12 C.F.R. PART 16—SECURITIES OFFERING DISCLOSURE RULES
Title 12 - Banks and Banking
Authority: 12 U.S.C. 1 et seq. and 93a.
Source: 59 FR 54798, Nov. 2, 1994, unless otherwise noted.
(a) Authority. This part is issued under the general authority of the national banking laws, 12 U.S.C. 1 et seq., and the OCC's general rulemaking authority in 12 U.S.C. 93a. (b) Purpose. This part sets forth rules governing the offer and sale of securities issued by a bank. (c) Scope. This part applies to offers and sales of bank securities by issuers, underwriters, and dealers. For purposes of this part, the following definitions apply: (a) Accredited investor means the same as in Commission Rule 501(a) (17 CFR 230.501(a)). (b) Bank means an existing national bank, a national bank in organization, a bank operating under the Code of Law of the District of Columbia, or a federal branch or agency of a foreign bank. (c) Commission means the Securities and Exchange Commission. When used in the rules, regulations, or forms of the Commission referred to in this part, the term “Commission” shall be deemed to refer to the OCC. (d) Dealer means the same as in section 2(12) of the Securities Act (15 U.S.C. 77b(12)). (e) Exchange Act means the Securities Exchange Act of 1934 (15 U.S.C. 78a through 78jj). (f) Insured depository institution means the same as in section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(2)). (g) Investment grade means that a security is rated investment grade (i.e., in one of the top four rating categories) by each nationally recognized statistical rating organization that has rated the security. (h) Issuer means a bank that issues or proposes to issue any security. (i) Nonconvertible debt means a general obligation of the bank, whether senior or subordinated, that is not convertible into any class of common or preferred stock or any derivative thereof. (j) OCC means the Office of the Comptroller of the Currency. (k) Person means the same as in section 2(2) of the Securities Act (15 U.S.C. 77b(2)) and includes a bank. (l) Prospectus means an offering document that includes the information required by section 10(a) of the Securities Act (15 U.S.C. 77j(a)). (m) Registration statement means a filing that includes the prospectus and other information required by section 7 of the Securities Act (15 U.S.C. 77g). (n) Sale, sell, offer to sell, offer for sale, and offer mean the same as in section 2(3) of the Securities Act (15 U.S.C. 77b(3)). (o) Securities Act means the Securities Act of 1933 (15 U.S.C. 77a through 77aa). (p) Security means the same as in section 2(1) of the Securities Act (15 U.S.C. 77b(1)). (q) Underwriter means the same as in section 2(11) of the Securities Act (15 U.S.C. 77b(11)). Commission Rules 137, 140, 141, 142, and 144 (17 CFR 230.137, 230.140, 230.141, 230.142, and 230.144) (which apply to section 2(11) of the Securities Act) apply to this part. (a) No person shall offer or sell, directly or indirectly, any bank issued security unless: (1) A registration statement for the security meeting the requirements of §16.15 of this part has been filed with and declared effective by the OCC pursuant to this part, and the offer or sale is accompanied or preceded by a prospectus that has been filed with and declared effective by the OCC as a part of that registration statement; or (2) An exemption is available under §16.5 of this part. (b) Notwithstanding paragraph (a) of this section, securities of a bank may be offered through the use of a preliminary prospectus before a registration statement and prospectus for the securities have been declared effective by the OCC if: (1) A registration statement including the preliminary prospectus has been filed with the OCC; (2) The preliminary prospectus contains the information required by §16.15 of this part except for the omission of information with respect to the offering price, underwriting discounts or commissions, discounts or commissions to dealers, amount of proceeds, conversion rates, call prices, or other matters dependent upon the offering price; and (3) A copy of the prospectus as declared effective containing the information specified in paragraph (b)(2) of this section is furnished to each purchaser prior to or simultaneously with the sale of the security. (c) Commission Rule 174 (17 CFR 230.174—Delivery of prospectus by dealers; Exemptions under section 4(3) of the Act) applies to transactions by dealers in bank issued securities. (a) The OCC will not deem the following communications to be an offer under §16.3 of this part: (1) Prior to the filing of a registration statement, any notice of a proposed offering