Securities Litigation Uniform Standards Act of 1998
PL 105-353 (S.1260), enacted 11/03/1998

PUBLIC LAW 105-353—NOV. 3, 1998 
112 STAT. 3227 
Public Law 105-353 
105th Congress 
An Act 
To amend the Securities Act of 1933 and the Securities Exchange Act of 1934 
to limit the conduct of securities class actions under State law, and for other 
purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the "Securities Litigation Uniform 
Standards Act of 1998". 
SEC. 2. FINDINGS. 
The Congress finds that— 
(1) the Private Securities Litigation Reform Act of 1995 
sought to prevent abuses in private securities fraud lawsuits; 
(2) since enactment of that legislation, considerable evi-
dence has been presented to Congress that a number of securi-
ties class action lawsuits have shifted from Federal to State 
courts; 
(3) this shift has prevented that Act from fully achieving 
its objectives; 
(4) State securities regulation is of continuing importance, 
together with Federal regulation of securities, to protect inves-
tors and promote strong financial markets; and 
(5) in order to prevent certain State private securities 
class action lawsuits alleging fraud from being used to frustrate 
the objectives of the Private Securities Litigation Reform Act 
of 1995, it is appropriate to enact national standards for securi-
ties class action lawsuits involving nationally traded securities, 
while preserving the appropriate enforcement powers of State 
securities regulators and not changing the current treatment 
of individual lawsuits. 
TITLE I—SECURITIES LITIGATION 
UNIFORM STANDARDS 
Nov. 3, 1998 
[S. 1260] 
Securities 
Litigation 
Uniform 
Standards Act of 
1998 
15 u s e 78a note. 
15 u s e 78a note. 
SEC. 101. LIMITATION ON REMEDIES. 
(a) AMENDMENTS TO THE SECURITIES ACT OF 1933.— 
(1) AMENDMENT.—Section 16 of the Securities Act of 1933 
(15 U.S.C. 77p) is amended to read as follows: 
"SEC. 16. ADDITIONAL REMEDIES; LIMITATION ON REMEDIES. 
"(a) REMEDIES ADDITIONAL.—Except as provided in subsection 
(b), the rights and remedies provided by this title shall be in 
112 STAT. 3228 
PUBLIC LAW 105-353—NOV. 3, 1998 
addition to any and all other rights and remedies that may exist 
at law or in equity. 
"(b) CLASS ACTION LIMITATIONS.—No covered class action based 
upon the statutory or common law of any State or subdivision 
thereof may be maintained in any State or Federal court by any 
private party alleging— 
"(1) an untrue statement or omission of a material fact 
in connection with the purchase or sale of a covered security; 
or 
"(2) that the defendant used or employed any manipulative 
or deceptive device or contrivance in connection with the pur-
chase or sale of a covered security. 
"(c) REMOVAL OF COVERED CLASS ACTIONS.—Any covered class 
action brought in any State court involving a covered security, 
as set forth in subsection (b), shall be removable to the Federal 
district court for the district in which the action is pending, and 
shall be subject to subsection (b). 
"(d) PRESERVATION OF CERTAIN ACTIONS.— 
"(1) ACTIONS UNDER STATE LAW OF STATE OF INCORPORA-
TION.— 
"(A) ACTIONS PRESERVED.—Notwithstanding subsection 
(b) or (c), a covered class action described in subparagraph 
(B) of this paragraph that is based upon the statutory 
or common law of the State in which the issuer is incor-
porated (in the case of a corporation) or organized (in 
the case of any other entity) may be maintained in a 
State or Federal court by a private party. 
"(B) PERMISSIBLE ACTIONS.—A covered class action is 
described in this subparagraph if it involves— 
"(i) the purchase or sale of securities by the issuer 
or an affiliate of the issuer exclusively from or to 
holders of equity securities of the issuer; or 
"(ii) any recommendation, 
position, or 
other 
communication with respect to the sale of securities 
ofthe issuer that— 
"(I) is made by or on behgdf of the issuer 
or an affiliate of the issuer to holders of equity 
securities of the issuer; eind 
"(II) concerns decisions of those equity holders 
with respect to voting their securities, acting in 
response to a tender or exchange offer, or exercis-
ing dissenters' or appraisal rights. 
