An Act to providing for full disclosure of corporate equity ownership of securities under the Securities Exchange Act of 1934
PL 90-439 (S.510), enacted 07/29/1968

454 
PUBLIC LAW 90-439-JULY 29, 1968 
[82 STAT. 
Public Law 90-439 
July 29, 1968 
AN ACT 
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Providing for full disclosure of corporate equity ownership of securities under 
the Securities Exchange Act of 1934. 
Securities Ex-
change Act of 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assemhled, That section 12 (i) 
i934r°amendment. of the Sscurities Exchaiige Act of 1934 is amended by striking out 
78 Stat. 568. 
"sections 12, 13, 14(a), 14(c), and 16" and inserting in lieu thereof 
15USC78Z. 
"sections 12,13,14(a), 14(c), 14(d), 14(f), and 16". 
15 use 7
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^^^^' ?' ^^^^i^n 13 of the Securities Exchange Act of 1934 is amended 
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by adding at the end thereof the following new subsections: 
"(d) (1) Any person who, after acquiring directly or indirectly the 
beneficial ownership of any equity security of a class which is regis-
tered pursuant to section 12 of this title or any equity security issued 
by a closed-end investment company registered under the Investment 
15 us^c 8'oa 51 Compauy Act of 1940, is directly or indirectly the beneficial owner of 
more than 10 per centum of such class shall, within ten days after such 
acquisition, send to the issuer of the security at its principal execu-
tive office, by registered or certified mail, send to each exchange where 
the security is traded, and file with the Commission, a statement con-
taining such of the following information, and such additional in-
formation, as the Commission may by rules and regulations prescribe 
as necessary or appropriate in the public interest or for the protec-
tion of investors— 
"(A) the background and identity of all persons by whom or 
on whose behalf the purchases have been or are to be effected; 
"(B) the source and amount of the funds or other consideration 
used or to be used in making the purchases, and if any part of the 
purchase price or proposed purchase price is represented or is 
to be represented by funds or other consideration borrowed or 
otherwise obtained for the purpose of acquiring, holding, or 
trading such security, * description of the transaction and the 
names of the parties thereto, except that where a source of funds 
is a loan made in the ordinary course of business by a bank, as 
defined in section 3(a)(6) of this title, if the person filing such 
statement so requests, the name of the bank shall not be made 
available to the public; 
"(C) if the purpose of the purchases or prospective purchases 
is to acquire control of the business of the issuer of the securities, 
any plans or proposals which such persons may have to liquidate 
such issuer, to sell its assets to or mer^e it with any other persons, 
or to make any other major change in its business or corporate 
structure; 
"(D) the number of shares of such security which are bene-
ficially owned, and the number of shares concerning which there 
is a ri^ht to acquire, directly or indirectly, bj^ (i) such person, 
and (ii) by each associate oi such person, giving the name and 
address of each such associate; and 
"(E) information as to any contracts, arrangements, or under-
standings with any person with respect to any securities of the 
issuer, including but not limited to transfer of any of the securi-
ties, joint ventures, loan or option arrangements, puts or calls, 
guaranties of loans, guaranties against loss or guaranties of 
profits, division of losses or profits, or the giving or withholding 
of proxies, naming the persons with whom such contracts^ ar-
rangements, or understandings have been entered into, and giving 
the details thereof. 
48 Stat. 883. 
15 u s e 78c. 
82 STAT. ] 
PUBLIC LAW 90-439-JULY 29, 1968 
455 
"(2) If any material change occurs in the facts set forth in the 
statements to the issuer and the exchange, and in the statement filed 
with the Commission, an amendment shall be transmitted to the issuer 
and the exchange and shall be filed with the Commission, in accordance 
with such rules and regulations as the Commission may prescribe as 
necessary or appropriate in the public interest or for the protection of 
investors. 
"(3) When two or more persons act as a partnership, limited part- 
"Person." 
nership, syndicate, or other group for the purpose of acquiring, hold-
ing, or disposing of securities of an issuer, such syndicate or group 
shall be deemed a 'person' for the purposes of this subsection. 
