meaning of assignment of securities

15 U.S. Code § 80a–2 - Definitions; applicability; rulemaking considerations

Any person who owns beneficially, either directly or through one or more controlled companies, more than 25 per centum of the voting securities of a company shall be presumed to control such company . Any person who does not so own more than 25 per centum of the voting securities of any company shall be presumed not to control such company . A natural person shall be presumed not to be a controlled person within the meaning of this subchapter. Any such presumption may be rebutted by evidence, but except as hereinafter provided, shall continue until a determination to the contrary made by the Commission by order either on its own motion or on application by an interested person . If an application filed hereunder is not granted or denied by the Commission within sixty days after filing thereof, the determination sought by the application shall be deemed to have been temporarily granted pending final determination of the Commission thereon. The Commission, upon its own motion or upon application, may by order revoke or modify any order issued under this paragraph whenever it shall find that the determination embraced in such original order is no longer consistent with the facts.

No provision in this subchapter shall apply to, or be deemed to include, the United States , a State , or any political subdivision of a State , or any agency, authority, or instrumentality of any one or more of the foregoing, or any corporation which is wholly owned directly or indirectly by any one or more of the foregoing, or any officer, agent, or employee of any of the foregoing acting as such in the course of his official duty, unless such provision makes specific reference thereto.

Whenever pursuant to this subchapter the Commission is engaged in rulemaking and is required to consider or determine whether an action is consistent with the public interest, the Commission shall also consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and capital formation.

The Securities Exchange Act of 1934 , referred to in subsec. (a)(11), (44), is act June 6, 1934, ch. 404, 48 Stat. 881 , which is classified principally to chapter 2B (§ 78a et seq.) of this title. For complete classification of this Act to the Code, see section 78a of this title and Tables.

The Securities Act of 1933 , referred to in subsec. (a)(31), (44), is act May 27, 1933, ch. 38, title I, 48 Stat. 74 , which is classified generally to subchapter I (§ 77a et seq.) of chapter 2A of this title. For complete classification of this Act to the Code, see section 77a of this title and Tables.

The Trust Indenture Act of 1939 , referred to in subsec. (a)(44), is title III of act May 27, 1933, ch. 38, as added Aug. 3, 1939, ch. 411, 53 Stat. 1149 , which is classified generally to subchapter III (§ 77aaa et seq.) of chapter 2A of this title. For complete classification of this Act to the Code, see section 77aaa of this title and Tables.

The Small Business Investment Act of 1958 , referred to in subsec. (a)(46)(B), (47)(C), is Pub. L. 85–699 , Aug. 21, 1958 , 72 Stat. 689 , which is classified principally to chapter 14B (§ 661 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 661 of this title and Tables.

Words “Philippine Islands” deleted from definition of term “ State ” under authority of Proc. No. 2695, which granted independence to the Philippine Islands. Proc. No. 2695 was issued pursuant to section 1394 of Title 22 , Foreign Relations and Intercourse, and is set out as a note under that section.

2010—Subsec. (a)(19). Pub. L. 111–203, § 985(d)(1)(A) , substituted “clause (vii)” for “clause (vi)” in two places in concluding provisions.

Subsec. (a)(19)(A)(vi)(III), (B)(vi)(III). Pub. L. 111–203, § 985(d)(1)(B) , inserted “and” at end.

Subsec. (a)(44). Pub. L. 111–203, § 986(c)(1) , struck out “ ‘ Public Utility Holding Company Act of 1935 ’,” after “ ‘ Securities Exchange Act of 1934 ’,”.

Subsec. (a)(54). Pub. L. 111–203, § 769 , added par. (54).

2006—Subsec. (a)(53). Pub. L. 109–291 added par. (53).

2000—Subsec. (a)(36). Pub. L. 106–554, § 1(a)(5) [title II, § 209(a)(1)] , inserted “security future, ” after “treasury stock,”.

Subsec. (a)(52). Pub. L. 106–554, § 1(a)(5) [title II, § 209(a)(3)] , added par. (52).

1999—Subsec. (a)(5)(A). Pub. L. 106–102, § 223 , substituted “a depository institution (as defined in section 1813 of title 12 ) or a branch or agency of a foreign bank (as such terms are defined in section 3101 of title 12 )” for “a banking institution organized under the laws of the United States” .

Subsec. (a)(6). Pub. L. 106–102, § 215 , amended par. (6) generally. Prior to amendment, par. (6) read as follows: “  ‘Broker’ means any person engaged in the business of effecting transactions in securities for the account of others, but does not include a bank or any person solely by reason of the fact that such person is an underwriter for one or more investment companies.”

Subsec. (a)(11). Pub. L. 106–102, § 216 , amended par. (11) generally. Prior to amendment, par. (11) read as follows: “  ‘Dealer’ means any person regularly engaged in the business of buying and selling securities for his own account, through a broker or otherwise, but does not include a bank, insurance company, or investment company, or any person insofar as he is engaged in investing, reinvesting, or trading in securities, or in owning or holding securities, for his own account, either individually or in some fiduciary capacity, but not as a part of a regular business.”

Subsec. (a)(19)(A)(v). Pub. L. 106–102, § 213(a)(1) , added cl. (v) and struck out former cl. (v) which read as follows: “any broker or dealer registered under the Securities Exchange Act of 1934 or any affiliated person of such a broker or dealer, and”.

Subsec. (a)(19)(A)(vi), (vii). Pub. L. 106–102, § 213(a)(2) , (3), added cl. (vi) and redesignated former cl. (vi) as (vii).

