An Act to amend certain provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Trust Indenture Act of 1939, and the Investment Company Act of 1940
PL 83-577 (S.2846), enacted 08/10/1954

68 
S T A T . ] 
PUBLIC LAW 577-AUG. 10, 1954 
683 
SEC. 3. Section 12 of such Act is hereby amended by striking out 
"Comptroller of the Currency" and inserting in lieu thereof "Director 
of the Bureau of Federal Credit Unions". 
Approved August 10, 1954. 
D. 
512. C. Code 26-
Public Law 577 
CHAPTER 667 
AN ACT 
To amend certain provisions of the Securities Act of 1933, as amended, the 
Securities Exchange Act of 1934, as amended, the Trust Indenture Act of 
1939, and the Investment Company Act of 1940. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assemhled^ 
TITLE I—AMENDMENTS TO SECURITIES ACT OF 1933, AS 
AMENDED 
August 10, 1954 
[S. 2846] 
Securities acts, 
etc. 
Amendments. 
SECTION 1. Paragraph (3) of section 2 of the Securities Act of 1933 
is amended to read as follows: 
"(3) 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 section 5 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 con-
trolling 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 trans-
ferred 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." 
SEO. 2. Paragraph (8) of section 2 of the Securities Act of 1933 
is amended to read as follows: 
"(8) The term 'registration statement' means the statement pro-
vided for in section 6, and includes any amendment thereto and any 
report, document, or memorandum filed as part of such statement or 
incorporated therein by reference." 
SEC. 3. Paragraph (10) of section 2 of the Securities Act of 1933, 
as amended, is amended to read as follows: 
"(10) The term 'prospectus' means any prospectus, notice, circular, 
advertisement, letter, or communication, w^ritten or by radio or tele-
vision, 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 
48 Stat. 74. 
15 u s e 77b. 
"Sale", etc. 
Post, p. 685. 
15 u s e 77b. 
"R eg is tr ati on 
statement." 
15 u s e 77f. 
15 u s e 77b. 
"Prospectus." 
684 
PUBLIC LAW 577-AUG. 10, 1954 
[68 STAT. 
Post, p. 685. 
permitted under subsection (b) of section 10) 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 sub-
section (a) of section 10 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 section 10 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 regula-
tions 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." 
15 use 77b. 
gEc. 4. Paragraph (11) of section 2 of the Securities Act of 1933 is 
amended by inserting the words "offers or" before the word "sells". 
15USC 7
^
7
c
.
" 
^^^- ^- Paragraph (11) of section 3 (a) of the Securities Act of 
1933, as amended, is amended by inserting the words "offered and" 
before the word "sold". 
15 use 7^7d.' 
^^^- ^- Section 4 (1) of the Securities Act of 1933, as amended, is 
amended to read as follows: 
Exemptions. 
^^{^) Trausactions by any person other than an issuer, underwriter, 
or dealer; transactions by an issuer not involving any public offering; 
or transactions by a dealer (including an underwriter no longer acting 
as an underwriter in respect of the security involved in such trans-
action), except transactions taking place prior to the expiration of 
forty days after the first date upon which the security was bona fide 
offered to the public by the issuer or by or through an underwriter and 
transactions in a security as to which a registration statement has 
been filed taking place prior to the expiration of forty days after the 
effective date of such registration statement or prior to the expiration 
of forty days after the first date upon which the security was bona 
fide offered to the public by the issuer or by or through an underwriter 
after such effective date, whichever is later (excluding in the com-
putation of such forty days any time during which a stop order issued 
15 use 77h. 
under section 8 is in effect as to the security), and except transactions 
as to securities constituting the whole or a part of an unsold allotment 
to or subscription by such dealer as a participant in the distribution 
of such securities by the issuer or by or through an underwriter," 
15 use 77e. 
gjjQ 7 Section 5 of the Securities Act of 1933 is amended to read 
as follows: 
"PROHIBITIONS RELATING TO INTERSTATE COMMERCE AND THE MAILS 
"SEC. 5. (a) Unless a registration statement is in effect as to a 
security, it shall be unlawful for any person, directly or indirectly— 
" (1) to make use of any means or instruments of transportation 
or communication in interstate commerce or of the mails to sell 
such security through the use or medium of any prospectus or 
otherwise; or 
"(2) to carry or cause to be carried through the mails or in 
interstate commerce, by any means or instruments of transporta-
tion, any such security for the purpose of sale or for delivery after 
sale. 