"(4) In determining, for purposes of this subsection, any percentage 
of a class of any security, such class shall be deemed to consist of the 
amount of the outstanding securities of such class, exclusive of any 
securities of such class held by or for the account of the issuer or a 
subsidiary of the issuer. 
"(5) The provisions of this subsection shall not apply to— 
"(A) any acquisition or offer to acquire securities made or 
proposed to be made by means of a registration statement under 
the Securities Act of 1933; 
48 stat. 74. 
"(B) any acquisition of the beneficial ownership of a security 
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which, together with all other acquisitions by the same person 
of securities of the same class during the preceding twelve 
months, does not exceed 2 per centum of that class; 
"(C) any acquisition of an equity security by the issuer of such 
security; 
"(D) any acquisition or proposed acquisition of a security 
which the Commission, by rules or regulations or by order, shall 
exempt from the provisions of this subsection as not entered 
into for the purpose of, and not having the effect of, changing or 
influencing the control of the issuer or otherwise as not compre-
hended within the purposes of this subsection. 
"(e)(1) It shall be unlawful for an issuer which has a class of 
equity securities registered pursuant to section 12 of this title, or which 
is use 78/. 
is a closed-end investment company registered under the Investment 
Company Act of 1940, to purchase any equity security issued by it 
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if such purchase is in contravention of such rules and regulations as 
the Commission, in the public interest or for the protection of in-
vestors, may adopt (A) to define acts and practices which are fraudu-
lent, deceptive, or manipulative, and (B) to prescribe means reason-
ably designed to prevent such acts and practices. Such rules and 
regulations may require such issuer to provide holders of equity 
securities of such class with such information relating to the reasons 
for such purchase, the source of funds, the number of shares to be pur-
chased, the price to be paid for such securities, the method of pur-
chase, and such additional information, as the Commission deems 
necessary or appropriate in the public interest or for the protection 
of investors, or which the Commission deems to be material to a 
determination whether such security should be sold. 
"(2) For the purpose of this subsection, a purchase by or for the 
issuer or any person controlling, controlled by, or under common 
control with the issuer, or a purchase subject to control of the issuer or 
any such person, shall be deemed to be a purchase by the issuer." 
SEC. 3. Section 14 of the Securities Exchange Act of 1934 is amended 
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by adding at the end thereof the following new subsections: 
96-600 O - 69 - 32 
456 
PUBLIC LAW 90-439-JULY 29, 1968 
[82 STAT. 
"(d) (1) It shall be unlawful for any person, directly or-indirectly, 
by use of the mails or by any means or instrumentality of interstate 
commerce or of any facility of a national securities exchange or other-
wise, to make a tender offer for, or a request or invitation for tenders 
of, any class of any equity security which is registered pursuant to 
15 use 78/. 
section 12 of this title, or any equity security issued by a closed-end 
investment company registered under the Investment Company Act 
15 use 80a-5i. 
of 1940, if, after consummation thereof, such person would, directly 
or indirectly, be the beneficial owner of more than 10 per centum of 
such class, unless at the time copies of the offer or request or invitation 
are first published or sent or given to security holders such person 
has filed w'ith the Commission a statement containing such of the 
Ante. p. 454. 
information specified in section 13(d) of this title, and such additional 
information as the Commission may by rules and regulations prescribe 
as necessary or appropriate in the public interest or for the protection 
of investors. All requests or invitations for tenders or advertisements 
making a tender offer or requesting or inviting tenders of such a secu-
rity shall be filed as a part of such statement and shall contain such of 
the information contained in such statement as the Commission may 
by rules and regulations prescribe. Copies of any additional material 
soliciting or requesting such tender offers subsequent to the initial 
solicitation or request shall contain such information as the Com-
mission may by rules and regulations prescribe as necessary or appro-
priate in the public interest or for the protection of investors, and 
shall be filed with the Commission not later than the time copies of 
such material are first published or sent or given to security holders. 
Copies of all statements, in the form in which such material is fur-
nished to security holders and the Commission, shall be sent to the 
issuer not later than the date such material is first published or sent or 
given to any security holders. 
"Person." 
«(£) When two or more persons act as a partnership, limited 
partnership, syndicate, or other ^roup for the purpose of acquiring, 
holding, or disposing of securities of an issuer, such syndicate or 
group shall be deemed a 'person' for purposes of this subsection. 