Subsec. (a)(19)(B)(v). Pub. L. 106–102, § 213(b)(1) , added cl. (v) and struck out former cl. (v) which read as follows: “any broker or dealer registered under the Securities Exchange Act of 1934 or any affiliated person of such a broker or dealer, and”.

Subsec. (a)(19)(B)(vi), (vii). Pub. L. 106–102, § 213(b)(2) , (3), added cl. (vi) and redesignated former cl. (vi) as (vii).

1998—Subsec. (a)(8). Pub. L. 105–353 made a technical amendment to reference in original act which appears in text as reference to title 11.

1996—Subsec. (a)(46)(C)(iii), (iv). Pub. L. 104–290, § 503 , added cl. (iii) and redesignated former cl. (iii) as (iv).

Subsec. (a)(48)(B). Pub. L. 104–290, § 504 , inserted at end “provided further that a business development company need not make available significant managerial assistance with respect to any company described in paragraph (46)(C)(iii), or with respect to any other company that meets such criteria as the Commission may by rule, regulation, or order permit, as consistent with the public interest, the protection of investors, and the purposes of this subchapter; and”.

Subsec. (a)(51). Pub. L. 104–290, § 209(b) , added par. (51).

Subsec. (c). Pub. L. 104–290, § 106(c) , added subsec. (c).

1990—Subsec. (a)(49), (50). Pub. L. 101–550 added pars. (49) and (50).

1987—Subsec. (a)(19). Pub. L. 100–181, § 601 , inserted “completed” before “fiscal years” wherever appearing in subpars. (A)(iv), (vi) and (B)(iv), (vi).

Subsec. (a)(39). Pub. L. 100–181, § 602 , struck out reference to Canal Zone.

Subsec. (a)(48)(B). Pub. L. 100–181, § 603 , substituted “paragraphs (1) through (3) of section 80a–54(a) of this title ” for “sections 80a–54(a)(1) through (3) of this title”.

1982—Subsec. (a)(36). Pub. L. 97–303 inserted “any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency,” after “mineral rights,”.

1980—Subsec. (a)(46) to (48). Pub. L. 96–477 added pars. (46) to (48).

1978—Subsec. (a)(8). Pub. L. 95–598 substituted “a case under title 11” for “bankruptcy”.

1970—Subsec. (a)(5). Pub. L. 91–547, § 2(a)(1) , substituted “under the authority of the Comptroller of the Currency” for “under section 248(k) of title 12 ,”.

Subsec. (a)(19). Pub. L. 91–547, § 2(a)(3) , added par. (19). Former par. (19) redesignated (20).

Subsecs. (a)(20) to (36). Pub. L. 91–547, § 2(a)(2) , redesignated former pars. (19) to (35) as (20) to (36), respectively.

Subsec. (a)(37). Pub. L. 91–547, § 2(a)(4) , added par. (37). Former par. (37) redesignated (39).

Subsecs. (a)(38) to (44). Pub. L. 91–547, § 2(a)(2) , redesignated former pars. (36) to (42) as (38) to (44).

Subsec. (a)(45). Pub. L. 91–547, § 2(a)(5) , added par. (45).

1960—Subsec. (a)(37). Pub. L. 86–624 struck out reference to Hawaii.

1959—Subsec. (a)(37). Pub. L. 86–70 struck out reference to Alaska.

1954—Subsec. (a)(30). Act Aug. 10, 1954 , substituted “section 10(a) of the Securities Act of 1933 ” for “section 5(b) of the Securities Act of 1933 ”.

Amendment by sections 985(d)(1) and 986(c)(1) of Pub. L. 111–203 effective 1 day after July 21, 2010 , except as otherwise provided, see section 4 of Pub. L. 111–203 , set out as an Effective Date note under section 5301 of Title 12 , Banks and Banking.

Amendment by section 769 of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010 , or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203 , set out as a note under section 77b of this title .

Amendment by Pub. L. 106–102 effective 18 months after Nov. 12, 1999 , see section 225 of Pub. L. 106–102 , set out as a note under section 77c of this title .

Pub. L. 104–290, title II, § 209(e) , Oct. 11, 1996 , 110 Stat. 3436 , provided that:

Amendment by Pub. L. 95–598 effective Oct. 1, 1979 , see section 402(a) of Pub. L. 95–598 , set out as an Effective Date note preceding section 101 of Title 11 , Bankruptcy.

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 .

Amendment by act Aug. 10, 1954 , effective 60 days after Aug. 10, 1954 , see note set out under section 77b of this title .

Pub. L. 104–290, title II, § 209(d)(2) , Oct. 11, 1996 , 110 Stat. 3435 , provided that:

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 .

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Assign: What It Means, How It Works, Example

What Is Assign?

Broadly speaking, to assign is to transfer the rights or property from one person or business to another. An assignment can be any transfer of any sort of rights. In the financial markets, the term "assign" generally relates to the party that is required to deliver on an options contract . In the wider business world, it may also refer to the transfer of trademarks, banknotes, or other property rights. Mortgage assignments involve transferring mortgage deeds, while lease assignments transfer lease contracts.

Key Takeaways

• To assign in the options market is to randomly match buyers and sellers for maturing or exercised options contracts.
• The assigned party is required to deliver the assets underlying the options to the contract holder at the date established by the contract.
• More generally, to assign is to transfer rights or property from one party to another.

