(c) The Commission may protect any information in its possession which may require classification in the interests of national defense pending determination by an appropriate department or agency as to whether such information should be classified.

[20 F.R. 7034, Sept. 20, 1955]

§ 230.172 Consent to service of process to be furnished by nonresident brokers or dealers and by nonresident general partners or managing agents of brokers or dealers.

(a) Each nonresident broker or dealer registered or applying for registration pursuant to section 15(b) of the Securities Exchange Act of 1934, each nonresident general partner of a broker or dealer partnership which is registered or applying for registration, and each nonresident managing agent of any other unincorporated broker or dealer which is registered or applying for registration, shall furnish to the Commission, in a form prescribed by or acceptable to it, a written irrevocable consent and power of attorney which (1) designates the Securities and Exchange Commission as an agent upon whom may be served any process, pleadings, or other papers in any civil suit or action brought in any appropriate court in any place subject to the jurisdiction of the United States, with respect to any cause of action (i) which accrues during the period beginning when such broker or dealer becomes registered pursuant to section 15 of the Securities Exchange Act of 1934 and the rules and regulations thereunder and ending either when such registration is cancelled or revoked, or when the Commission receives from such broker or dealer a notice to withdraw from such registration, whichever is earlier, (ii) which arises out of any activity, in any place subject to the jurisdiction of the United States, occurring in connection with the conduct of business of a broker or dealer, and (iii) which is founded, directly or indirectly, upon the provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, or any rule or regulation under any of said Acts; and (2) stipulates and agrees that any such civil suit or action may be commenced by the service of process upon the Commission and the forwarding of a copy thereof as provided in paragraph (c) of this section,

and that the service as aforesaid of any such process, pleadings, or other papers upon the Commission shall be taken and held in all courts to be as valid and binding as if due personal service thereof had been made.

(b) The required consent and power of attorney shall be furnished to the Commission within the following period of time:

(1) Each nonresident broker or dealer registered at the time this section becomes effective, and each nonresident general partner or managing agent of an unincorporated broker or dealer registered at the time this section becomes effective, shall furnish such consent and power of attorney within 60 days after such date;

(2) Each broker or dealer applying for registration after the effective date of this section shall furnish, at the time of filing such application, all the consents and powers of attorney required to be furnished by such broker or dealer and by each general partner or managing agent thereof: Provided, however, That where an application for registration of a broker or dealer is pending at the time this section becomes effective such consents and powers of attorney shall be furnished within 30 days after this section becomes effective.

(3) Each broker or dealer registered or applying for registration who or which becomes a nonresident broker or dealer after the effective date of this section, and each general partner or managing agent, of an unincorporated broker or dealer registered or applying for registration, who becomes a nonresident after the effective date of this section, shall furnish such consent and power of attorney within 30 days thereafter.

(c) Service of any process, pleadings or other papers on the Commission under this part shall be made by delivering the requisite number of copies thereof to the Secretary of the Commission or to such other person as the Commission may authorize to act in its behalf. Whenever any process, pleadings or other papers as aforesaid are served upon the Commission, it shall promptly forward a copy thereof by registered or certified mail to the appropriate defendants at their last address of record filed with the Commission. The Commission shall be furnished a sufficient number of copies for such purpose, and one copy for its file.

(d) For purposes of this section the following definitions shall apply:

(1) The term "broker" shall have the meaning set out in section 3 (a) (4) of the Securities Exchange Act of 1934.

(2) The term "dealer" shall have the meaning set out in section 3 (a) (5) of the Securities Exchange Act of 1934.

(3) The term "managing agent" shall mean any person, including a trustee, who directs or manages or who participates in the directing or managing of the affairs of any unincorporated organization or association which is not a partnership.

(4) The term "nonresident broker or dealer" shall mean (i) in the case of an individual, one who resides in or has his principal place of business in any place not subject to the jurisdiction of the United States; (ii) in the case of a corporation, one incorporated in or having its principal place of business in any place not subject to the jurisdiction of the United States; (iii) in the case of a partnership or other unincorporated organization or association, one having its principal place of business in any place not subject to the jurisdiction of the United States.

(5) A general partner or managing agent of a broker or dealer shall be deemed to be a nonresident if he resides in any place not subject to the jurisdiction of the United States.