"(2) STATE ACTIONS.— 
"(A) IN GENERAL.—Notwithstanding any other provi-
sion of this section, nothing in this section may be con-
strued to preclude a State or political subdivision thereof 
or a State pension plan from bringing an action involving 
a covered security on its own behalf, or as a member 
of a class comprised solely of other States, political subdivi-
sions, or State pension plans that are named plaintiffs, 
and that have authorized participation, in such action. 
"(B) STATE PENSION PLAN DEFINED.—For purposes of 
this paragraph, the term 'State pension plan' means a 
pension plan established and maintained for its employees 
by the government of the State or political subdivision 
thereof, or by any agency or instrumentality thereof 
PUBLIC LAW 105-353—NOV. 3, 1998 
112 STAT. 3229 
"(3) ACTIONS UNDER CONTRACTUAL AGREEMENTS BETWEEN 
ISSUERS AND INDENTURE TRUSTEES.—Notwithstanding sub-
section (b) or (c), a covered class action that seeks to enforce 
a contractual agreement between an issuer and an indenture 
trustee may be maintained in a State or Federal court by 
a party to the agreement or a successor to such party. 
"(4) REMAND OF REMOVED ACTIONS.—In an action that has 
been removed from a State court pursuant to subsection (c), 
if the Federal court determines that the action may be main-
tained in State court pursuant to this subsection, the Federal 
court shall remand such action to such State court. 
"(e) PRESERVATION OF STATE JURISDICTION.—The securities 
commission (or any agency or office performing like functions) of 
any State shall retain jurisdiction under the laws of such State 
to investigate and bring enforcement actions. 
"(f) DEFINITIONS.—For purposes of this section, the following 
definitions shall apply: 
"(1) AFFILIATE OF THE ISSUER.—The term 'affiliate of the 
issuer' means a person that directly or indirectly, through one 
or more intermediaries, controls or is controlled by or is under 
common control with, the issuer. 
"(2) COVERED CLASS ACTION.— 
"(A) IN GENERAL.—The term 'covered class action' 
means— 
"(i) any single lawsuit in which— 
"(I) damages are sought on behalf of more 
than 50 persons or prospective class members, eind 
questions of law or fact common to those persons 
or members of the prospective class, without ref-
erence to issues of individualized reliance on an 
alleged misstatement or omission, predominate 
over any questions affecting only individual per-
sons or members; or 
"(II) one or more named parties seek to recover 
damages on a representative basis on behalf of 
themselves and other unnamed parties similarly 
situated, and questions of law or fact common 
to those persons or members of the prospective 
class predominate over any questions affecting 
only individusil persons or members; or 
"(ii) any group of lawsuits filed in or pending in 
the same court and involving common questions of 
law or fact, in which— 
"(I) damages are sought on behalf of more 
than 50 persons; and 
"(II) the lawsuits are joined, consolidated, or 
otherwise proceed as a single action for any pur-
pose. 
"(B) 
EXCEPTION FOR DERIVATIVE ACTIONS.—Notwith-
standing subpeiragraph (A), the term 'covered class action' 
does not include an exclusively derivative action brought 
by one or more shareholders on behalf of a corporation. 
"(C) COUNTING OF CERTAIN CLASS MEMBERS.—For pur-
poses of this paragraph, a corporation, investment com-
pany, pension plan, partnership, or other entity, shall be 
treated as one person or prospective class member, but 
112 STAT. 3230 
PUBLIC LAW 105-353—NOV. 3, 1998 
only if the entity is not established for the purpose of 
participating in the action. 