"(b) It shall be unlawful for any person, directly or indirectly— 
"(1) to make use of any means or instruments of transporta-
tion or communication in interstate commerce or of the mails to 
carry or transmit any prospectus relating to any security with 
6 8 S T A T - ] 
PUBLIC LAW 577-AUG. 10, 1954 
685 
respect to which a registration statement has been filed under this 
title, unless such prospectus meets the requirements of section 10; 
or 
"(2) to carry or cause to be carried through the mails or in 
interstate commerce any such security for the purpose of sale or 
for delivery after sale, unless accompanied or preceded by a pro-
spectus that meets the requirements of subsection (a) of section 10. 
"(c) It shall be unlawful for any person, directly or indirectly, to 
make use of any means or instruments of transportation or communi-
cation in interstate commerce or of the mails to offer to sell or offer 
to buy through the use or medium of any prospectus or otherwise any 
security, unless a registration statement has been filed as to such 
security, or while the registration statement is the subject of a refusal 
order or stop order or (prior to the effective date of the registration 
statement) any public proceeding or examination under section 8." 
SEC. 8. Section 10 of the Securities Act of 1933, as amended, is 
amended to read as follows: 
Infra. 
15 u s e 77h. 
15 use 77j. 
"INFORMATION REQUIRED I N PROSPECTUS 
"SEC. 10. (a) Except to the extent otherwise permitted or required 
pursuant to this subsection or subsections (c), (d),or (e)— 
"(1) a prospectus relating to a security other than a security 
issued by a foreign government or political subdivision thereof, 
shall contain the information contained in the registration state-
ment, but it need not include the documents referred to in para-
graphs (28) to (32), inclusive, of schedule A; 
"(2) a prospectus relating to a security issued by a foreign 
government or political subdivision thereof shall contain the 
information contained in the registration statement, but it need 
not include the documents referred to in paragraphs (13) and 
(14) of schedule B ; 
"(3) notwithstanding the provisions of paragraphs (1) and 
(2) of this subsection (a) when a prospectus is used more than 
nine months after the effective date of the registration statement, 
the information contained therein shall be as of a date not more 
than sixteen months prior to such use, so far as such information 
is known to the user of such prospectus or can be furnished by 
such user without unreasonable effort or expense; 
"(4) there may be omitted from any prospectus any of the 
information required under this subsection (a) which the Com-
mission may by rules or regulations designate as not being neces-
sary or appropriate in the public interest or for the protection 
of investors. 
"(b) In addition to the prospectus permitted or required in sub-
section (a), the Commission shall by rules or regulations deemed 
necessary or appropriate in the public interest or for the protection of 
investors permit the use of a prospectus for the purposes of subsection 
(b) (1) of section 5 which omits in part or summarizes information in 
the prospectus specified in subsection (a). 
A prospectus permitted 
under this subsection shall, except to the extent the Commission by 
rules or regulations deemed necessary or appropriate in the public 
interest or for the protection of investors otherwise provides, be filed 
as part of the registration statement but shall not be deemed a part of 
such registration statement for the purposes of section 11. The Com-
mission may at any time issue an order preventing or suspending the 
use of a prospectus permitted under this subsection (b), if it has 
reason to believe that such prospectus has not been filed (if required to 
Ante, p, 684. 
15 u s e 77k. 
686 
PUBLIC LAW 577-AUG. 10, 1954 
[68 STAT. 
be filed as part of the registration statement) or includes any untrue 
- ' 
statement of a material fact or omits to state any material fact 
required to be stated therein or necessary to make the statements 
therein, in the light of the circumstances under which such prospectus 
is or is to be used, not misleading. 
Upon issuance of an order under 
this subsection, the Commission shall give notice of the issuance of 
such order and opportunity for hearing by personal service or the 
sending of confirmed telegraphic notice. The Commission shall 
vacate or modify the order at any time for good cause or if such 
prospectus has been filed or amended in accordance with such order. 