that satisfies the requirements of Commission Rule 135 (17 CFR 230.135); (2) Subsequent to the filing of a registration statement, any notice, circular, advertisement, letter, or other communication published or transmitted to any person that satisfies the requirements of Commission Rule 134 (17 CFR 230.134); (3) Subsequent to the filing of a registration statement, any oral offer of securities covered by that registration statement; (4) Subsequent to the filing of a registration statement, any summary prospectus that is filed as a part of that registration statement and satisfies the requirements of Commission Rule 431 (17 CFR 230.431); (5) Subsequent to the effective date of a registration statement, any written communication if it is proved that each recipient of the communication simultaneously or previously received a written prospectus meeting the requirements of section 10(a) of the Securities Act (15 U.S.C. 77j(a)) and §16.15 of this part that was filed with and declared effective by the OCC; (6) A notice of a proposed unregistered offering that satisfies the requirements of Commission Rule 135c (17 CFR 230.135c); and (7) A communication that satisfies the requirements of Commission Rule 138 or 139 (17 CFR 230.138 or 230.139). (b) The OCC may request that communications not deemed an offer under paragraph (a) of this section be submitted to the OCC. (c) The OCC may prohibit the publication or distribution of any communication not deemed an offer under paragraph (a) of this section if necessary to protect the investing public. The registration statement and prospectus requirements of §16.3 of this part do not apply to an offer or sale of bank securities: (a) If the securities are exempt from registration under section 3 of the Securities Act (15 U.S.C. 77c), but only by reason of an exemption other than section 3(a)(2) (exemption for bank securities) and section 3(a)(11) (exemption for intrastate offerings) of the Securities Act. Commission Rules 149 and 150 (17 CFR 230.149 and 230.150) (which apply to section 3(a)(9) of the Securities Act) apply to this part; (b) In a transaction exempt from registration under section 4 of the Securities Act (15 U.S.C. 77d). Commission Rules 152 and 152a (17 CFR 230.152 and 230.152a) (which apply to sections 4(2) and 4(1) of the Securities Act) apply to this part; (c) In a transaction that satisfies the requirements of §16.7 of this part; (d) In a transaction that satisfies the requirements of §16.8 of this part; (e) In a transaction that satisfies the requirements of Commission Rule 144, 144A, 148, or 236 (17 CFR 230.144, 230.144A, 230.148, or 230.236); (f) In a transaction that satisfies the requirements of Commission Rule 701 (17 CFR 230.701); or (g) In a transaction that is an offer or sale occurring outside the United States under Commission Regulation S (17 CFR part 230, Regulation S—Rules Governing Offers and Sales Made Outside the United States Without Registration Under the Securities Act of 1933). [59 FR 54798, Nov. 2, 1994; 59 FR 67153, Dec. 29, 1994] (a) The OCC will deem offers or sales of bank issued nonconvertible debt to be in compliance with §§16.3, 16.15 (a) and (b), and 16.20 of this part if all of the following requirements are met: (1) The bank issuing the debt has securities registered under the Exchange Act or is a subsidiary of a bank holding company that has securities registered under the Exchange Act; (2) The debt is offered and sold only to accredited investors; (3) The debt is sold in minimum denominations of $250,000 and each note or debenture is legended to provide that it cannot be exchanged for notes or debentures of the bank in smaller denominations; (4) The debt is rated investment grade; (5) Prior to or simultaneously with the sale of the debt, each purchaser receives an offering document that contains a description of the terms of the debt, the use of proceeds, and method of distribution, and incorporates the bank's latest Consolidated Reports of Condition and Income (Call Report) and the bank's or its bank holding company's Forms 10–K, 10–Q (or 10–KSB, 10–QSB), and 8–K (17 CFR part 249) filed under the Exchange Act; and (6) The offering document and any amendments are filed with the OCC no later than the fifth business day after they are first used. (b) Offers or sales of nonconvertible debt issued by a federal branch or agency of a foreign bank need not need comply with the requirements of paragraph (a)(1) of this section, if the federal branch or agency provides the OCC the information specified in Commission Rule 12g3–2(b) (17 CFR 240.12g3–2(b)) and provides purchasers the information specified in Commission