"(D) RULE OF CONSTRUCTION.—Nothing in this para-
graph shall be construed to affect the discretion of a State 
court in determining whether actions filed in such court 
should be joined, consolidated, or otherwise allowed to pro-
ceed as a single action. 
"(3) COVERED SECURITY.—The term 'covered security means 
a security that satisfies the standards for a covered security 
specified in paragraph (1) or (2) of section 18(b) at the time 
during which it is alleged that the misrepresentation, omission, 
or manipulative or deceptive conduct occurred, except that such 
term shall not include any debt security that is exempt from 
registration under this title pursuant to rules issued by the 
Commission under section 4(2).". 
(2) CIRCUMVENTION OF STAY OF DISCOVERY.—Section 27(b) 
of the Securities Act of 1933 (15 U.S.C. 77z-l(b)) is amended 
by inserting after paragraph (3) the following new paragraph: 
"(4) CIRCUMVENTION OF STAY OF DISCOVERY.—Upon a 
proper showing, a court may stay discovery proceedings in 
any private action in a State court as necessary in aid of 
its jurisdiction, or to protect or effectuate its judgments, in 
an action subject to a stay of discovery pursuant to this sub-
section.". 
(3) CONFORMING AMENDMENTS.—Section 22(a) of the Securi-
ties Act of 1933 (15 U.S.C. 77v(a)) is amended— 
(A) by inserting "except as provided in section 16 with 
respect to covered class actions," after "Territorial courts,"; 
and 
(B) by striking "No case" and inserting "Except as 
provided in section 16(c), no case". 
(b) AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.— 
(1) AMENDMENT.—Section 28 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78bb) is amended— 
(A) in subsection (a), by striking "The rights and rem-
edies" and inserting "Except as provided in subsection (f), 
the rights and remedies"; and 
(B) by adding at the end the following new subsection: 
"(f) LIMITATIONS ON REMEDIES.— 
"(1) CLASS ACTION LIMITATIONS.—NO covered class action 
based upon the statutory or common law of any State or sub-
division thereof may be maintained in any State or Federal 
court by any private party alleging— 
"(A) a misrepresentation or omission of a material fact 
in connection with the purchase or sale of a covered secu-
rity; or 
"(B) that the defendant used or employed any manipu-
lative or deceptive device or contrivance in connection with 
the purchase or sale of a covered security. 
"(2) REMOVAL OF COVERED CLASS ACTIONS.—Any covered 
class action brought in any State court involving a covered 
security, as set forth in paragraph (1), shall be removable 
to the Federal district court for the district in which the action 
is pending, and shall be subject to paragraph (1). 
"(3) PRESERVATION OF CERTAIN ACTIONS.— 
"(A) ACTIONS UNDER STATE LAW OF STATE OF INCORPO-
RATION.— 
.,, . : 
PUBLIC LAW 105-353—NOV. 3, 1998 
112 STAT. 3231 
"(i) ACTIONS PRESERVED.—Notwithstanding para-
graph (1) or (2), a covered class action described in 
clause (ii) of this subparagraph that is based upon 
the statutory or common law of the State in which 
the issuer is incorporated (in the case of a corporation) 
or organized (in the case of any other entity) may 
be maintained in a State or Federal court by a private 
party. 
"(ii) PERMISSIBLE ACTIONS.—A covered class action 
is described in this clause if it involves— 
"(I) the purchase or sale of securities by the 
issuer or an af&liate of the issuer exclusively from 
or to holders of equity securities of the issuer; 
or 
"(II) any recommendation, position, or other 
communication with respect to the sale of securi-
ties of an issuer that— 
"(aa) is made by or on behalf of the issuer 
or an affiliate of the issuer to holders of equity 
securities of the issuer; and 
"(bb) concerns decisions of such equity 
holders with respect to voting their securities, 
acting in response to a tender or exchange 
offer, or exercising dissenters' or appraisal 
rights. 