"(c) Any prospectus shall contain such other information as the 
Commission may by rules or regulations require as being necessary or 
appropriate in the public interest or for the protection of investors. 
"(d) In the exercise of its powers under subsections (a), (b), or (c), 
the Commission shall have authority to classify prospectuses according 
to the nature and circumstances of their use or the nature of the 
security, issue, issuer, or otherwise, and, by rules and regulations and 
subject to such terms and conditions as it shall specify therein, to pre-
scribe as to each class the form and contents which it may find appro-
priate and consistent with the public interest and the protection of 
investors. 
"(e) The statements or information required to be included in a 
prospectus by or under authority of subsections (a), (b), (c), or 
(d), when written, shall be placed in a conspicuous part of the 
prospectus and, except as otherwise permitted by rules or regulations, 
in type as large as that used generally in the body of the prospectus. 
"(f) In any case where a prospectus consists of a radio or television 
broadcast, copies thereof shall be filed with the Commission under 
such rules and regulations as it shall prescribe. 
The Commission may 
by rules and regulations require the filing with it of forms and 
prospectuses used in connection with the offer or sale of securities 
registered under this title." 
15 use 771. 
gj,(, 9 Section 12 of the Securities Act of 1933 is amended by insert-
ing the words "offers or" before the word "sells" in clauses (1) and 
(2) thereof. 
15 use 77g. 
gEC. 10. Section 17 (a) of the Securities Act of 1933 is amended by 
inserting the words "offer or" before the word "sale" in the introduc-
tory clause thereof. 
15 use 77v. 
gj,^ II 
Section 22 (a) of the Securities Act of 1933 is amended by 
inserting the words "offer or" before the word "sale" in the second 
sentence thereof. 
TITLE II—AMENDMENTS TO SECURITIES 
EXCHANGE 
ACT OF 1934, AS AMENDED 
SEC. 201. Subsection (d) of section 11 of the Securities Exchange 
15 use 7
8
k
V 
-^^^ ^^ 1^^^ ^^ amended by striking out the words "six months" where 
they appear in such paragraph and inserting in lieu thereof the words 
"thirty days". 
SEC. 202. The last sentence of subsection (d) of section 12 of the 
15 use 781. 
Securities Exchange Act of 1934 is hereby repealed. 
, 
TITLE III—AMENDMENTS TO TRUST INDENTURE 
ACT OF 1939 
SEC. 301. (a) Paragraph (1) of section 303 of the Trust Indenture 
IS use 77cic. 
^^^t o^ 1^^^ ^^ amended by deleting the following: "as heretofore 
amended,". 
68 S T A T . ] 
PUBLIC LAW 577-AUG. 10, 1954 
687 
(b) Paragraph (2) of section 303 of the Trust Indenture Act of 
1939 is amended to read as follows: 
"(2) The terms 'sale', 'sell', 'offer to sell', 'offer for sale', and 'offer' 
shall include all transactions included in such terms as provided in 
paragraph (3) of section 2 of the Securities Act of 1933, except that 
an offer or sale of a certificate of interest or participation snail be 
deemed an offer or sale of the security or securities in which such 
certificate evidences an interest or participation if and only if such 
certificate gives the holder thereof tne right to convert the same into 
such security or securities." 
(c) Paragraph (3) of section 303 of the Trust Indenture Act of 
1939 is amended to read as follows: 
"(3) The term 'prospectus' shall have the meaning assigned to such 
term in paragraph (10) of section 2 of the Securities Act of 1933, 
except that in the case of securities which are not registered under the 
Securities Act of 1933, such term shall not include any communication 
(A) if it is proved that prior to or at the same time with such com-
munication a written statement if any required by section 306 was 
sent or given to the persons to whom the communication was made, or 
(B) if such communication states from whom such statement may be 
obtained (if such statement is required by rules or regulations under 
paragraphs (1) or (2) of subsection (b) of section 306) and, in addi-
tion, does no more than identify the security, state the price thereof, 
state by whom orders w411 be executed and contain such other informa-
tion as the Commission, by rules or regulations deemed necessary or 
appropriate in the public interest or for the protection of investors, 
and subject to such terms and conditions as may be prescribed therein, 
may permit." 