Rule 144A(d)(4)(i) (17 CFR 230.144A(d)(4)(i)). A federal branch or agency that provides the OCC the information specified in Commission Rule 12g3–2(b) need not incorporate that information by reference into the offering document provided to purchasers pursuant to paragraph (a)(5) of this section. However, the federal branch or agency must make that information available to the potential purchasers upon request. The OCC will make the information available for public inspection. (a) The OCC will deem offers and sales of bank issued securities that meet all of the following requirements to be exempt from the registration and prospectus requirements of §16.3 pursuant to §16.5(c) of this part: (1) All the securities are offered and sold in a transaction that satisfies the requirements of Commission Regulation D (17 CFR part 230, Regulation D—Rules Governing the Limited Offer and Sale of Securities Without Registration Under the Securities Act of 1933); (2) Each purchaser who is not an accredited investor either alone or with its purchaser representative(s) has the knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the prospective investment, or the issuer reasonably believes immediately prior to making any sale that the purchaser comes within this description; and (3) A notice that meets the requirements of Commission Rule 503 (17 CFR 230.503) is filed with the OCC. (b) All subsequent sales of bank issued securities subject to the limitations on resale of Commission Regulation D (17 CFR part 230, Regulation D—Rules Governing the Limited Offer and Sale of Securities Without Registration Under the Securities Act of 1933) must be made pursuant to Commission Rule 144 (17 CFR 230.144), Commission Rule 144A (17 CFR 230.144A), another exemption from registration under the Securities Act referenced in §16.5 of this part, or in accordance with the registration and prospectus requirements of §16.3 of this part. (c) No offer or sale of bank issued securities shall be made in reliance on Commission Regulation D (17 CFR part 230, Regulation D—Rules Governing the Limited Offer and Sale of Securities Without Registration Under the Securities Act of 1933) without compliance with paragraphs (a)(1) and (a)(2) of this section. (a) The OCC will deem offers and sales of bank issued securities that satisfy the requirements of Commission Regulation A (17 CFR part 230, Regulation A—Conditional Small Issues Exemption) to be exempt from the registration and prospectus requirements of §16.3 pursuant to §16.5(d) of this part. (b) A filer should consult the Commission's Securities Act Industry Guide 3—Statistical Disclosure by Bank Holding Companies (17 CFR 229.801(c) and 231) and requirement 7 (Loans) of Rule 9–03 of Commission Regulation S-X (17 CFR 230.9–03) for guidance on appropriate disclosures when preparing offering documents to be filed with the OCC pursuant to Regulation A. (a) Any registration statement filed pursuant to this part must be on the form for registration (17 CFR part 239) that the bank would be eligible to use were it required to register the securities under the Securities Act and must meet the requirements of the Commission regulations referred to in the applicable form for registration. A filer should consult the Commission's Securities Act Industry Guide 3—Statistical Disclosure by Bank Holding Companies (17 CFR 229.801(c) and 231) for guidance on appropriate disclosures when preparing registration statements. (b) Any registration statement or amendment filed pursuant to this part must comply with the requirements of Commission Regulation C (17 CFR part 230, Regulation C—Registration), except to the extent those requirements conflict with specific requirements of this part. (c) In addition to the information expressly required to be included in the registration statement by paragraphs (a) and (b) of this section, the registration statement must include any additional material information that is necessary to make the required statements, in light of the circumstances under which they are made, not misleading. (d) Notwithstanding paragraph (a) of this section, the registration statement for securities issued by a bank that is not in compliance with the regulatory capital requirements set forth in part 3 of this chapter must be on the Form S–1 (17 CFR part 239) registration statement under the Securities Act. (a) Registration statements and amendments filed with the OCC pursuant to this part will become effective in accordance with sections 8(a) and (c) of the Securities Act (15 U.S.C. 77h(a) and (c)) and Commission Regulation C (17 CFR part 230, Regulation C—Registration). (b) The