(Sec. 23, 48 Stat. 901, as amended, sec 319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841, 855; 15 U.S.C. 78w, 77sss, 80a-37, 80b-11) [18 F.R. 2577, May 2, 1953, as amended at 23 F.R. 9691, Dec. 16, 1958; 29 F.R. 16982, Dec. 11, 1964]

§ 230.173 Consent to service of process

to be furnished by non-resident investment advisers and by non-resident investment general partners or managing agents of investment advisers. (a) Each non-resident investment adviser registered or applying for registration pursuant to section 203 of the Investment Advisers Act of 1940, each non-resident general partner of an investment adviser partnership which is registered or applying for registration, and each non-resident managing agent of any other unincorporated investment adviser which is registered or applying for registration, shall furnish to the Commission, in a form prescribed by or acceptable to it, a written irrevocable consent and power of attorney which (1) designates the Securities and Exchange Commission as an agent upon whom may

be served any process, pleadings, or other papers in any civil suit or action brought in any appropriate court in any place subject to the jurisdiction of the United States, where the cause of action (i) accures on or after the effective date of this section, (ii) arises out of any activity, in any place subject to the jurisdiction of the United States, occurring in connection with the conduct of business of an investment adviser, and (iii) is founded, directly or indirectly, upon the provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, or any rule or regulation under any of said acts; and (2) stipulates and agrees that any such civil suit or action may be commenced by the service of process upon the Commission and the forwarding of a copy thereof as provided in paragraph (c) of this section, and that the service as aforesaid of any such process, pleadings, or other papers upon the Commission shall be taken and held in all courts to be as valid and binding as if due personal service thereof had been made.

(b) The required consent and power of attorney shall be furnished to the Commission within the following period of time:

(1) Each non-resident investment adviser registered at the time this section becomes effective, and each nonresident general partner or managing agent of an unincorporated investment adviser registered at the time this section becomes effective, shall furnish such consent and power of attorney within 60 days after such date;

(2) Each investment adviser applying for registration after the effective date of this section shall furnish, at the time of filing such application, all the consents and powers of attorney required to be furnished by such investment adviser and by each general partner or managing agent thereof: Provided, however, That where an application for registration of an investment adviser is pending at the time this rule becomes effective such consents and powers of attorney shall be furnished within 30 days after this section becomes effective.

(3) Each investment adviser registered or applying for registration who or which becomes a non-resident investment adviser after the effective date of this section, and each general partner or managing agent, of an unincorporated

investment adviser registered or applying for registration, who becomes a nonresident after the effective date of this section shall furnish such consent and power of attorney within 30 days thereafter.

(c) Service of any process, pleadings or other papers on the Commission under this part shall be made by delivering the requisite number of copies thereof to the Secretary of the Commission or to such other person as the Commission may authorize to act in its behalf. Whenever any process, pleadings or other papers as aforesaid are served upon the Commission, it shall promptly forward a copy thereof by registered or certified mail to the appropriate defendants at their last address of record filed with the Commission. The Commission shall be furnished a sufficient number of copies for such purpose, and one copy for its file.

(d) For purposes of this section the following definitions shall apply:

(1) The term "investment adviser" shall have the meaning set out in section 202(a) (11) of the Investment Advisers Act of 1940.

(2) The term "managing agent" shall mean any person, including a trustee, who directs or manages or who participates in the directing or managing of the affairs of any unincorporated organization or association which is not a partnership.

(3) The term "non-resident investment adviser" shall mean (i) in the case of an individual, one who resides in or has his principal place of business in any place not subject to the jurisdiction of the United States; (ii) in the case of a corporation, one incorporated in or having its principal place of business in any place not subject to the jurisdiction of the United States; (iii) in the case of a partnership or other unincorporated organization or association, one having its principal place of business in any place not subject to the jurisdiction of the United States.

(4) A general partner or managing agent of an investment adviser shall be deemed to be a nonresident if he resides in any place not subject to the jurisdiction of the United States.

(Sec. 23, 48 Stat. 901, as amended, sec. 319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841, 855; 15 U.S.C. 78w, 77sss, 80a-37, 80b-11) [19 F.R. 4300, July 14, 1954; 20 F.R. 2510, Apr. 16, 1955, as amended at 29 F.R. 16982, Dec. 11 1964]

§ 230.174 Delivery of prospectus by dealers; exemptions under section 4(3) of the Act.