(d) Paragraph (4) of section 303 of the Trust Indenture Act of 
1939 is amended by inserting the words "offers or" before the word 
"sells". 
SEC. 302. Subsection (b) of section 304 of the Trust Indenture 
Act of 1939 is amended by deleting the following: "as heretofore 
amended,". 
SEC. 303. Subsection (c) of section 305 of the Trust Indenture Act 
of 1939 is amended to read as follows: 
"(c) A prospectus relating to any such security shall include to the 
extent the Commission may prescribe by rules and regulations as neces-
sary and appropriate in the public interest or for the protection of 
investors, as though such inclusion were required by section 10 of the 
Securities Act of 1933, a written statement containing the analysis 
set forth in the registration statement, of any indenture provisions 
with respect to the matters specified in paragraph (2) of subsection 
(a) of this section, together with a supplementary analysis, prepared 
by the Commission, of such provisions and of the effect thereof, if, in 
the opinion of the Commission, the inclusion of such supplementary 
analysis is necessary or appropriate in the public interest or for the 
protection of investors, and the Commission so declares by order after 
notice and, if demanded by the issuer, opportunity for hearing thereon. 
Such order shall be entered prior to the effective date of registration, 
except that if opportunity for hearing thereon is demanded by the 
issuer such order shall be entered within a reasonable time after such 
opportunity for hearing." 
SEC. 304. Section 306 of the Trust Indenture Act of 1939 is amended 
to read as follows: 
'Sale' 
Ante, p. 683. 
IS use 77ccc. 
"Prospectus." 
Ante, p. 683. 
15 use 77a. 
Poat, p. 688. 
15 use 77ccc. 
15 u s e 77ddd. 
15 use 77eee. 
Ante, p. 685. 
15 use 77fff. 
688 
PUBLIC LAW 577-AUG. 10, 1954 
[68 STAT. 
15 u s e 77a. 
15 use 77ddd. 
15 u s e 77a. 
Ante, p. 687. 
Ante, p. 687. 
15 use 77a. 
15 use 77ddd. 
15USe77ggg(c). 
15 u s e 77xxx. 
SECURITIES NOT REGISTERED UNDER SECURITIES ACT 
"SEC. 306. (a) In the case of any security which is not registered 
under the Securities Act of 1933 and to which this subsection is appli-
cable notwithstanding the provisions of section 304, unless such 
security has been or is to be issued under an indenture and an appli-
cation for qualification is effective as to such indenture, it shall be 
unlawful for any person, directly or indirectly— 
"(1) to make use of any means or instruments of transporta-
tion or communication in interstate commerce or of the mails to 
sell such security through the use or medium of any prospectus or 
otherwise; or 
"(2) to carry or cause to be carried through the mails or in 
interstate commerce, by any means or instruments of transpor-
tation, any such security for the purpose of sale or for delivery 
after sale. 
"(b) In the case of any security which is not registered under the 
Securities Act of 1933, but which has been or is to be issued under an 
indenture as to which an application for qualification is effective, it 
shall be unlawful for any person, directly or indirectly— 
" (1) to make use of any means or instruments of transporta-
tion or communication in interstate commerce or of the mails to 
carry or transmit any prospectus relating to any such security, 
unless such prospectus, to the extent the Commission may pre-
scribe by rules and regulations as necessary and appropriate in 
the public interest or for the protection of investors, includes or is 
accompanied by a written statement that contains the information 
specified in subsection (c) of section 305; or 
"(2) to carry or to cause to be carried through the mails or in 
interstate commerce any such security for the purpose of sale 
or for delivery after sale, unless, to the extent the Commission 
may prescribe by rules and regulations as necessary or appro-
priate in the public interest or for the protection of investors, 
accompanied or preceded by a written statement that contains the 
information specified in subsection (c) of section 305. 
"(c) It shall be unlawful for any person, directly or indirectly, to 
make use of any means or instruments of transportation or communi-
cation in interstate commerce or of the mails to offer to sell through 
the use or medium of any prospectus or otherwise any security which 
is not registered under the Securities Act of 1933 and to which this 
subsection is applicable notwithstanding the provisions of section 304, 
unless such security has been or is to be issued under an indenture and 
an application for qualification has been filed as to such indenture, or 
while the application is the subject of a refusal order or stop order or 
(prior to qualification) any public proceeding or examination under 
section 307 (c)." 