Understanding Assign

To assign means one of two actions taken in transferring rights. It refers either to the transfer of property rights from one individual or entity to another individual or entity or when an options contract is exercised . When an options contract is exercised, the owner of the contract assigns an options writer to the obligation to fulfill the requirements of the contract.

In the options and futures contract markets, assign is the matching of counterparties. The process is random and carried out by clearinghouses and brokerages. Once the assignment is made, the underlying securities or commodities are delivered to the holders of maturing or exercised contracts.

For example, if one trader is looking to purchase a May futures corn contract and another trader is looking to sell a May futures corn contract, the clearinghouse would match the requests of both traders, assigning them the appropriate contracts. The traders themselves will not have to search for the corresponding contract but just execute their orders, which are then matched by the clearinghouse.

Not all options contracts will be exercised or tendered. The ones that are exercised or tendered must be settled with the delivery of the underlying security. These are randomly assigned to brokerages that, in turn, randomly select which of their clients will be assigned.

During an assignment of options or futures contracts, the clearinghouse assigns an option writer who will be the required buyer or seller of the underlying contract upon its exercise.

Assign and Options

Options offer the right but not the obligation to buy an underlying asset at a specific price. In the U.S. markets, options can be exercised anytime, while options in the European markets are exercised only on the option expiration date. If an option is exercised, the assignment will be made immediately.

When an option is exercised, the option writer, who is the call seller, in this case, must fulfill the obligations of the contract. The call writer could be obligated to sell a specific number of underlying securities for a specific price, for example.

Options buyers speculate on the future movements of stocks or other assets. Option buyers believe that the underlying asset will move one way, while option sellers, who are called writers, are betting that the asset moves in the opposite direction.

Brokerages and clearinghouses are needed to connect buyers and sellers of options contracts. The seller and writer of a call option will sell a set number of shares at a set price if the option is exercised. If the option is called, the brokerage assigns a client with a short position, again at random, to deliver the stock to another client with a long position in the same contract. The brokerage will randomly select the counterparty who must deliver the asset when the contract requires it to be delivered.

Assign and Property

In regards to property, assign refers to the transfer of rights. This can refer to any asset, whether tangible or intangible , property, or contract. The assignment is completed via an agreed-upon written document.

For example, a mortgage assignment is when the mortgage deed allows an individual interest in a property in return for payments received. Many banks that have mortgages sell their mortgages to other lenders in return for a lump payment in order to free up their balance sheet to make new mortgages. The bank would be assigning their mortgages to another lender.

Another form of property assignment includes wage assignments , where a court rules that a portion of a person's wages must be withheld in order to make specific payments, such as alimony .

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Stock Assignment Agreement: Everything You Need to Know

A stock assignment agreement is the transfer of ownership of stock shares. 3 min read updated on January 01, 2024

Updated November 2, 2020:

A stock assignment agreement is the transfer of ownership of stock shares. It occurs when one party legally transfers their shares of stock property to another party or to a business. It's like the type of assignment agreement that happens when one person sells a car to another, which can also be referred to as assigning the vehicle's title to a new owner.

Examples of Assignment of Shares

In the first example of assignment of shares, the seller is assigning a certain number of shares to the buyer. That number includes the percentage of the shares that the buyer can potentially forfeit. This is only to the extent that the underwriter over-allowed an option, which is described in the company's statement of registration using Form S-1 and amended under the 1933 Securities Act.

Part of those shares the buyer holds can equal up to 25 percent of the total shares. Those shares are referred to as the "buyer earnout" shares and are potentially forfeited by the buyer in the following manner:

• Half of the buyer earnout shares are potentially forfeited if the last price that the company stock sells at doesn't equal or exceed a specified amount, such as $12 per share. This number is arrived at after any stock splits, reorganization, stock dividends are paid, and any recapitalization. These things may have occurred during any 20-day trading period within the past 30 days of trading. It also may have been within the past two years after the company's initial business combination closing.
• Information on the initial business combination closing date is found in the registration statement of the company. In this example, the buyers pay the seller the aggregated amount for all of the shares. The purchase price is what the seller receives as consideration in exchange for the assignment of the company shares.
• At the time of closing the sale, the seller assigns, conveys, and delivers to the company all rights, titles, and interests that the seller holds. This is done by assigning the shares of stock.

Vague Employer Promises to Employees

Before filing for incorporation, some business founders and some business leaders who are promoting a corporation based on a vision might make promises to employees or attorneys that are a bit vague. These promises might focus on offering the other party a share in the business in exchange for their work.

It's also common for a corporation's owner to offer employees a deal where they can earn some share of ownership in the company for working a certain amount of time. It also happens sometimes that, after the employee has fulfilled their part of the deal by working, that main shareholder or company founder might come to regret the deal made earlier. At that time, the shareholder or founder might delay issuing the shares that were promised or flat-out refuse to issue the shares to the employee.

An Example That Went to Court

This example of an employer making vague promises ended up in court. The defendant was the corporation's only shareholder . The defendant entered into a contract with the plaintiff in which he offered to relinquish the existing business and transfer all of his employees and his customers to the plaintiff. The plaintiff was to get one-quarter ownership of the incorporated business when it reached a specific amount of earnings.