The obligations of a dealer (including an underwriter no longer acting as an underwriter in respect of the security involved in such transactions) to deliver a prospectus in transactions in a security as to which a registration statement has been filed taking place prior to the expiration of the 40 or 90 day period specified in section 4 (3) of the Act after the effective date of such registration statement or prior to the expiration of such period 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, shall be subject to the following provisions:

(a) No prospectus need be delivered if the registration statement is on Forms S-8 (17 CFR 239.16b), S-9 (17 CFR 239.22), S-12 (17 CFR 239.19), or F-1 (17 CFR 239.9): Provided, In the case of a registration statement on Forms S-12 (17 CFR 239.19) or F-1 (17 CFR 239.9), this provision shall not apply if registration of the deposited securities is also required.

(b) If the issuer has a class of security listed and registered on a national securities exchange pursuant to section 12(b) of the Securities Exchange Act of 1934, the period during which a prospectus must be delivered shall be 40 days.

(c) Where a registration statement relates to offerings to be made from time to time no prospectus need be delivered after the expiration of the initial prospectus delivery period specified in section 4(3) of the Act or in paragraphs (a) or (b) of this section following the first bona fide offering of securities under such registration statement.

(d) Notwithstanding the foregoing, the period during which a prospectus must be delivered by a dealer shall be:

(1) As specified in section 4 (3) of the Act if the registration statement was the subject of a stop order issued under section 8 of the Act; or

(2) As the Commission may provide upon application or on its own motion in a particular case.

(e) Nothing in this section shall affect the obligation to deliver a prospectus pursuant to the provisions of section 5 of the Act by a dealer who is acting as an underwriter with respect to the securities

involved or who is engaged in a transaction 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.

(Sec. 12, 78 Stat. 580; 15 U.S.C. 77d) [29 F.R. 19100, Dec. 30, 1964]

REGULATION A-R: SPECIAL EXEMPTIONS

AUTHORITY: §§ 230.284 to 230.236 issued under secs. 3, 19, 48 Stat. 75, 85, as amended; 15 U.S.C. 77c, 77s, unless otherwise noted. § 230.234 Exemption of first lien notes. (a) Promissory notes directly secured by a first lien on a single parcel of real estate upon which is located a dwelling or other residential or commercial property shall be exempt from registration under the Act if such notes are offered in accordance with the following terms and conditions:

(D) Neither the aggregate unpaid principal amount of the notes secured by the lien on the property nor the aggregate amount at which such notes are offered to the public shall exceed $100.000:

(2) The aggregate unpaid principal amount of all indebtedness secured by the first lien on the property shall not exceed 75 percent of the appraised value of such property:

(3) The principal amount of each note to be offered under this regulation shall not be less than $500, and the total number of notes secured by the first lien on the property shall not exceed 125; and The notes shall be sold for cash or purchasers' obligations to pay cash within 60 days after sale.

(b) Interests or participations in, or promissory notes secured by a lien upon. another note or notes which are in turn secured by a first ben upon real estate shall not be deemed to be directly vered by a first hen on real estate within the meaning of this section..

No exemption shall be available under this sezon for any investment contract or other secunty the offering of which is involved in the offering of the notes directly scured by a first Sen 2 real estate

38 PR 13. Dec 18 19

$ 230 235 Fxemption of securities of cooperative housing corpora tions.

Sur her events repre MLZE ROæership m ay ayerazle Nay aranan shall be exeMING

from registration under the Act if the terms and conditions of this section are met. The term "cooperative housing corporation" as used herein means a corporation each of whose members is entitled, solely by reason of his membership in such corporation:

(1) To occupy for dwelling purposes a house, or an apartment in a building, owned or leased or to be owned or leased, by such corporation; or

(2) To purchase a dwelling constructed or to be constructed by such corporation.

(b) Such corporation shall not be or intend to be engaged in any business or activity other than the ownership, leasing, management or construction of residential properties for its members, except to the extent that such business or activity is incidential to the ownership, leasing, management or construction of such residential properties.

(c) The securities shall be issued only in connection with the sale or lease of dwelling units to persons who are or thereupon become members of the corporation and shall be transferable by the purchasers only in connection with the transfer of such dwelling units or leases to other persons who are thereupon become such members.

(d) The aggregate offering price of all securities of the corporation offered pursuant to this rule during any twelvemonth period shall not exceed $300,000 including any unsold securities initially offered prior to the beginning of such period.

