---
kind: "section"
citation: "15 U.S.C. § 77r–1"
title: "15"
title_heading: "Commerce and Trade"
number: "77r–1"
heading: "Preemption of State law"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/77r-1"
units:
  - "Chapter 2A — Securities and Trust Indentures"
  - "Subchapter I — Domestic Securities"
---

# §77r–1. Preemption of State law

- (a) **Authority to purchase, hold, and invest in securities; securities considered as obligations of United States—**
  - (1) Any [person](/usc/15/77b.md?p=a-2), [trust](/usc/15/77b.md?p=a-2), corporation, partnership, association, business [trust](/usc/15/77b.md?p=a-2), or business entity created pursuant to or existing under the laws of the United States or any [State](/usc/15/15g.md?p=2) shall be authorized to [purchase](/usc/15/77b.md?p=a-18), hold, and invest in [securities](/usc/15/77b.md?p=a-1) that are—
    - (A) offered and sold pursuant to [section 77d(5)](/usc/15/77d.md)[^1] of this title,
    - (B) mortgage related [securities](/usc/15/77b.md?p=a-1) (as that term is defined in [section 78c(a)(41) of this title](/usc/15/78c.md?p=a-41)),
    - (C) small business related [securities](/usc/15/77b.md?p=a-1) (as defined in [section 78c(a)(53) of this title](/usc/15/78c.md?p=a-53)), or
    - (D) [securities](/usc/15/77b.md?p=a-1) issued or guaranteed by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association,

    to the same extent that such [person](/usc/15/77b.md?p=a-2), [trust](/usc/15/77b.md?p=a-2), corporation, partnership, association, business [trust](/usc/15/77b.md?p=a-2), or business entity is authorized under any applicable law to [purchase](/usc/15/77b.md?p=a-18), hold or invest in obligations issued by or guaranteed as to principal and interest by the United States or any agency or instrumentality thereof.

  - (2) Where [State](/usc/15/15g.md?p=2) law limits the [purchase](/usc/15/77b.md?p=a-18), holding, or investment in obligations issued by the United States by such a [person](/usc/15/77b.md?p=a-2), [trust](/usc/15/77b.md?p=a-2), corporation, partnership, association, business [trust](/usc/15/77b.md?p=a-2), or business entity, such [securities](/usc/15/77b.md?p=a-1) that are—
    - (A) offered and sold pursuant to [section 77d(5)](/usc/15/77d.md)[^1] of this title,
    - (B) mortgage related [securities](/usc/15/77b.md?p=a-1) (as that term is defined in [section 78c(a)(41) of this title](/usc/15/78c.md?p=a-41)),
    - (C) small business related [securities](/usc/15/77b.md?p=a-1) (as defined in [section 78c(a)(53) of this title](/usc/15/78c.md?p=a-53)), or
    - (D) [securities](/usc/15/77b.md?p=a-1) issued or guaranteed by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association,

    shall be considered to be obligations issued by the United States for purposes of the limitation.