• Then, the defendant regretted the decision to make the agreement after finding out it cost more than he had expected and that the business was losing money. At that time, the defendant went to the plaintiff and insisted that the plaintiff start acting like one of the owners by contributing funds and assuming some of the debt.
• The defendant was angry when the plaintiff wouldn't do that. So, he decided to delay the stock issue that had been promised and even got the plaintiff to agree to the delay. The defendant agreed on the condition that the defendant would get the tax write-off from the losses of the S-corporation .
• In the end, the defendant fired the plaintiff without ever issuing the shares that had been promised. As a result, the judgment for the plaintiff regarding the breach of fiduciary duty, referring the debts of the business that the plaintiff hadn't paid off, was reversed by the Supreme Court on the basis that the plaintiff had no duties because the plaintiff was never a shareholder as had been promised.

If you need help with a stock assignment agreement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Content Approved by UpCounsel

• How to Issue Shares in a Company
• Authorized Shares
• Authorized Stock
• How to Issue More Shares
• How to Transfer Shares of Stock Within a Corporation?
• Authorized Shares vs Issued Shares
• Issued Shares vs Outstanding Shares
• What is Stock Corporation?
• Issuance of Stock
• Corporate Stock Transfer Agreement

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Researching the Federal Securities Laws Through the SEC Website

Introduction.

This guide provides an overview of how to research the securities law through the SEC website and is provided as a service to investors and members of the public. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule you should consult with an attorney who specializes in securities law. This guide does not address primary and secondary sources available in print or through other websites, other than those to which the SEC website links. The guide is organized by providing suggestions for the research of:

• Statutes (the Securities Laws)
• SEC Rules and Regulations;

SEC Concept Releases

Sec interpretive releases, sec staff interpretations.

In general, you should conduct your research on the federal securities laws in the order prescribed above. This is because while the federal statutes and the SEC rules and regulations have the force of law, other SEC-issued documents vary in the degree to which they carry the force of law. SEC Staff documents have no legal force or effect: they do not alter or amend applicable law, and they create no new or additional obligations for any person.

Major pieces of legislation, such as the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Company Act of 1940, provide the framework for the SEC's oversight of the securities markets. These statutes are broadly drafted, establishing basic principles and objectives. The laws that govern the securities industry include:

• Securities Act of 1933
• Securities Exchange Act of 1934
• Trust Indenture Act of 1939
• Investment Company Act of 1940
• Investment Advisers Act of 1940
• Securities Investor Protection Act of 1970
• Public Company Accounting Reform and Corporate Responsibility Act of 2002  (Sarbanes-Oxley Act of 2002)
• Wall Street Reform and Consumer Protection Act of 2010  (Dodd-Frank Act of 2010)

You can find general descriptions of the objectives of each of these statutes in the “ About the SEC ” section of our website. The web pages of the  Division of Investment Management  and the  Division of Corporation Finance  also provide links to the federal securities laws and regulations that relate to the areas that each Division oversees.

TIP: The SEC website links to the text of the federal securities laws provided by the House Committee on Financial Services. The texts include references to the  United States Code  (U.S.C). U.S.C. citations are the official citations for federal laws. You can find the securities laws in Title 15 of the U.S.C. For example, the Securities Act of 1933 is 15 U.S.C. § 77a et seq.; the Securities Act of 1934 is 15 U.S.C. § 78a et seq.; the Investment Company Act of 1940 is 15 U.S.C. § 80-1 et seq.; and the Investment Adviser Act is 15 U.S.C. §80b-1 et seq.

Legislative History

Legislative history is the official record of the passage of a statute. It is useful if you are looking for Congressional intent at the time Congress passed a particular statute. Although our website does not link to the legislative history of the securities laws, we provide a link to the Library of Congress’  Congress.gov online database. Congress.gov is the official website for U.S. federal legislative information. The site provides access to accurate, timely, and complete legislative information for Members of Congress, legislative agencies, and the public. 

SEC Rules and Rulemaking

Rulemaking  is the process by which federal agencies implement legislation passed by Congress and signed into law by the President. The SEC engages in rulemaking to maintain fair and orderly markets and to protect investors by altering regulations or creating new ones. There are both official and unofficial sources of SEC rules and regulations.

NOTE: If you are researching administrative regulations, including SEC rules, you always should check whether they are current. You also should check the coverage and status of all sources.

Official Sources

• The Federal Register . The Federal Register is the official daily publication where the SEC and other federal agencies first publish proposed regulations for comment, adopted final regulations, explanations of actions taken, and announcements of significant interpretations of the law. The  Regulatory Actions  section of our webpage may include links to the Federal Register publication of a specific rule. If our web pages do not link to a Federal Register release, you can find a copy of the release by going to the website of the  U.S. Government Printing Office .
• 17 CFR, part 230 -  Securities Act of 1933
• 17 CFR, part 240 -  Securities Exchange Act of 1934
• 17 CFR, part 260 -  Trust Indenture Act of 1939
• 17 CFR, part 270 -  Investment Company Act of 1940
• 17 CFR, part 275 -  Investment Advisers Act of 1940
• 17 CFR, part 300 -  Securities Investor Protection Act  (Rules of SIPC)

You can find other frequently requested material in the CFR at:

• 17 CFR, part 200 -  General SEC Rules  (includes organization of SEC, codes of conduct and ethics; information requests)
• 17 CFR, part 201 -  SEC Rules of Practice
• 17 CFR, part 202 -  Informal Procedures
• 17 CFR, part 203 -  Investigations
• 17 CFR, part 210 -  Regulation S-X
• 17 CFR, part 229 -  Regulation S-K
• 17 CFR, part 242 - Regulation M, SHO, ATS, AC, NMS
• 17 CFR, part 248 - Regulation S-P, S-AM, and S-ID (includes ID Theft and Protection of Customer Information)

Tip:  Individuals often refer to SEC rules and regulations by the number only, without reference to the entire CFR citation. However, you need the full CFR citation to find a specific rule. For example if you are looking for Rule 10b-5 of the Securities Exchange Act of 1934, the citation is 17 CFR 240.10b-5. An idiosyncrasy of the federal securities laws is that the term “regulation” often refers to a collection of rules for example, Regulation S-K and  Regulation SHO .

