---
kind: "section"
citation: "15 U.S.C. § 80a–22"
title: "15"
title_heading: "Commerce and Trade"
number: "80a–22"
heading: "Distribution, redemption, and repurchase of securities; regulations by securities associations"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/80a-22"
units:
  - "Chapter 2D — Investment Companies and Advisers"
  - "Subchapter I — Investment Companies"
---

# §80a–22. Distribution, redemption, and repurchase of securities; regulations by securities associations

- (a) **Rules relating to minimum and maximum prices for purchase and sale of securities from investment company; time for resale and redemption—** A [securities](/usc/15/80a–2.md?p=a-36) association registered under [section 78o–3](/usc/15/78o–3.md) of this title may prescribe, by rules adopted and in effect in accordance with said section and subject to all provisions of said section applicable to the rules of such an association—
  - (1) a method or methods for computing the minimum price at which a member thereof may purchase from any investment [company](/usc/15/80a–2.md?p=a-8) any [redeemable security](/usc/15/80a–2.md?p=a-32) issued by such [company](/usc/15/80a–2.md?p=a-8) and the maximum price at which a member may sell to such [company](/usc/15/80a–2.md?p=a-8) any [redeemable security](/usc/15/80a–2.md?p=a-32) issued by it or which he may receive for such [security](/usc/15/80a–2.md?p=a-36) upon redemption, so that the price in each case will bear such relation to the current net asset value of such [security](/usc/15/80a–2.md?p=a-36) computed as of such time as the rules may prescribe; and
  - (2) a minimum period of time which must elapse after the sale or issue of such [security](/usc/15/80a–2.md?p=a-36) before any resale to such [company](/usc/15/80a–2.md?p=a-8) by a member or its redemption upon surrender by a member;

  in each case for the purpose of eliminating or reducing so far as reasonably practicable any dilution of the value of other outstanding [securities](/usc/15/80a–2.md?p=a-36) of such [company](/usc/15/80a–2.md?p=a-8) or any other result of such purchase, redemption, or sale which is unfair to holders of such other outstanding [securities](/usc/15/80a–2.md?p=a-36); and said rules may prohibit the members of the association from purchasing, selling, or surrendering for redemption any such [redeemable securities](/usc/15/80a–2.md?p=a-32) in contravention of said rules.

