- (a) Exempted securities
Except as hereinafter expressly provided, the provisions of this subchapter
shall not apply to any of the following classes of securities:
- (1) Reserved.
- (2) Any security issued or guaranteed by the United States or any territory
thereof, or by the District of Columbia, or by any State of the United States, or by any political subdivision of a State or territory, or by any public instrumentality of one or more States or territories, or by any person controlled or supervised by and acting as an instrumentality of the Government of the United States pursuant to authority granted by the Congress of the United States; or any certificate of deposit for any of the foregoing; or any security issued or guaranteed by any bank; or any security issued by or representing an interest in or a direct obligation of a Federal Reserve bank; or any interest or participation in any common trust fund or similar fund maintained by a bank exclusively for the collective investment and reinvestment of assets contributed thereto by such bank in its capacity as trustee, executor, administrator, or guardian; or any security which is an industrial development bond (as defined in section 103(c)(2) (FOOTNOTE 1) of title 26) the interest on which is excludable from gross income under section 103(a)(1) (FOOTNOTE 1) of title 26 if, by reason of the application of paragraph (4) or (6) of section 103(c) (FOOTNOTE 1) of title 26 (determined as if paragraphs (4)(A), (5), and (7) were not included in such section 103(c)), (FOOTNOTE 1) paragraph (1) of such section 103(c) (FOOTNOTE 1) does not apply to such security; or 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, which interest, participation, or security is issued in connection with
- (3) Any note, draft, bill of exchange, or banker's acceptance which arises
out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited;
- (4) Any security issued by a person organized and operated exclusively for
religious, educational, benevolent, fraternal, charitable, or reformatory purposes and not for pecuniary profit, and no part of the net earnings of which inures to the benefit of any person, private stockholder, or individual; or any security of a fund that is excluded from the definition of an investment company under section 3(c)(10)(B) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(10)(B));
- (5) Any security issued (A) by a savings and loan association, building and
loan association, cooperative bank, homestead association, or similar institution, which is supervised and examined by State or Federal authority having supervision over any such institution; or (B) by (i) a farmer's cooperative organization exempt from tax under section 521 of title 26, (ii) a corporation described in section 501(c)(16) of title 26 and exempt from tax under section 501(a) of title 26, or (iii) a corporation described in section 501(c)(2) of title 26 which is exempt from tax under section 501(a) of title 26 and is organized for the exclusive purpose of holding title to property, collecting income therefrom, and turning over the entire amount thereof, less expenses, to an organization or corporation described in clause (i) or (ii);
- (6) Any interest in a railroad equipment trust. For purposes of this
paragraph "interest in a railroad equipment trust" means any interest in an equipment trust, lease, conditional sales contract, or other similar arrangement entered into, issued, assumed, guaranteed by, or for the benefit of, a common carrier to finance the acquisition of rolling stock, including motive power;
- (7) Certificates issued by a receiver or by a trustee or debtor in possession
in a case under title 11, with the approval of the court;
- (8) Any insurance or endowment policy or annuity contract or optional annuity
contract, issued by a corporation 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;
- (9) Except with respect to a security exchanged in a case under title 11, any
security exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange;
- (10) Except with respect to a security exchanged in a case under title 11,
any security which is issued in exchange for one or more bona fide outstanding securities, claims or property interests, or partly in such exchange and partly for cash, where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear, by any court, or by any official or agency of the United States, or by any State or Territorial banking or insurance commission or other governmental authority expressly authorized by law to grant such approval;
- (11) Any security which is a part of an issue offered and sold only to
persons resident within a single State or Territory, where the issuer of such security is a person resident and doing business within or, if a corporation, incorporated by and doing business within, such State or Territory.
- (12) Any equity security issued in connection with the acquisition by a
holding company of a bank under section 1842(a) of title 12 or a savings association under section 1467a(e) of title 12, if -
- (A) the acquisition occurs solely as part of a reorganization in which
security holders exchange their shares of a bank or savings association for shares of a newly formed holding company with no significant assets other than securities of the bank or savings association and the existing subsidiaries of the bank or savings association;
- (B) the security holders receive, after that reorganization, substantially
the same proportional share interests in the holding company as they held in the bank or savings association, except for nominal changes in shareholders' interests resulting from lawful elimination of fractional interests and the exercise of dissenting shareholders' rights under State or Federal law;
- (C) the rights and interests of security holders in the holding company are
substantially the same as those in the bank or savings association prior to the transaction, other than as may be required by law; and
- (D) the holding company has substantially the same assets and liabilities, on
a consolidated basis, as the bank or savings association had prior to the transaction. For purposes of this paragraph, the term "savings association" means a savings association (as defined in section 1813(b) of title 12) the deposits of which are insured by the Federal Deposit Insurance Corporation.
- (b) Additional exemptions
The Commission may from time to time by its rules and regulations, and subject
to such terms and conditions as may be prescribed therein, add any class of securities to the securities exempted as provided in this section, if it finds that the enforcement of this subchapter with respect to such securities is not necessary in the public interest and for the protection of investors by reason of the small amount involved or the limited character of the public offering; but no issue of securities shall be exempted under this subsection where the aggregate amount at which such issue is offered to the public exceeds $5,000,000.
- (c) Securities issued by small investment company
The Commission may from time to time by its rules and regulations and subject
to such terms and conditions as may be prescribed therein, add to the securities exempted as provided in this section any class of securities issued by a small business investment company under the Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) if it finds, having regard to the purposes of that Act, that the enforcement of this subchapter with respect to such securities is not necessary in the public interest and for the protection of investors.