The  SEC's website  provides access to regulations codified in the CFR. In addition, the SEC’s website includes selected rules and regulations on the  Forms  web page.

CFR Titles are updated annually. Therefore if you are researching recent rulemaking, you should check GPO’s website for the monthly “ List of CFR Sections Affected .” (LSA). As noted on GPO’s web page, the LSA “lists proposed, new, and amended Federal regulations that have been published in the Federal Register since the most recent revision date of a CFR title. Each LSA issue is cumulative and contains the CFR part and section numbers, a description of its status (e.g., amended, confirmed, revised), and the Federal Register page number where the change(s) may be found.”

The CFR references the Federal Register citation for the original adopting release as well as any releases amending the rule or regulation.

Unofficial Sources

The “ Regulatory Actions ” section of our website is an unofficial source of both Final and Proposed Rulemaking Releases. You should note that the date of the releases reported on our website is the date of the Commission’s approval and not the publication date in the Federal Register. 

The “ Rulemaking Index ” section of our website lists rulemaking activity since 2008 grouped by file number, which allows you to view the proposed rules, final rules and other actions related to a particular rulemaking. You can sort this list by most recent action, file number, or the informal short name of the rulemaking. By using the "Status" filter, you can view rulemakings that have been completed, or rulemakings that have been proposed but not yet completed. You can also filter to display rulemakings related to a specific SEC division or office. This index omits certain technical rulemakings, including updates to the EDGAR filing manual.

Tip:  Rulemaking releases, unlike the text of the rules found in the CFR, provide in-depth background information about the origin of specific rules. The releases include, for example, the Commission’s basis for proposing or adopting the rule, changes from earlier proposed rules, and a summary of public comments.

• Final Rules.   Final rules releases  dating back to September 1994 are available on our website as are  selected rulemaking releases  for the period from 1962 to 1994. The Details section for a particular release will include links to the proposed rule(s), comments, and also identify the effective date and the compliance date (where appropriate). The “Final Rules” section also will include amendments or corrections to the rule as well as notices of extensions or compliance dates.
• Proposed Rules.  The “ Proposed Rules ” web page includes links to the releases of proposed rules and links to public comments about the rules. We also post the Federal Register version of the release. You can find the proposed rules by looking for either the release number (in some cases the first of several release numbers for the specific rule) or by date. The web page does not organize the proposed rules by subject matter or by file number. The website includes proposed rules going back to 1994.

What Is an Effective Date?

The effective date is the date on which a rule or regulation begins to apply and becomes enforceable.

What Is a Compliance Date?

The compliance date is the date on which the entities covered by the rule must comply with the rule.

What Do the Prefixes to the Release Numbers Mean?

The prefixes included in the release numbers identify the Act pursuant to which the rule was promulgated. Common prefixes are:

33-: Securities Act of 1933 34-: Securities Exchange Act of 1934 39-: Trust Indenture Act of 1939 IA-: Investment Advisers Act of 1940 IC-: Investment Company Act of 1940 FR-: Financial Releases (should not be confused with citations to the Federal Register)

If you are researching a rule by release number, you can use the search engine at the top of our home page. This will help you to locate a release in the event that this is not the release number identified on the rulemaking pages.

What Is the Difference Between an SR- and an S7- File?

S7- files are the file numbers assigned to Commission rules. SR-files refer to rules of the self-regulatory organizations.

The Commission occasionally publishes  "concept" releases  to solicit the public's views on securities issues so that we can better evaluate the need for future rulemaking. The Regulatory Actions section of our website includes concept releases dating back to 1994.

The Commission occasionally provides guidance on topics of general interest to the business and investment communities by issuing  "interpretive" releases , in which we publish our views and interpret the federal securities laws and SEC regulations. Interpretive releases (like concept releases) are not enforceable laws and regulations but provide useful guidance as to the position of the Commission on various issues. The “ Interpretive Release ” web page includes interpretive releases from 1995 to the present. The Interpretive Release web page does not organize the releases by topic. However, the web page for the  Division of Corporation Finance  includes interpretive releases and other information, organized by subject category, dating back to 2002. The  Division of Trading and Markets’ and Division of Investment Management’s  web pages also include interpretive releases.

Tip:  The CFR includes indices of interpretive releases of the Commission, organized by the relevant Act. The CFR includes the Federal Register citation. For example, you can find citations for interpretive releases covering the Securities Exchange Act at  17 CFR, part 241 .

SEC Policy Statements

From time to time, the Commission issues a " policy statement " to clarify its position on a particular matter. The policy statements include interagency statements. You can find the policy statements on our “ Policy Statements ” web page.

The SEC staff provides informal guidance through various oral and written statements. Because they represent the views of the staff, these statements have no legal force or effect: they do not alter or amend applicable law, and they create no new or additional obligations for any person. You can find links to the available statements through the  Staff Interpretations  section of our website.

SEC Staff Legal and Accounting Bulletins

Staff Legal Bulletins  summarize SEC staff's views regarding various aspects of the federal securities laws and SEC regulations. They represent interpretations and policies followed by the Divisions of Corporation Finance, Trading and Markets, or Investment Management on any given matter.