"(B) STATE ACTIONS.— 
"(i) IN GENERAL.—Notwithstanding any 
other 
provision of this subsection, nothing in this subsection 
may be construed to preclude a State or political sub-
division thereof or a State pension plan from bringing 
an action involving a covered security on its own behalf, 
or as a member of a class comprised solely of other 
States, politicsd subdivisions, or State pension plans 
that are named plaintiffs, and that have authorized 
participation, in such action. 
"(ii) STATE PENSION PLAN DEFINED.—For purposes 
of this subparagraph, the term 'State pension plan' 
means a pension plan established and maintained for 
its employees by the government of a State or political 
subdivision thereof, or by any agency or instrumental-
ity thereof. 
"(C) 
ACTIONS 
UNDER 
CONTRACTUAL 
AGREEMENTS 
BETWEEN ISSUERS AND INDENTURE TRUSTEES.—Notwith-
standing paragraph (1) or (2), a covered class action that 
seeks to enforce a contractual agreement between an issuer 
and an indenture trustee may be maintained in a State 
or Federal court by a party to the agreement or a successor 
to such party. 
"(D) REMAND OF REMOVED ACTIONS.—In an action that 
has been removed from a State court pursuant to paragraph 
(2), if the Federal court determines that the action may 
be maintained in State court pursuant to this subsection, 
the Federal court shall remand such action to such State 
court. 
"(4) PRESERVATION OF STATE JURISDICTION.—The securities 
commission (or any agency or ofBce performing like functions) 
112 STAT. 3232 
PUBLIC LAW 105-353—NOV. 3, 1998 
of any State shall retain jurisdiction under the laws of such 
State to investigate and bring enforcement actions. 
Applicability. 
"(5) DEFINITIONS.—For purposes of this subsection, the fol-
lowing definitions shall apply: 
"(A) AFFILIATE OF THE ISSUER.—The term 'affiliate of 
the issuer' means a person that directly or indirectly, 
through one or more intermediaries, controls or is con-
trolled by or is under common control with, the issuer. 
"(B) COVERED CLASS ACTION.—The term 'covered class 
action' means— 
"(i) any single lawsuit in which— 
"(I) damages are sought on behalf of more 
than 50 persons or prospective class members, and 
questions of law or fact common to those persons 
or members of the prospective class, without ref-
erence to issues of individualized reliance on an 
alleged misstatement or omission, predominate 
over any questions affecting only individual per-
sons or members; or 
"(II) one or more named parties seek to recover 
damages on a representative basis on behalf of 
themselves and other unnamed parties similarly 
situated, and questions of law or fact common 
to those persons or members of the prospective 
class predominate over any questions affecting 
only individual persons or members; or 
"(ii) any group of lawsuits filed in or pending in 
the same court and involving common questions of 
law or fact, in which— 
"(I) damages are sought on behalf of more 
than 50 persons; and 
"(II) the lawsuits are joined, consolidated, or 
otherwise proceed as a single action for any pur-
pose. 
"(C) 
EXCEPTION FOR DERIVATIVE ACTIONS.—Notwith-
standing subparagraph (B), the term 'covered class action' 
does not include an exclusively derivative action brought 
by one or more shareholders on behalf of a corporation. 
"(D) COUNTING OF CERTAIN CLASS MEMBERS.—For pur-
poses of this paragraph, a corporation, investment com-
pany, pension plan, partnership, or other entity, shall be 
treated as one person or prospective class member, but 
only if the entity is not established for the purpose of 
participating in the action. 
"(E) COVERED SECURITY.—The term 'covered security' 
means a security that satisfies the standards for a covered 
security specified in paragraph (1) or (2) of section 18(b) 
of the Securities Act of 1933, at the time during which 
it is alleged that the misrepresentation, omission, or 
manipulative or deceptive conduct occurred, except that 
such term shall not include any debt security that is exempt 
fi*om registration under the Securities Act of 1933 pursuant 
to rules issued by the Commission under section 4(2) of 
that Act. 