"(3) In determining, for purposes of this subsection, any percent-
age of a class of any security, such class shall be deemed to consist of 
the amount of the outstanding securities of such class, exclusive of 
any securities of such class held by or for the account of the issuer or 
a subsidiary of the issuer. 
"(4) Any solicitation or recommendation to the holders of such 
a security to accept or reject a tender offer or request or invitation for 
tenders shall be made in accordance with such rules and regulations 
as the Commission may prescribe as necessary or appropriate in the 
public interest or for the protection of investors. 
"(5) Securities deposited pursuant to a tender offer or request or 
invitation for tenders may be withdrawn by or on behalf of the de-
'positor at any time until the expiration of seven days after the time 
definitive copies of the offer or request or invitation are first published 
or sent or given to security holders, and at any time after sixty days 
from the date of the original tender offer or request or invitation, ex-
cept as the Commission may otherwise prescribe by rules, regulations, 
or order as necessary or appropriate in the public interest or for the 
protection of investors. 
82 STAT. ] 
PUBLIC LAW 90-439-JULY 29, 1968 
457 
"(6) Where any person makes a tender offer, or request or invita-
tion for tenders, for less than all the outstanding equity securities of 
a class, and where a greater number of securities is deposited pursuant 
thereto within ten days after copies of the offer or request or invita-
tion are first published or sent or given to security holders than such 
person is bound or willing to take up and pay for, the securities taken 
up shall be taken up as nearly as may be pro rata, disregarding frac-
tions, according to the number of securities deposited by each de-
positor. The provisions of this subsection shall also apply to securities 
deposited within ten days after notice of an increase in the considera-
tion offered to security holders, as described in paragraph (7), is 
first published or sent or given to security holders. 
"(7) Where any person varies the terms of a tender offer or request 
or invitation for tenders before the expiration thereof by increasing 
the consideration offered to holders of such securities, such person shall 
pay the increased consideration to eac!h security holder whose securities 
are taken up and paid for pursuant to the tender offer or request or 
invitation for tenders whether or not such securities have been taken 
up by such person before the variation of the tender offer or request 
or invitation. 
"(8) The provisions of this subsection shall not apply to any offer 
for, or request or invitation for tenders of, any security— 
" (A) proposed to be made by means of a registration statement 
under the Securities Act of 1933; 
48 stat. 74. 
"(B) if the acquisition of such security, together with all other 
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acquisitions by the same person of securities of the same class 
during the preceding twelve months, would not exceed 2 per 
centum of that class; 
"(C) by the issuer of such security; or 
"(D) which the Commission, by rules or regulations or by order, 
shall exempt from the provisions of this subsection as not entered 
into for the purpose of, and not having the effect of, changing or 
influencing the control of the issuer or otherwise as not compre-
hended within the purposes of this subsection. 
"(e) It shall be unlawful for any person to make any untrue state-
ment of a material fact or omit to state any material fact necessary in 
order to make the statements made, in the light of the circumstances 
under which they are made, not misleading, or to engage in any fraudu-
lent, deceptive, or manipulative acts or practices, in connection with 
any tender offer or request or invitation for tenders, or any solicitation 
of security holders in opposition to or in favor of any such offer, re-
quest, or invitation. 
"(f) If, pursuant to any arrangement or understanding with the 
person or persons acquiring securities in a transaction subject to sub-
section (d) of this section or subsection (d) of section 13 of this title, 45^"'*' ^^ '*^^' 
any persons are to be elected or designated as directors of the issuer, 
otherwise than at a meeting of security holders, and the persons so 
elected or desi^ated will constitute a majority of the directors of the 
issuer, then, prior to the time any such person takes office as a director, 
and in accordance with rules and regulations prescribed by the Com-
mission, the issuer shall file with the Commission, and transmit to all 
holders of record of securities of the issuer who would be entitled to 
vote at a meeting for election of directors, information substantially 
equivalent to the information which would be required by subsection 
(a) or (c^ of this section to be transmitted if such person or persons 
were nominees for election as directors at a meeting of such security 
holders." 
Approved July 29, 1968.