OCC will deem registration statements and amendments that become effective pursuant to paragraph (a) of this section to be declared effective. If the OCC deems a registration statement to be declared effective, the OCC will also deem the prospectus that was filed as a part of that registration statement to be declared effective. (a) Except as provided in paragraph (b) of this section, all registration statements, offering documents, amendments, notices, or other documents must be filed with the Securities, Investments, and Fiduciary Practices Division, Office of the Comptroller of the Currency, 250 E Street, SW, Washington, DC 20219. (b) All registration statements, offering documents, amendments, notices, or other documents relating to a bank in organization must be filed with the appropriate District office of the OCC. (c) Where this part refers to a section of the Securities Act or the Exchange Act or a Commission rule that requires the filing of a notice or other document with the Commission, that notice or other document must be filed with the OCC. (d) Unless otherwise requested by the OCC, any filing under this part must include four copies of any document filed. Material may be filed by delivery to the OCC through use of the mails or otherwise. The date on which documents are actually received by the OCC will be the date of filing of those documents, if the person filing the documents has complied with all requirements regarding the filing, including the submission of any fee required under §16.33 of this part. (e) Any filing of amendments or revisions must include at least four copies, two of which are marked to indicate clearly and precisely, by underlining or in some other appropriate manner, the changes made. (f) The OCC will make available for public inspection copies of the registration statements, offering documents, amendments, exhibits, notices or reports filed pursuant to this part at the address identified in §4.17(b) of this chapter. (a) No person shall use a prospectus or amendment declared effective by the OCC more than nine months after the effective date unless the information contained in the prospectus or amendment is as of a date not more than 16 months prior to the date of use. (b) If any event arises, or change in fact occurs, after the effective date and that event or change in fact, individually or in the aggregate, results in the prospectus containing any untrue statement of material fact, or omitting to state a material fact necessary in order to make statements made in the prospectus not misleading under the circumstances, then no person shall use the prospectus that has been declared effective under this part until an amendment reflecting the event or change has been filed with and declared effective by the OCC. (a) Any registration statement, amendment, or exhibit may be withdrawn prior to the effective date. A withdrawal must be signed and state the grounds upon which it is made. The OCC will not remove any withdrawn document from its files, but will mark the document Withdrawn upon the request of the registrant on (date). (b) When a registration statement or amendment has been on file with the OCC for a period of nine months and has not become effective, the OCC may, in its discretion, determine whether the filing has been abandoned. Before determining that a filing has been abandoned, the OCC will notify the filer that the filing is out of date and must either be amended to comply with the applicable requirements of this part or be withdrawn within 30 days after the date of notice. When a filing is abandoned, the OCC will not remove the filing from its files but will mark the filing Declared abandoned by the OCC on (date). (a) Each bank that files a registration statement that has been declared effective pursuant to this part shall comply with the rules, regulations, and forms adopted by the Commission pursuant to section 13 of the Exchange Act and those provisions of the Sarbanes-Oxley Act of 2002 that are listed in 12 CFR 11.2(a)(1)(ii) of this chapter as if the securities covered by the registration statement were securities registered pursuant to section 12 of the Exchange Act (15 U.S.C. 78l). (b) Suspension of the duty to file current and periodic reports under this section will be in accordance with section 15(d) of the Exchange Act (15 U.S.C. 78o(d)). (c) Paragraph (a) of this section does not apply if the bank is a subsidiary of a one-bank holding company, the financial statements of the bank and the parent bank holding company are substantially the same, and the bank's parent bank holding company files current and periodic reports pursuant