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Assignments by way of security

Published by a lexisnexis banking & finance expert.

Assignments by way of security can take different forms and it is important to understand how they are created and their effect. Security over choses in action such as debts and other contractual rights is often taken by way of an equitable or statutory assignment by way of security.

This Practice Note explains:

what assignments by way of security are

which types of assets they are used for

whether they take legal, statutory or equitable form and the advantages of the statutory form

why it is important to serve notice of an assignment by way of security

What is an assignment by way of security?

Assignments by way of security are a type of mortgage. They involve:

an assignment (ie transfer) of rights by the assignor to the assignee

subject to:

an obligation to reassign those rights back to the assignor upon the discharge of the obligations which have been secured

When the obligations that have been secured have been discharged,

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Related legal acts:

• Law of Property Act 1925 (1925 c 20)
• Small Business, Enterprise and Employment Act 2015 (2015 c 26)

Key definition:

Assignor definition, what does assignor mean.

The entity disposing of an asset by an assignment .

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Assignment of Rents – What, Why, and How?

Article by:

Madelaine prescott, esq., share this post:.

• November 29, 2023

These days, almost all commercial loans include an Assignment of Rents as part of the Deed of Trust or Mortgage. But what is an Assignment of Rents, why is this such an important tool, and how are they enforced?

An Assignment of Rents (“AOR”) is used to grant the lender on a transaction a security interest in existing and future leases, rents, issues, or profits generated by the secured property, including cash proceeds, in the event a borrower defaults on their loan. The lender can use the AOR to step in and directly collect rental payments made by the tenant. For an AOR to be effective, the lender’s interest must be perfected, which has a few fairly simple requirements. The AOR must be in writing, executed by the borrower, and recorded with the county where the property is located. Including an AOR in the recorded Deed of Trust or Mortgage is the easiest and most common way to ensure the AOR meets these requirements should it ever need to be utilized.

When a borrower defaults, lenders can take advantage of AORs as an alternative to foreclosure to recoup their investment. With a shorter timeline and significantly lower costs, it is certainly an attractive option for lenders looking to get defaulted borrowers back on track with payments, without the potential of having to take back a property and attempting to either manage it or sell it in hopes of getting your money back out of the property. AORs can be a quick and easy way for the lender to get profits generated by the property with the goal of bringing the borrower out of default. But lenders should carefully monitor how much is owed versus how much has been collected. If the AOR generates enough funds so that the borrower is no longer in default, the lender must stop collecting rents generated by the property.

Enforcement of an AOR can also incentivize borrowers to work with the lender to formulate a plan, as many borrowers rely on rental income to cover expenses related to the property or their businesses. Borrowers are generally more willing to come to the table and negotiate a mutual, amicable resolution with the lender in order to protect their own investment. A word of warning to lenders though: since rental income is frequently used to pay expenses on the property, such as the property manager, maintenance, taxes, and other expenses, the lender needs to ensure they do not unintentionally hurt the value of the property by letting these important expenses fall behind. This may hurt the lender’s investment as well, as the property value could suffer, liens could be placed on the property, or the property may fall into disrepair if not properly maintained. It is also important for lenders to be aware of the statutes surrounding the payment of these expenses when an AOR is being used, as some state’s statutes require the lender to pay certain property expenses out of the collected rents if requested by the borrower.

In addition to being shorter and cheaper than foreclosure, AORs can be much easier to enforce. In California, the enforcement of an AOR is governed by California Civil Code §2938. This statute specifies enforcement methods lenders can use and restrictions on use of these funds by the lender, among other things. Under CA Civil Code §2938(c), there are 4 ways to enforce an AOR:

• The appointment of a receiver;
• Obtaining possession of the rents, issues, profits;
• Delivery to tenant of a written demand for turnover of rents, issues, and profits in the correct form; or
• Delivery to assignor of a written demand for the rents, issues, or profits.

One or more of these methods can be used to enforce an AOR. First, a receiver can be appointed by the court, and granted specific powers related to the AOR such as managing the property and collecting rents. They can have additional powers though; it just depends on what the court orders. This is not the simplest or easiest option as it requires court involvement, but this is used to enforce an AOR, especially when borrowers or tenants are uncooperative. Next is obtaining possession of the rents, issues, profits, which is exactly as it seems; lenders can simply obtain actual possession of these and apply the funds to the loan under their AOR.

The third and fourth options each require delivery of a written demand to certain parties, directing them to pay rent to the lender instead of to the landlord. Once the demand is made, the tenant pays their rent directly to the lender, who then applies the funds to the defaulted loan. These are both great pre-litigation options, with advantages over the first two enforcement methods since actual possession can be difficult to obtain and courts move slowly with high costs to litigate. The written demands require a specific form to follow called the “Demand To Pay Rent to Party Other Than Landlord”, as found at CA Civil Code §2938(k). There are other notice requirements to be followed here, so it is essential to consult with an experienced attorney if you are considering either of these options. California Civil Code §2938 specifically provides that none of the four enforcement methods violate California’s One Action Rule nor the Anti-Deficiency Rule, so lenders can confidently enforce their AORs using the above methods with peace of mind that they are not violating other California laws.

Whether you are looking to originate a new loan, or you are facing a default by your borrower, understanding what an Assignment of Rents is and how it operates can be extremely beneficial. Enforcing an AOR can be an easier option than foreclosure and can help promote a good relationship with your borrower when handled correctly. If you have any questions about AORs, or need further details on how to enforce them, Geraci is here to help.