- (b) **Exception; validity of contracts under prior law—** The provisions of [subsection (a)](#a) shall not apply with respect to a particular [person](/usc/15/77b.md?p=a-2), [trust](/usc/15/77b.md?p=a-2), corporation, partnership, association, business [trust](/usc/15/77b.md?p=a-2), or business entity or class thereof in any [State](/usc/15/15g.md?p=2) that, prior to the expiration of seven years after October 3, 1984, enacts a statute that specifically refers to this section and either prohibits or provides for a more limited authority to [purchase](/usc/15/77b.md?p=a-18), hold, or invest in such [securities](/usc/15/77b.md?p=a-1) by any [person](/usc/15/77b.md?p=a-2), [trust](/usc/15/77b.md?p=a-2), corporation, partnership, association, business [trust](/usc/15/77b.md?p=a-2), or business entity or class thereof than is provided in [subsection (a)](#a). The enactment by any [State](/usc/15/15g.md?p=2) of any statute of the type described in the preceding sentence shall not affect the validity of any contractual commitment to [purchase](/usc/15/77b.md?p=a-18), hold, or invest that was made prior thereto and shall not require the sale or other disposition of any [securities](/usc/15/77b.md?p=a-1) acquired prior thereto.
- (c) **Registration and qualification requirements; exemption; subsequent enactment by State—** Any [securities](/usc/15/77b.md?p=a-1) that are offered and sold pursuant to [section 77d(5)](/usc/15/77d.md)[^1] of this title, that are mortgage related [securities](/usc/15/77b.md?p=a-1) (as that term is defined in [section 78c(a)(41) of this title](/usc/15/78c.md?p=a-41)), or that are small business related [securities](/usc/15/77b.md?p=a-1) (as defined in [section 78c(a)(53) of this title](/usc/15/78c.md?p=a-53)) shall be exempt from any law of any [State](/usc/15/15g.md?p=2) with respect to or requiring registration or qualification of [securities](/usc/15/77b.md?p=a-1) or real estate to the same extent as any obligation issued by or guaranteed as to principal and interest by the United States or any agency or instrumentality thereof. Any [State](/usc/15/15g.md?p=2) may, prior to the expiration of seven years after October 3, 1984, enact a statute that specifically refers to this section and requires registration or qualification of any such [security](/usc/15/77b.md?p=a-1) on terms that differ from those applicable to any obligation issued by the United States.
- (d) **Implementation—**
  - (1) **Limitation—** The provisions of subsections [(a)](#a) and [(b)](#b) concerning small business related [securities](/usc/15/77b.md?p=a-1) shall not apply with respect to a particular [person](/usc/15/77b.md?p=a-2), [trust](/usc/15/77b.md?p=a-2), corporation, partnership, association, business [trust](/usc/15/77b.md?p=a-2), or business entity or class thereof in any [State](/usc/15/15g.md?p=2) that, prior to the expiration of 7 years after September 23, 1994, enacts a statute that specifically refers to this section and either prohibits or provides for a more limited authority to [purchase](/usc/15/77b.md?p=a-18), hold, or invest in such small business related [securities](/usc/15/77b.md?p=a-1) by any [person](/usc/15/77b.md?p=a-2), [trust](/usc/15/77b.md?p=a-2), corporation, partnership, association, business [trust](/usc/15/77b.md?p=a-2), or business entity or class thereof than is provided in this section. The enactment by any [State](/usc/15/15g.md?p=2) of any statute of the type described in the preceding sentence shall not affect the validity of any contractual commitment to [purchase](/usc/15/77b.md?p=a-18), hold, or invest that was made prior to such enactment, and shall not require the sale or other disposition of any small business related [securities](/usc/15/77b.md?p=a-1) acquired prior to the date of such enactment.
  - (2) **State registration or qualification requirements—** Any [State](/usc/15/15g.md?p=2) may, not later than 7 years after September 23, 1994, enact a statute that specifically refers to this section and requires registration or qualification of any small business related [securities](/usc/15/77b.md?p=a-1) on terms that differ from those applicable to any obligation issued by the United States.

## Footnotes

[^1]: See References in Text note below.

## Source credit

(Pub. L. 98–440, title I, § 106, Oct. 3, 1984, 98 Stat. 1691; Pub. L. 103–325, title II, § 207, Sept. 23, 1994, 108 Stat. 2199.)

## Notes

### Editorial Notes

### References in Text

Section 77d(5) of this title, referred to in subsecs. (a)(1)(A), (2)(A) and (c), was redesignated section 77d(a)(5) of this title by Pub. L. 112–106, title II, § 201(b)(1), (c)(1), Apr. 5, 2012, 126 Stat. 314.

### Codification

Section was enacted as part of the Secondary Mortgage Market Enhancement Act of 1984, and not as part of the Securities Act of 1933, which comprises this subchapter.

### Amendments

1994—Subsec. (a)(1)(B) to (D). Pub. L. 103–325, § 207(a), struck out “or” at end of subpar. (B), added subpar. (C), and redesignated former subpar. (C) as (D).

Subsec. (a)(2)(B) to (D). Pub. L. 103–325, § 207(b), struck out “or” at end of subpar. (B), added subpar. (C), and redesignated former subpar. (C) as (D).

Subsec. (c). Pub. L. 103–325, § 207(c), in first sentence substituted “, that” for “or that” before “are mortgage related securities” and inserted “, or that are small business related securities (as defined in section 78c(a)(53) of this title)” before “shall be exempt”.

Subsec. (d). Pub. L. 103–325, § 207(d), added subsec. (d).