(e) The aggregate offering price of securities offered pursuant to this section shall be computed upon the basis of the price at which the securities are to be sold to members or, if such price is not separately specified. upon the basis of the par or stated value of the securities to be offered.

Sec. §. 48 Stat. 75. as amended; 15 U.S.C. 77c) 36 FR. 13914. Dec. 16, 1960]

$ 230236 Exemption of shares offered in connection with certain transactions

Shares of stock or similar security offered to provide funds to be distributed to shareholders of the issuer of such securities in Seu of issuing fractional shares, script certificates or order forms, I CORECTION, with a stock dividend, stock spit. reverse stock spit, conversion, Berger or smilar transaction, shall be

exempt from registration under the Act if the following conditions are met:

(a) The issuer of such shares is required to file and has filed reports with the Commission pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934;

(b) The aggregate gross proceeds from the sale of all shares offered in connection with the transaction for the purpose of providing such funds does not exceed $100,000; and

(c) At least ten days prior to the offering of the shares, the issuer shall furnish to the Commission in writing the following information: (1) That it proposes to offer shares in reliance upon the exemption provided by this rule; (2) the estimated number of shares to be so offered; (3) the aggregate market value of such shares as of the latest practicable date; and (4) a brief description of the transaction in connection with which the shares are to be offered. (Secs. 3, 4, and 19, 48 Stat. 75, 77, 85, as amended; 15 U.S.C. 77c, 77d, 77s) [27 F.R. 3289, Apr. 6, 1962]

REGULATION A: GENERAL EXEMPTIONS

AUTHORITY: §§ 230.251 to 230.263 issued under secs. 3, 19, 48 Stat. 85, as amended; 15 U.S.C. 77c, 77s, unless otherwise noted.

SOURCES: §§ 230.251 to 230.263 contained in Regulation A, 21 F.R. 5739, Aug. 1, 1956, unless otherwise noted.

§ 230.251 Definitions of terms used in §§ 230.251 to 230.262.

As used in §§ 230.251 to 230.262, the following terms shall have the meaning indicated:

Affiliate. An "affiliate" of an issuer is a person controlling, controlled by or under common control with such issuer. An individual who controls an issuer is also an affiliate of such issuer.

Predecessor. A "predecessor" of an issuer is (a) a person the major portion of whose assets have been acquired directly or indirectly by the issuer, or (b) a person from which the issuer acquired directly or indirectly the major portion of its assets.

Promoter. The term "promoter" includes (a) Any person who, acting alone or in conjunction with one or more other persons, directly or indirectly takes the initiative in founding and organizing the business or enterprise of an issuer;

(b) Any person who, in connection with the founding or organizing of the business or enterprise of an issuer, directly or indirectly receives in consid

eration of services or property, or both services and property, 10 percent or more of any class of securities of the issuer or 10 percent or more of the proceeds from the sale of any class of securities. However, a person who receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this paragraph if such person does otherwise take part in founding and organizing the enterprise.

Province. A "Province" is any Province or Territory of Canada.

Resident. A "resident" of a specified country is an individual resident of such country or a corporation or other organization which is incorporated or organized under the laws of such country or any of its political subdivisions.

State. A "State" is any State, Territory or insular possession of the United States, or the District of Columbia.

Underwriter. The term "underwriter" shall have the meaning given in section 2 (11) of the act.

§ 230.252 Securities exempted.

(a) Except as hereinafter provided in §§ 230.251 to 230.262, securities issued by any of the following persons shall be exempt from registration under the act if offered in accordance with the terms and conditions of §§ 230.251 to 230.262:

(1) Any corporation, unincorporated association or trust (i) which is incorporated or organized under the laws of the United States or Canada or any State or Province thereof and (ii) which has or proposes to have its principal business operations in the United States or Canada; or

(2) Any individual who is a resident of, and has or proposes to have his principal business operations in, any State or Province; or

(3) In the case of an offering to existing security holders on a pro rata basis pursuant to warrants or rights, any direct or indirect majority-owned subsidiary of any issuer specified in subparagraph (1) of this paragraph which has securities registered on a national securities exchange pursuant to the provisions of the Securities Exchange Act of 1934.

(b) No exemption under this regulation shall be available for any of the following securities:

(1) Fractional undivided interests in oil or gas rights as defined in § 230.300,