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Assignment of Lease

Jump to Section

What is an assignment of lease.

The assignment of lease is a title document that transfers all rights possessed by a lessee or tenant to a property to another party. The assignee takes the assignor’s place in the landlord-tenant relationship.

You can view an example of a lease assignment here .

How Lease Assignment Works

In cases where a tenant wants to or needs to get out of their lease before it expires, lease assignment provides a legal option to assign or transfer rights of the lease to someone else. For instance, if in a commercial lease a business leases a place for 12 months but the business moves or shuts down after 10 months, the person can transfer the lease to someone else through an assignment of the lease. In this case, they will not have to pay rent for the last two months as the new assigned tenant will be responsible for that.

However, before the original tenant can be released of any responsibilities associated with the lease, other requirements need to be satisfied. The landlord needs to consent to the lease transfer through a “License to Assign” document. It is crucial to complete this document before moving on to the assignment of lease as the landlord may refuse to approve the assignment.

Difference Between Assignment of Lease and Subletting

A transfer of the remaining interest in a lease, also known as assignment, is possible when implied rights to assign exist. Some leases do not allow assignment or sharing of possessions or property under a lease. An assignment ensures the complete transfer of the rights to the property from one tenant to another.

The assignor is no longer responsible for rent or utilities and other costs that they might have had under the lease. Here, the assignee becomes the tenant and takes over all responsibilities such as rent. However, unless the assignee is released of all liabilities by the landlord, they remain responsible if the new tenant defaults.

A sublease is a new lease agreement between the tenant (or the sublessor) and a third-party (or the sublessee) for a portion of the lease. The original lease agreement between the landlord and the sublessor (or original tenant) still remains in place. The original tenant still remains responsible for all duties set under the lease.

Here are some key differences between subletting and assigning a lease:

• Under a sublease, the original lease agreement still remains in place.
• The original tenant retains all responsibilities under a sublease agreement.
• A sublease can be for less than all of the property, such as for a room, general area, portion of the leased premises, etc.
• Subleasing can be for a portion of the lease term. For instance, a tenant can sublease the property for a month and then retain it after the third-party completes their month-long sublet.
• Since the sublease agreement is between the tenant and the third-party, rent is often negotiable, based on the term of the sublease and other circumstances.
• The third-party in a sublease agreement does not have a direct relationship with the landlord.
• The subtenant will need to seek consent of both the tenant and the landlord to make any repairs or changes to the property during their sublease.

Here is more on an assignment of lease here .

Parties Involved in Lease Assignment

There are three parties involved in a lease assignment – the landlord or owner of the property, the assignor and the assignee. The original lease agreement is between the landlord and the tenant, or the assignor. The lease agreement outlines the duties and responsibilities of both parties when it comes to renting the property. Now, when the tenant decides to assign the lease to a third-party, the third-party is known as the assignee. The assignee takes on the responsibilities laid under the original lease agreement between the assignor and the landlord. The landlord must consent to the assignment of the lease prior to the assignment.

For example, Jake is renting a commercial property for his business from Paul for two years beginning January 2013 up until January 2015. In January 2014, Jake suffers a financial crisis and has to close down his business to move to a different city. Jake doesn’t want to continue paying rent on the property as he will not be using it for a year left of the lease. Jake’s friend, John would soon be turning his digital business into a brick-and-mortar store. John has been looking for a space to kick start his venture. Jake can assign his space for the rest of the lease term to John through an assignment of lease. Jake will need to seek the approval of his landlord and then begin the assignment process. Here, Jake will be the assignor who transfers all his lease related duties and responsibilities to John, who will be the assignee.

You can read more on lease agreements here .

Image via Pexels by RODNAE

Assignment of Lease From Seller to Buyer

In case of a residential property, a landlord can assign his leases to the new buyer of the building. The landlord will assign the right to collect rent to the buyer. This will allow the buyer to collect any and all rent from existing tenants in that property. This assignment can also include the assignment of security deposits, if the parties agree to it. This type of assignment provides protection to the buyer so they can collect rent on the property.

The assignment of a lease from the seller to a buyer also requires that all tenants are made aware of the sale of the property. The buyer-seller should give proper notice to the tenants along with a notice of assignment of lease signed by both the buyer and the seller. Tenants should also be informed about the contact information of the new landlord and the payment methods to be used to pay rent to the new landlord.

You can read more on buyer-seller lease assignments here .

Get Help with an Assignment of Lease

Do you have any questions about a lease assignment and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from real estate lawyers who specialize in lease assignment.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

Meet some of our Assignment of Lease Lawyers

My legal coverage includes Business Law, Commercial Litigation, Appeals and Trusts & Estates. I also handle Trademark applications and issues. I am a designated FINRA (Financial Industry Regulatory Authority) arbitrator. I have done pro bono work in the Federal Court mediation program. I have worked for companies as a legal writer, editor and content provider. I have written legal articles for the New York Law Journal and the New York State Bar Association magazine. I was a guest lecturer at New York University on the First Amendment in the M.S. program of Public Relations and Corporate Communication program for the course Communication Ethics, Law and Regulation (Adjunct Professor Douglas Rozman). I graduated from Harvard University with an MPA, from Brooklyn Law School with a JD where I was a Richardson Merit Scholar; and Carnegie Mellon University with a BS, cum laude, concentrating in Administration and Management Science, Mathematics and Economics.

Brittany B.

