Exemptions Under the Proposed Federal Securities Code

The policy of full, accurate, and continuous disclosure to investors embodied in the Securities Act of 1933 (1933 Act)' and in the Securities Exchange Act of 1934 (1934 Act) continues unfettered* Lecturer in under the proposed Federal Securities Code (the Code), but the provisions effecting that policy are consolidated and simplified. Under the Code, a company must register itself (not its securities) with the Commission after the first year-end at which it has at least one million dollars in total assets and three hundred holders of its aggregate, nonexempted securities or when the Code first requires it to file an offering statement. .. While seeking to further investor protection by requiring disclosure through its filing and registration provisions, the Code also attempts to avoid unnecessary regulation of and interference with holiest business or with the process of private capital formation. When such interference is unnecessary or serves only minimal public interest, the Code, through exceptions and exemptions, permits companies to avoid filing and registration requirements.

This article focuses upon these Code exceptions and exemptions which do not eliminate the necessity for compliance with the Code's antifraud provisions and with any applicable state blue sky laws, subjects beyond the scope of this article.