SEC. 305. Section 324 of the Trust Indenture Act of 1939 is amended 
by deleting the words "issuing or selling" and inserting in lieu thereof 
the words "offering, selling, or issuing". 
TITLE IV—AMENDMENTS TO INVESTMENT 
COMPANY 
ACT OF 1940 
54 Stat. 790. 
15 u s e 80a-2. 
SEC. 401. Section 2 (a) (30) of the Investment Company Act of 
1940 is amended to read as follows: 
Ante, 
p. 684. 
68 S T A T . ] 
PUBLIC LAW 577-AUG. 10, 1954 
689 
" (30) 'Prospectus', as used in section 22, means a written prospectus 
intended to meet the requirements of section 10 (a) of the Securities 
•^"'^' P- ^^^• 
Act of 1933 and currently in use. As used elsewhere, 'prospectus' 
means a prospectus as defined in the Securities Act of 1933." 
^"*^' P- ^^^* 
SEC. 402. Subsection (d) of section 24 of the Investment Company 
Act of 1940 is amended by adding the following at the end thereof: 
\\ ^*|^- |o^a.-24 
"The exemption provided by the third clause of section 4 (1) of the 
Securities Act of 1933, as amended, shall not apply to any transaction 
in a security issued by a face-amount certificate company or in a 
redeemable security issued by an open-end management company or 
unit investment trust, if any other security of the same class is cur-
rently being offered or sold by the issuer or by or through an under-
writer in a distribution which is not exempted from section 5 of said 
'*"'®' P- ^^'*-
Act, except to such extent and subject to such terms and conditions 
as the Commission, having due regard for the public interest and the 
protection of investors, may prescribe by rules or regulations with 
respect to any class of persons, securities, or transactions." 
SEO. 403. Section 24 of the Investment Company Act of 1940 is 
^^ "^^ «°^24,. 
amended by adding at the end thereof a new subsection (e) as follows: 
"(e) (1) A registration statement under the Securities Act of 1933 
^^ "^^ ^^''• 
relating to a security issued by a face-amount certificate company or 
a redeemable security issued by an open-end management company or 
unit investment trust may be amended after its effective date so as to 
increase the securities specified therein as proposed to be offered. 
Afc 
the time of filing such amendment there shall be paid to the Com-
mission a fee, calculated in the manner specified in section 6 (b) of 
said Act, with respect to the additional securities therein proposed to 
^^ ^^^ ''^'• 
be offered. 
"(2) The filing of such an amendment to a registration statement 
under the Securities Act of 1933 shall not be deemed to have taken 
place unless it is accompanied by a United States postal money order 
or a certified bank check or cash for the amount of the fee required 
under paragraph (1) of this subsection. 
"(3) For the purposes of section 11 of the Securities Act of 1933, 
is use 77k. 
as amended, the effective date of the latest amendment filed pursuant 
to this subsection or otherwise shall be deemed the effective date of 
the registration statement with respect to securities sold after such 
amendment shall have become effective. For the purposes of section 
13 of the Securities Act of 1933, as amended, no such security shall be 
^^ use 77m. 
deemed to have been bona fide offered to the public prior to the effec-
tive date of the latest amendment filed pursuant to this subsection. 
Except to the extent the Commission otherwise provides by rules or 
regulations as appropriate in the public interest or for the protection 
of investors, no prospectus relating to a security issued by a face-
amount certificate company or a redeemable security issued by an 
open-end management company or unit investment trust which varies 
for the purposes of subsection (a) (3) of section 10 of the Securities 
Act of 1933 from the latest prospectus filed as a part of the registration 
statement shall be deemed to meet the requirements of said section 10 
unless filed as part of an amendment to the registration statement 
under said Act and such amendment has become effective." 
TITLE V—EFFECTIVE DATE 
SEC. 501. This Act shall take effect sixty days after the date of its 
enactment. 
Approved August 10, 1954. 
Ante, 
p. 685. 
39777 O—55—pt. 1 
46