I am a tax attorney with years of experience as in house counsel at an accounting firm. I have also done tax litigation and audit representation. I work with for profits and non profits.

I am licensed in both Texas and Arkansas but actively working in Arkansas. My primary focus is criminal defense, family law, and estate planning (wills and trusts).

I represent startups, investment firms, and individuals frequently with equity and debt financing, M&A transactions, and commercial contracts.

Nicole Yñigo is an accomplished attorney with over nine years of experience in the legal field. Raised in Miami, she obtained her education from the School for Advanced Studies, Florida International University, and St. Thomas University School of Law. Nicole is dedicated to helping her clients achieve their legal goals and has built a strong reputation for providing personalized and effective legal representation. She has worked with various law firms and insurance companies on both Plaintiff and Defense matters. Nicole is the founder of The Ynigo Legal Group, where she offers compassionate and competent legal counsel in a direct and practical approach.

I am a multifaceted lawyer, experienced in corporate law, nonprofits, private equity, real estate, financial services, taxation, trust and estate planning, and philanthropy. I am a strategic thinker and cross-functional collaborator who understands the importance of balancing revenue needs with business-minded legal counsel. I am skilled and experienced in preparing and reviewing SaaS agreements, service and vendor agreements, confidentiality, NDAs, data privacy, IP, licensing, real estate transactions, and partnership agreements.

Experienced business attorney in the field of real estate, construction, and design.

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Contract to lease land from a church.

I’m planning on leasing land from a church. Putting a gym on the property. And leasing it back to the school.

Ok; first step is that you will need a leasing contract with the church. Ask them to prepare one for you so you would just need an attorney to review the agreement and that should cost less than if you had to be the party to pay a lawyer to draft it from scratch. You need to ensure that the purpose of the lease is clearly stated - that you plan to put a gym on the land so that there are no issues if the church leadership changes. Step 2 - you will need a lease agreement with the school that your leasing it do (hopefully one that is similar to the original one your received from the church). Again, please ensure that all the terms that you discuss and agree to are in the document; including length of time, price and how to resolve disputes if you have one. I hope this is helpful. If you would like me to assist you further, you can contact me on Contracts Counsel and we can discuss a fee for my services. Regards, Donya Ramsay (Gordon)

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What is an assignment by way of security?

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Bulletins | January 30, 2018

Assignment by way of security – beware of giving away more than you bargained for.

Construction

Assignment by way of security is a concept that comes up on many construction projects; typically as a condition of providing finance a funder will require an assignment by way of security of key construction documents, including building contracts and appointments, with the intention that if the borrower defaults on the loan, the assignment will be perfected and the funder will be entitled to enforce its rights under the constructions documents. How and when exactly such assignment takes place and the interplay with an employer’s rights under its contracts on a project was brought into focus in last year’s case of Mailbox (Birmingham) Limited v Galliford Try Construction Limited ([2017] EWHC 67 (TCC)).

Mailbox (Birmingham) Limited (“Mailbox”), the claimant special purpose vehicle set up to develop the Mailbox in Birmingham (“the Property”), a high-end mixed used development, boasting a Harvey Nichols and the base for BBC Birmingham, engaged Galliford Try Construction Limited (“Galliford”) for refurbishment works at the Property under a building contract dated 23 December 2013. A dispute arose between the parties regarding responsibility for delay, the final account, liquidated damages and Mailbox’s termination which was referred to adjudication, where Galliford were ordered to pay Mailbox £2,477,152.86 plus 75% of the adjudicator’s costs. Galliford did not pay the sums ordered, so Mailbox sought enforcement of the adjudicator’s decision in the High Court.

Did Mailbox have a right to bring an adjudication?

Galliford’s primary defence to the enforcement was that Mailbox had no right to bring the claim, as it had assigned the benefit of the building contract with Galliford to Aareal Bank AG Wiesbaden (“Aareal”) in accordance with the requirements of a debenture dated 10 May 2011. Mailbox raised three defences:

• The building contract was not in existence at the time of the assignment referred to in the debenture. Therefore there could be no assignment;
• Alternatively, any assignment was by way of charge rather than a legal assignment; or
• The contract had been re-assigned from Aareal to Mailbox before Mailbox commenced adjudication proceedings.

Mailbox failed on the first two defences, but won on the third so was able to enforce the adjudicator’s award. However, it was the analysis of the first and second defences and Mrs Justice O’Farrell’s review of the requirements for legal assignment under Section 138 of the Law of Property Act 1925 that are of particular note.

It was held that the wording of the debenture covered future contracts, including the building contract in question. The wording “each chargor with full title guarantee assigns absolutely by way of security in favour of the security trustee” amounted to a full legal assignment rather than an assignment by way of charge and/or a conditional assignment. Further, there was a requirement for notice of the assignment to be served and specific reference to rights being re-assigned, both of which were more akin to an absolute assignment. Express notice was given to Galliford, again consistent with an absolute assignment.  Thankfully for Mailbox, on the day it commenced the adjudication, Aareal had re-assigned the rights under the building contract to Mailbox. If it had not done so, or done so after the adjudication had been commenced, Mailbox would not have been entitled to commence the adjudication.

Practical Tips

When obtaining finance for a project it is crucial to understand what the funder really requires in relation to security over construction documents. If all rights are assigned, the employer no longer has the ability to enforce such rights and may have given away more than he bargained for.

It may be that the use of collateral warranties or third party rights together with a charge will suffice but if not (which is unfortunately still the common position), it is important that any such rights are re-assigned before the employer commences an adjudication or any other proceedings.