- (b) **Rules relating to purchase of securities by members from issuer investment company—**
  - (1) Such a [securities](/usc/15/80a–2.md?p=a-36) association may also, by rules adopted and in effect in accordance with [section 78o–3](/usc/15/78o–3.md) of this title, and notwithstanding the provisions of subsection (b)(6) thereof but subject to all other provisions of said section applicable to the rules of such an association, prohibit its members from purchasing, in connection with a primary distribution of [redeemable securities](/usc/15/80a–2.md?p=a-32) of which any registered investment [company](/usc/15/80a–2.md?p=a-8) is the [issuer](/usc/15/80a–2.md?p=a-22), any such [security](/usc/15/80a–2.md?p=a-36) from the [issuer](/usc/15/80a–2.md?p=a-22) or from any principal underwriter except at a price equal to the price at which such [security](/usc/15/80a–2.md?p=a-36) is then offered to the public less a [commission](/usc/15/80a–2.md?p=a-7), discount, or spread which is computed in conformity with a method or methods, and within such limitations as to the relation thereof to said public offering price, as such rules may prescribe in order that the price at which such [security](/usc/15/80a–2.md?p=a-36) is offered or sold to the public shall not include an excessive [sales load](/usc/15/80a–2.md?p=a-35) but shall allow for reasonable compensation for sales personnel, [broker](/usc/15/80a–2.md?p=a-6)-[dealers](/usc/15/80a–2.md?p=a-11), and underwriters, and for reasonable [sales loads](/usc/15/80a–2.md?p=a-35) to investors. The [Commission](/usc/15/80a–2.md?p=a-7) shall on application or otherwise, if it appears that smaller [companies](/usc/15/80a–2.md?p=a-8) are subject to relatively higher operating costs, make due allowance therefor by granting any such [company](/usc/15/80a–2.md?p=a-8) or class of [companies](/usc/15/80a–2.md?p=a-8) appropriate qualified exemptions from the provisions of this section.
  - (2) At any time after the expiration of eighteen months from December 14, 1970 (or, if earlier, after a [securities](/usc/15/80a–2.md?p=a-36) association has adopted for purposes of [paragraph (1)](#b-1) any rule respecting excessive [sales loads](/usc/15/80a–2.md?p=a-35)), the [Commission](/usc/15/80a–2.md?p=a-7) may alter or supplement the rules of any [securities](/usc/15/80a–2.md?p=a-36) association as may be necessary to effectuate the purposes of this subsection in the manner provided by [section 78s(c) of this title](/usc/15/78s.md?p=c).
  - (3) If any provision of this subsection is in conflict with any provision of any law of the United States in effect on December 14, 1970, the provisions of this subsection shall prevail.
- (c) **Conflicting rules of Commission and associations—** The [Commission](/usc/15/80a–2.md?p=a-7) may make rules and regulations applicable to registered investment [companies](/usc/15/80a–2.md?p=a-8) and to principal underwriters of, and [dealers](/usc/15/80a–2.md?p=a-11) in, the [redeemable securities](/usc/15/80a–2.md?p=a-32) of any registered investment [company](/usc/15/80a–2.md?p=a-8), whether or not members of any [securities](/usc/15/80a–2.md?p=a-36) association, to the same extent, covering the same subject matter, and for the accomplishment of the same ends as are prescribed in [subsection (a)](#a) of this section in respect of the rules which may be made by a registered [securities](/usc/15/80a–2.md?p=a-36) association governing its members. Any rules and regulations so made by the [Commission](/usc/15/80a–2.md?p=a-7), to the extent that they may be inconsistent with the rules of any such association, shall so long as they remain in force supersede the rules of the association and be binding upon its members as well as all other underwriters and [dealers](/usc/15/80a–2.md?p=a-11) to whom they may be applicable.
- (d) **Sale of securities except to or through principal underwriter; price of securities—** No registered investment [company](/usc/15/80a–2.md?p=a-8) shall sell any [redeemable security](/usc/15/80a–2.md?p=a-32) issued by it to any [person](/usc/15/80a–2.md?p=a-28) except either to or through a principal underwriter for distribution or at a current public offering price described in the prospectus, and, if such class of [security](/usc/15/80a–2.md?p=a-36) is being currently offered to the public by or through an underwriter, no principal underwriter of such [security](/usc/15/80a–2.md?p=a-36) and no [dealer](/usc/15/80a–2.md?p=a-11) shall sell any such [security](/usc/15/80a–2.md?p=a-36) to any [person](/usc/15/80a–2.md?p=a-28) except a [dealer](/usc/15/80a–2.md?p=a-11), a principal underwriter, or the [issuer](/usc/15/80a–2.md?p=a-22), except at a current public offering price described in the prospectus. Nothing in this subsection shall prevent a sale made (i) pursuant to an offer of [exchange](/usc/15/80a–2.md?p=a-14) permitted by [section 80a–11 of this title](/usc/15/80a–11.md) including any offer made pursuant to [section 80a–11(b) of this title](/usc/15/80a–11.md?p=b); (ii) pursuant to an offer made solely to all registered holders of the [securities](/usc/15/80a–2.md?p=a-36), or of a particular class or series of [securities](/usc/15/80a–2.md?p=a-36) issued by the [company](/usc/15/80a–2.md?p=a-8) proportionate to their holdings or proportionate to any cash distribution made to them by the [company](/usc/15/80a–2.md?p=a-8) (subject to appropriate qualifications designed solely to avoid issuance of fractional [securities](/usc/15/80a–2.md?p=a-36)); or (iii) in accordance with rules and regulations of the [Commission](/usc/15/80a–2.md?p=a-7) made pursuant to subsection (b) of [section 80a–12 of this title](/usc/15/80a–12.md).
- (e) **Suspension of right of redemption or postponement of date of payment—** No registered investment [company](/usc/15/80a–2.md?p=a-8) shall suspend the right of redemption, or postpone the date of payment or satisfaction upon redemption of any [redeemable security](/usc/15/80a–2.md?p=a-32) in accordance with its terms for more than seven days after the tender of such [security](/usc/15/80a–2.md?p=a-36) to the [company](/usc/15/80a–2.md?p=a-8) or its agent designated for that purpose for redemption, except—
  - (1) for any period (A) during which the New York Stock [Exchange](/usc/15/80a–2.md?p=a-14) is closed other than customary week-end and holiday closings or (B) during which trading on the New York Stock [Exchange](/usc/15/80a–2.md?p=a-14) is restricted;
  - (2) for any period during which an emergency exists as a result of which (A) disposal by the [company](/usc/15/80a–2.md?p=a-8) of [securities](/usc/15/80a–2.md?p=a-36) owned by it is not reasonably practicable or (B) it is not reasonably practicable for such [company](/usc/15/80a–2.md?p=a-8) fairly to determine the value of its net assets; or
  - (3) for such other periods as the [Commission](/usc/15/80a–2.md?p=a-7) may by order permit for the protection of [security](/usc/15/80a–2.md?p=a-36) holders of the [company](/usc/15/80a–2.md?p=a-8).

  The [Commission](/usc/15/80a–2.md?p=a-7) shall by rules and regulations determine the conditions under which (i) trading shall be deemed to be restricted and (ii) an emergency shall be deemed to exist within the meaning of this subsection.