"(F) RULE OF CONSTRUCTION.—Nothing in this para-
graph shall be construed to affect the discretion of a State 
court in determining whether actions filed in such court 
PUBLIC LAW 105-353—NOV. 3, 1998 
112 STAT. 3233 
should be joined, consolidated, or otherwise allowed to pro-
ceed as a single action.". 
(2) 
CIRCUMVENTION 
OF 
STAY 
OF DISCOVERY.—Section 
21D(b)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 
78u-4(b)(3)) is amended by adding at the end the following 
new subparagraph: 
"(D) CIRCUMVENTION OF STAY OF DISCOVERY.—Upon 
a proper showing, a court may stay discovery proceedings 
in any private action in a State court, as necessary in 
aid of its jurisdiction, or to protect or effectuate its judg-
ments, in an action subject to a stay of discovery pursuant 
to this paragraph.". 
(c) APPLICABILITY.—The amendments made by this section shall 
15 use 77p note. 
not affect or apply to any action commenced before and pending 
on the date of enactment of this Act. 
SEC. 102. PROMOTION OF RECIPROCAL SUBPOENA ENFORCEMENT. 
15 USC 78u note. 
(a) 
COMMISSION 
ACTION.—The 
Securities 
and 
Exchange 
Commission, in consultation with State securities commissions (or 
any agencies or offices performing like functions), shall seek to 
encourage the adoption of State laws providing for reciprocal 
enforcement by State securities commissions of subpoenas issued 
by smother State securities commission seeking to compel persons 
to attend, testify in, or produce documents or records in connection 
with an action or investigation by a State securities commission 
of an alleged violation of State securities laws. 
(b) REPORT.—Not later than 24 months after the date of enact- Deadline, 
ment of this Act, the Securities and Exchange Commission (here-
after in this section referred to as the "Commission") shall submit 
a report to the Congress— 
(1) identifying the States that have adopted laws described 
in subsection (a); 
(2) describing the actions undertaken by the Commission 
and State securities commissions to promote the adoption of 
such laws; and 
(3) identifying £iny further actions that the Commission 
recommends for such purposes. 
TITLE II—REAUTHORIZATION OF THE 
SECURITIES AND EXCHANGE COMMIS-
SION 
SEC. 201. AUTHORIZATION OF APPROPRIATIONS. 
Section 35 of the Securities Exchange Act of 1934 (15 U.S.C. 
78kk) is amended to read as follows: 
"SEC. 35. AUTHORIZATION OF APPROPRIATIONS. 
"(a) IN GENERAL.—In addition to any other funds authorized 
to be appropriated to the Commission, there are authorized to 
be appropriated to carry out the functions, powers, and duties 
of the Commission, $351,280,000 for fiscal year 1999. 
"(b) MISCELLANEOUS EXPENSES.—Fimds appropriated pursuant 
to this section are authorized to be expended— 
"(1) not to exceed $3,000 per fiscal year, for official reception 
and representation expenses; 
112 STAT. 3234 
PUBLIC LAW 105-353—NOV. 3, 1998 
"(2) not to exceed $10,000 per fiscal year, for funding a 
permanent secretariat for the International Organization of 
Securities Commissions; and 
"(3) not to exceed $100,000 per fiscal year, for expenses 
for consultations and meetings hosted by the Commission with 
foreign governmental and other regulatory officials, members 
of their delegations, appropriate representatives, and staff to 
exchange views concerning developments relating to securities 
matters, for development and implementation of cooperation 
agreements concerning securities matters, and provision of tech-
nical assistance for the development of foreign securities mar-
kets, such expenses to include necessary logistic and adminis-
trative expenses and the expenses of Commission staff and 
foreign invitees in attendance at such consultations and meet-
ings, including— 
"(A) such incidental expenses as meals taken in the 
course of such attendsmce; 
"(B) any travel or treinsportation to or from such meet-
ings; and 
"(C) any other related lodging or subsistence.". 
