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Disclosure Requirements of the Federal Securities Laws

George W. Bermant, Mineral Financing (1982)

Section 5 of the Securities Act of 19331 makes it unlawful to offer or sell any security by means of interstate commerce or the mails unless a registration statement with respect to such security is in effect and unless a prospectus meeting the requirements of Section 10 of the Securities Act accompanies or precedes the delivery of the security. Section 10 of the Securities Act provides that a prospectus shall contain the information (subject to certain exceptions) set forth in Schedule A to the Securities Act.2 The Commission may by rules or regulations designate any of the information set forth in Schedule A as “not being necessary or appropriate in the public interest or for the protection of investors.” The absolute strictures of the applicability of Section 5 are ameliorated by certain exemptions from the registration and prospectus delivery requirements provided in Section 3 of the Securities Act (as to so-called exempt securities) and Section 4 of the Securities Act (as to so-called exempt transactions). Barring such exemptions, the sale of all securities is subject to the registration and prospectus delivery requirements of Section 5.

Once it has been determined that Section 5 of the Securities Act is applicable, then the content of the registration statement and prospectus is substantially controlled by the registration forms promulgated by the SEC, Regulation