr. 5, 2012126 Stat. 308

15 U.S.C. 77b(a)(19)15 U.S.C. 78c(a)(80)15 U.S.C. 77a 15 U.S.C. 77aDecember 8, 2011“Notwithstanding section 2(a)(19) of the Securities Act of 1933 [] and section 3(a)(80) of the Securities Exchange Act of 1934 [], an issuer shall not be an emerging growth company for purposes of such Acts [ et seq., 78a et seq.] if the first sale of common equity securities of such issuer pursuant to an effective registration statement under the Securities Act of 1933 [ et seq.] occurred on or before .”

, , , provided that:

Effective Date of 2010 Amendment

Pub. L. 111–203, title VII, § 774July 21, 2010124 Stat. 1802

Pub. L. 111–203oosection 78c of this titleJuly 21, 2010“Unless otherwise provided, the provisions of this subtitle [subtitle B (§§ 761–774) of title VII of , enacting subchapter II (§ 8341 et seq.) of chapter 109 and sections 78c–3 to 78c–5, 78j–2, 78m–1, and 78–10 of this title, amending this section and sections 77b–1, 77e, 77q, 78c, 78c–1, 78f, 78i, 78j, 78m, 78, 78p, 78q–1, 78t, 78u–1, 78u–2, 78bb, 78dd, 78mm, 80a–2, and 80b–2 of this title, and amending provisions set out as a note under ] shall take effect on the later of 360 days after the date of the enactment of this subtitle [] or, to the extent a provision of this subtitle requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of this subtitle.”

, , , provided that:

Effective Date of 1970 Amendment

Pub. L. 91–547Dec. 14, 1970section 30 of Pub. L. 91–547 section 80a–52 of this titleAmendment by effective , see , set out as a note under .

Effective Date of 1954 Amendment

Act Aug. 10, 1954, ch. 667, § 501 68 Stat. 689

llAug. 10, 1954“This Act [amending this section and sections 77c to 77e, 77j, 77, 77q, 77v, 77ccc to 77fff, 77xxx, 78k, 78, 80a–2 and 80a–24 of this title] shall take effect sixty days after the date of its enactment [].”

, , provided that:

Adjusting the Accredited Investor Standard

Pub. L. 111–203, title IV, § 413July 21, 2010124 Stat. 1577

“(a)

In General .—

15 U.S.C. 77aJuly 21, 2010The [Securities and Exchange] Commission shall adjust any net worth standard for an accredited investor, as set forth in the rules of the Commission under the Securities Act of 1933 [ et seq.], so that the individual net worth of any natural person, or joint net worth with the spouse of that person, at the time of purchase, is more than $1,000,000 (as such amount is adjusted periodically by rule of the Commission), excluding the value of the primary residence of such natural person, except that during the 4-year period that begins on the date of enactment of this Act [], any net worth standard shall be $1,000,000, excluding the value of the primary residence of such natural person.

“(b)

Review and Adjustment.—

“(1)

Initial review and adjustment.—

“(A)

Initial review .—

The Commission may undertake a review of the definition of the term ‘accredited investor’, as such term applies to natural persons, to determine whether the requirements of the definition, excluding the requirement relating to the net worth standard described in subsection (a), should be adjusted or modified for the protection of investors, in the public interest, and in light of the economy.

“(B)

Adjustment or modification .—

Upon completion of a review under subparagraph (A), the Commission may, by notice and comment rulemaking, make such adjustments to the definition of the term ‘accredited investor’, excluding adjusting or modifying the requirement relating to the net worth standard described in subsection (a), as such term applies to natural persons, as the Commission may deem appropriate for the protection of investors, in the public interest, and in light of the economy.

“(2)

Subsequent reviews and adjustment.—

“(A)

Subsequent reviews .—

July 21, 2010Not earlier than 4 years after the date of enactment of this Act [], and not less frequently than once every 4 years thereafter, the Commission shall undertake a review of the definition, in its entirety, of the term ‘accredited investor’, as defined in section 230.215 of title 17, Code of Federal Regulations, or any successor thereto, as such term applies to natural persons, to determine whether the requirements of the definition should be adjusted or modified for the protection of investors, in the public interest, and in light of the economy.

“(B)

Adjustment or modification .—

Upon completion of a review under subparagraph (A), the Commission may, by notice and comment rulemaking, make such adjustments to the definition of the term ‘accredited investor’, as defined in section 230.215 of title 17, Code of Federal Regulations, or any successor thereto, as such term applies to natural persons, as the Commission may deem appropriate for the protection of investors, in the public interest, and in light of the economy.”

, , , provided that:

Executive Documents

Transfer of Functions

May 24, 195064 Stat. 1265 section 78d of this titleFor transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. , 15 F.R. 3175, , set out under .