- (f) **Restrictions on transferability or negotiability of securities—** No registered open-end [company](/usc/15/80a–2.md?p=a-8) shall restrict the transferability or negotiability of any [security](/usc/15/80a–2.md?p=a-36) of which it is the [issuer](/usc/15/80a–2.md?p=a-22) except in conformity with the statements with respect thereto contained in its registration statement nor in contravention of such rules and regulations as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe in the interests of the holders of all of the outstanding [securities](/usc/15/80a–2.md?p=a-36) of such investment [company](/usc/15/80a–2.md?p=a-8).
- (g) **Issuance of securities for services or property other than cash—** No registered open-end [company](/usc/15/80a–2.md?p=a-8) shall issue any of its [securities](/usc/15/80a–2.md?p=a-36) (1) for services; or (2) for property other than cash or [securities](/usc/15/80a–2.md?p=a-36) (including [securities](/usc/15/80a–2.md?p=a-36) of which such registered [company](/usc/15/80a–2.md?p=a-8) is the [issuer](/usc/15/80a–2.md?p=a-22)), except as a dividend or distribution to its [security](/usc/15/80a–2.md?p=a-36) holders or in connection with a [reorganization](/usc/15/80a–2.md?p=a-33).

## Source credit

(Aug. 22, 1940, ch. 686, title I, § 22, 54 Stat. 823; Pub. L. 91–547, § 12, Dec. 14, 1970, 84 Stat. 1422; Pub. L. 100–181, title VI, § 616, Dec. 4, 1987, 101 Stat. 1262.)

## Notes

### Editorial Notes

### Amendments

1987—Subsec. (b). Pub. L. 100–181, § 616(1), substituted “subsection (b)(6)” for “subsection (b)(8)” in par. (1).

Pub. L. 100–181, § 616(2), (3), redesignated par. (3) as (2) and substituted “section 78s(c)” for “section 78o–3(k)(2)”, redesignated par. (4) as (3), and struck out former par. (2) which read as follows: “At any time after the expiration of eighteen months from December 14, 1970, or after a securities association has adopted rules as contemplated by this subsection, the Commission may make such rules and regulations pursuant to section 78o(b)(10) of this title as are appropriate to effectuate the purpose of this subsection with respect to sales of shares of a registered investment company by broker-dealers subject to regulation under section 78o(b)(8) of this title: Provided, That the underwriter of such shares may file with the Commission at any time a notice of election to comply with the rules prescribed pursuant to this subsection by a national securities association specified in such notice, and thereafter the sales load shall not exceed that prescribed by such rules of such association, and the rules of the Commission as hereinabove authorized shall thereafter be inapplicable to such sales.”

Subsec. (e). Pub. L. 100–181, § 616(4), (5), in introductory provisions, substituted “redemption, or postpone” for “redemption or postpone” and “redemption, except” for “redemption except”, and, in closing provisions, struck out “Any company which, as of March 15, 1940, was required by provision of its charter, certificate of incorporation, articles of association, or trust indenture, or of a bylaw or regulation duly adopted thereunder, to postpone the date of payment or satisfaction upon redemption of redeemable securities issued by it, shall be exempt from the requirements of this subsection; but such exemption shall terminate upon the expiration of one year from the effective date of this subchapter, or upon the repeal or amendment of such provision, or upon the sale by such company after March 15, 1940, of any security (other than short-term paper) of which it is the issuer, whichever first occurs.”

1970—Subsec. (b). Pub. L. 91–547, § 12(a), designated existing provisions as par. (1), inserted “notwithstanding the provisions of subsection (b)(8) thereof but”, and “other” in phrase “all other provisions”, substituted exclusion of “excessive sales load” for “unconscionable or grossly excessive sales load”, provided for allowance for reasonable compensation for sales personnel, broker-dealers, and underwriters, and for reasonable sales loads to investors, and for grant by Commission of appropriate qualified exemptions from provisions of this section where on application or otherwise it appears that smaller companies are subject to relatively higher operating costs, and added pars. (2) to (4).

Subsec. (c). Pub. L. 91–547, § 12(b), provided for application of rules and regulations to registered investment companies, struck out introductory phrase “After one year from the effective date of this chapter”, “registered” before “securities association” where first appearing, and substituted “prescribed in subsection (a) of this section” for “prescribed in subsections (a) and (b) of this section” and “. Any rules and regulations” for “; and any rules and regulations”.

Subsec. (d). Pub. L. 91–547, § 12(c), substituted “public offering price described in the prospectus. Nothing in this subsection” for “public offering price described in the prospectus: Provided, however, That nothing in this subsection” and struck out “clause (1) or (2) of” before “section 80a–11(b) of this title”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1970 Amendment

Amendment by Pub. L. 91–547 effective Dec. 14, 1970, see section 30 of Pub. L. 91–547, set out as a note under section 80a–52 of this title.

### Executive Documents

### Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.