to section 13 of the Exchange Act (15 U.S.C. 78m). (d) Paragraph (a) of this section does not apply if the bank files the registration statement in connection with a merger, consolidation, or acquisition of assets subject to 12 CFR 5.33(e)(8). [68 FR 68492, Dec. 9, 2003] Any person requesting interpretive advice or a no-objection letter from the OCC with respect to any provision of this part shall: (a) File a copy of the request, including any supporting attachments with the Securities, Investments, and Fiduciary Practices Division at the address listed in §16.17; (b) Identify or describe the provisions of this part to which the request relates, the participants in the proposed transaction, and the reasons for the request; and (c) Include with the request a legal opinion as to each legal issue raised and an accounting opinion as to each accounting issue raised. The OCC may require that any funds received in connection with an offer or sale of securities be held in an independent escrow account at an unrelated insured depository institution when the use of an escrow account is in the best interests of shareholders. (a) No person in the offer or sale of bank securities shall directly or indirectly: (1) Employ any device, scheme or artifice to defraud; (2) Make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (3) Engage in any act, practice, or course of business which operates as a fraud or deceit upon any person, in connection with the purchase or sale of any security of a bank. (b) Nothing in this section limits the applicability of section 17 of the Securities Act (15 U.S.C. 77q) or section 10(b) of the Exchange Act (15 U.S.C. 78j) or Rule 10b–5 promulgated thereunder (17 CFR 240.10b–5). (c) Any violation of this section also constitutes an unsafe or unsound practice under 12 U.S.C. 1818. (d) Commission Rule 175 (17 CFR 230.175—Liability for certain statements by issuers) applies to this part. (a) Filing fees must accompany certain filings made under the provisions of this part before the OCC will accept those filings. The applicable fee schedule is provided in the Notice of Comptroller of the Currency Fees published pursuant to §8.8 of this chapter. (b) Filing fees must be paid by check payable to the Comptroller of the Currency.
Title 12: Banks and Banking
PART 16—SECURITIES OFFERING DISCLOSURE RULES
Section Contents
§ 16.1 Authority, purpose, and scope.
§ 16.2 Definitions.
§ 16.3 Registration statement and prospectus requirements.
§ 16.4 Communications not deemed an offer.
§ 16.5 Exemptions.
§ 16.6 Sales of nonconvertible debt.
§ 16.7 Nonpublic offerings.
§ 16.8 Small issues.
§ 16.15 Form and content.
§ 16.16 Effectiveness.
§ 16.17 Filing requirements and inspection of documents.
§ 16.18 Use of prospectus.
§ 16.19 Withdrawal or abandonment.
§ 16.20 Compliance with requirements of the securities laws.
§ 16.30 Request for interpretive advice or no-objection letter.
§ 16.31 Escrow requirement.
§ 16.32 Fraudulent transactions and unsafe and unsound practices.
§ 16.33 Filing fees.
§ 16.1 Authority, purpose, and scope.
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§ 16.2 Definitions.
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§ 16.3 Registration statement and prospectus requirements.
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§ 16.4 Communications not deemed an offer.
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§ 16.5 Exemptions.
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§ 16.6 Sales of nonconvertible debt.
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§ 16.7 Nonpublic offerings.
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§ 16.8 Small issues.
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§ 16.15 Form and content.
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§ 16.16 Effectiveness.
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§ 16.17 Filing requirements and inspection of documents.
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§ 16.18 Use of prospectus.
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§ 16.19 Withdrawal or abandonment.
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§ 16.20 Compliance with requirements of the securities laws.
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§ 16.30 Request for interpretive advice or no-objection letter.
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§ 16.31 Escrow requirement.
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§ 16.32 Fraudulent transactions and unsafe and unsound practices.
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§ 16.33 Filing fees.
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