SEC. 202. REQUIREMENTS FOR THE EDGAR SYSTEM. 
Section 35A of the Securities Exchange Act of 1934 (15 U.S.C. 
7811) is amended— 
(1) by striking subsections (a), (b), (c), and (e); and 
(2) in subsection (d)— 
(A) by striking "(d)"; 
(B) in paragraph (2), by striking "; and" at the end 
and inserting a period; and 
(C) by strikmg paragraph (3). 
SEC. 203. COMMISSION PROFESSIONAL ECONOMISTS. 
Section 4(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
78d(b)) is amended— 
(1) by redesignating paragraph (2) as paragraph (3); and 
(2) by inserting after paragraph (1) the following: 
"(2) ECONOMISTS.— 
"(A) 
COMMISSION AUTHORITY.—Notwithstanding 
the 
provisions of chapter 51 of title 5, United States Code, 
the Commission is authorized— 
"(i) to establish its own criteria for the selection 
of such professional economists as the Commission 
deems necessary to carry out the work of the Commis-
sion; 
"(ii) to appoint directly such professional econo-
mists as the Commission deems qualified; suid 
"(iii) to fix and adjust the compensation of any 
professional economist appointed under this paragraph, 
without regard to the provisions of chapter 54 of title 
5, United States Code, or subchapters II, III, or VIII 
of chapter 53, of title 5, United States Code. 
"(B) LIMITATION ON COMPENSATION.—NO base com-
pensation fixed for an economist under this paragraph 
• 
may exceed the pay for Level IV of the Executive Schedule, 
and no payments to an economist appointed under this 
paragraph shall exceed the limitation on certain pajonents 
in section 5307 of title 5, United States Code. 
PUBLIC LAW 105-353—NOV. 3, 1998 
112 STAT. 3235 
"(C) OTHER BENEFITS.—All professional 
economists 
appointed under this paragraph shall remain within the 
existing civil service system with respect to employee bene-
fits.". 
TITLE III—CLERICAL AND TECHNICAL 
AMENDMENTS 
SEC. 301. CLERICAL AND TECHNICAL AMENDMENTS. 
(a) SECURITIES ACT OF 1933.—The Securities Act of 1933 (15 
U.S.C. 77 et seq.) is amended as follows: 
(1) Section 2(a)(15)(i) (15 U.S.C. 77b(a)(15)(i)) is amended— 
(A) by striking "3(a)(2) of the Act" and inserting 
"3(a)(2)"; and 
(B) by striking "section 2(13) of the Act" and inserting 
"paragraph (13) of this subsection". 
(2) Section 11(f)(2)(A) (15 U.S.C. 77k(f)(2)(A)) is amended 
by striking "section 38" and inserting "section 21D(f)". 
(3) Section 13 (15 U.S.C. 77m) is amended— 
(A) by striking "section 12(2)" each place it appears 
and inserting "section 12(a)(2)"; and 
(B) by striking "section 12(1)" each place it appears 
and inserting "section 12(a)(1)". 
(4) Section 18 (15 U.S.C. 77r) is amended— 
(A) in subsection (b)(1)(A), by inserting ", or authorized 
for listing," after "Exchange, or listed"; 
(B) in subsection (c)(2)(B)(i), by striking "Capital Mar-
kets Efficiency Act of 1996" and inserting "National Securi-
ties Markets Improvement Act of 1996"; 
(C) in subsection (c)(2)(C)(i), by striking "Market" and 
inserting "Markets"; 
(D) in subsection (d)( 1)(A)— 
(i) by striking "section 2(10)" and inserting "section 
2(a)(10)"; and 
(ii) by striking "subparagraphs (A) and (B)" and 
inserting "subparagraphs (a) and (b)"; 
(E) in subsection (d)(2), by striking "Securities Amend-
ments Act of 1996" and inserting "National Securities Mar-
kets Improvement Act of 1996"; and 
(F) in subsection (d)(4), by striking "For purposes of 
this pEiragraph, the" and inserting "The". 
(5) Actions 27, 27A, and 28 (15 U.S.C. 77z-l, 77z-2, 77z-
3) are transferred to appear after section 26, in that order. 
(6) Paragraph (28) of schedule A of such Act (15 U.S.C. 
77aa(28)) is amended by striking "identic" and inserting "iden-
tical". 
(b) 
SECURITIES 
EXCHANGE ACT OF 1934.—The Securities 
Exchange Act of 1934 (15 U.S.C. 78 et seq.) is amended as follows: 
(1) Section 3(a)(10) (15 U.S.C. 78c(a)(10)) is amended by 
striking "deposit, for" and inserting "deposit for". 
(2) Section 3(a)(12)(A)(vi) (15 U.S.C. 78c(a)(12)(A)(vi)) is 
amended by moving the metrgin 2 em spaces to the left. 
(3) Section 3(a)(22)(A) (15 U.S.C. 78c(a)(22)(A)) is amend-
ed— 
(A) by striking "section 3(h)" and inserting "section 
3"; and 
112 STAT. 3236 
PUBLIC LAW 105-353—NOV. 3, 1998 
(B) by striking "section 3(t)" and inserting "section 
3". 
(4) Section 3(a)(39)(B)(i) (15 U.S.C. 78c(a)(39)(B)(i)) is 
amended by striking "an order to the Commission" and insert-
ing "an order of the Commission". 
(5) The following sections are each amended by striking 
"Federal Reserve Board" and inserting "Board of Governors 
of the Federal Reserve System": subsections (a) and (b) of 
section 7 (15 U.S.C. 78g (a), (b)); section 17(g) (15 U.S.C. 78q(g)); 
and section 26 (15 U.S.C. 78z). 
(6) The heading of subsection (d) of section 7 (15 U.S.C. 
78g(d)) is amended by striking "EXCEPTION" and inserting 
"EXCEPTIONS". 
(7) Section 14(g)(4) (15 U.S.C. 78n(g)(4)) is amended by 
striking "consolidation sale," and inserting "consolidation, 
sale ". 
(8) Section 15 (15 U.S.C. 78o) is amended— 
(A) in subsection (c)(8), by moving the margin 2 em 
spaces to the left; 
(B) in subsection (h)(2), by striking "affecting" and 
inserting "effectincr"* 
(C) in subsection (h)(3)(A)(i)(II)(bb), by inserting "or" 
after the semicolon; 
(D) in subsection (h)(3)(A)(ii)(I), by striking "maintains" 
and inserting "maintained"; 
(E) in subsection (h)(3)(B)(ii), by striking "association" 
and inserting "associated". 
(9) Section 15B(c)(4) (15 U.S.C. 78o-4(c)(4)) is amended 
by striking "convicted by any offense" and inserting "convicted 
of any offense". 
(10) Section 15C(f)(5) (15 U.S.C. 78o-5(f)(5)) is amended 
by striking "any person or class or persons" £ind inserting 
"any person or class of persons". 
(11) Section 19(c)(5) (15 U.S.C. 78s(c)(5)) is amended by 
moving the margin 2 em spaces to the right. 
(12) Section 20 (15 U.S.C. 78t) is amended by redesignating 
subsection (f) as subsection (e). 
(13) Section 21D (15 U.S.C. 78U-4) is amended— 
(A) in subsection (g)(2)(B)(i), by striking "paragraph 
(1)" and inserting "subparagraph (A)". 
(B) by redesignating subsection (g) as subsection (f); 
and 
(14) Section 31(a) (15 U.S.C. 78ee(a)) is amended by strik-
ing "this subsection" and inserting "this section". 
(c) INVESTMENT COMPANY ACT OF 1940.—The Investment Com-
pany Act of 1940 (15 U.S.C. 80a-l et seq.) is amended as follows: 
(1) Section 2(a)(8) (15 U.S.C. 80a-2(a)(8)) is amended by 
striking "Unitde" and inserting "United". 
(2) Section 3(b) (15 U.S.C. 80a-3(b)) is amended by striking 
"paragraph (3) of subsection (a)" and inserting "paragraph (1)(C) 
of subsection (a)". 
(3) 
Section 
12(d)(l)(G)(i)(III)(bb) 
(15 
U.S.C. 
80a-
12(d)(l)(G)(i)(III)(bb)) is amended by striking "the acquired 
fund" and inserting "the acquired company". 
(4) Section 18(e)(2) (15 U.S.C. 80a-18(e)(2)) is amended 
by striking "subsection (e)(2)" and inserting "paragraph (1) 
of this subsection". 
PUBLIC LAW 105-353—NOV. 3, 1998 
112 STAT. 3237 
(5) Section 30 (15 U.S.C. 80a-29) is amended— 
(A) by inserting "and" after the semicolon at the end 
of subsection (b)(1); 
(B) in subsection (e), by striking "semi-annually" and 
inserting "semiannually"; and 
(C) by redesignating subsections (g) and (h), as added 
by section 508(g) of the National Securities Markets 
Improvement Act of 1996, as subsections (i) and (j), respec-
tively. 
(6) Section 31(f) (15 U.S.C. 80a-30(f)) is amended by strik-
ing "subsection (c)" and inserting "subsection (e)". 
(d) INVESTMENT ADVISERS ACT OF 1940.—The Investment 
Advisers Act of 1940 (15 U.S.C. 80b et seq.) is amended as follows: 
(1) Section 203(e)(8)(B) (15 U.S.C. 80b-3(e)(8)(B)) is amend-
ed by inserting "or" after the semicolon. 
(2) Section 222(b)(2) (15 U.S.C. 80b-18a(b)(2)) is amended 
by striking "principle" and inserting "principal". 
(e) TRUST INDENTURE ACT OF 1939.—The Trust Indenture Act 
of 1939 (15 U.S.C. 77aaa et seq.) is amended as follows: 
(1) Section 303 (15 U.S.C. 77ccc) is amended by striking 
"section 2" each place it appears in paragraphs (2) and (3) 
and inserting "section 2(a)". 
(2) Section 304(a)(4)(A) (15 U.S.C. 77ddd(a)(4)(A)) is amend-
ed by striking "(14) of subsection" and inserting "(13) of section". 
(3) Section 313(a) (15 U.S.C. 77mmm(a)) is amended— 
(A) by inserting "any change to" after the paragraph 
designation at the beginning of paragraph (4); and 
(B) by striking "any change to" in paragraph (6). 
(4) Section 319(b) (15 U.S.C. 77sss(b)) is amended by strik-
ing "the Federal Register Act" and inserting "chapter 15 of 
title 44, United States Code,". 
SEC. 302. EXEMPTION OF SECURITIES ISSUED IN CONNECTION WITH 
CERTAIN STATE HEARINGS. 
Section 18(b)(4)(C) of the Securities Act of 1933 (15 U.S.C. 
77r(b)(4)(C)) is amended by striking "paragraph (4) or (11)" and 
inserting "paragraph (4), (10), or (11) . 
Approved November 3, 1998. 
L E G I S L A T I V E H I S T O R Y — S . 1260 (H.R. 1689): 
HOUSE REPORTS: Nos. 105-640 accompanying H.R. 1689 (Comm. on Commerce) 
and 105-803 (Comm. of Conference). 
SENATE REPORTS: No. 105-182 (Comm. on Banking, Housing, and Urban Af-
fairs). 
CONGRESSIONAL RECORD, Vol. 144 (1998): 
May 13, considered and passed Senate. 
July 22, considered and passed House, amended, in lieu of H.R. 1689. 
Oct. 13, House and Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 34 (1998): 
Nov. 3, Presidential statement.