§77iii Effective Time of Qualification

Summary

An indenture (the contract for a security) is treated as officially qualified when the security’s registration becomes effective or when the application to qualify the indenture becomes effective under section 77ggg. After that, the SEC cannot issue a stop order to suspend the related registration or the indenture’s qualification except for the specific reasons in section 77h or if the issuer failed to file the application required by section 77eee(b)(2). New rules made later do not change the qualification, form, or meaning of an indenture that was already qualified, except as allowed by subsection (a) of section 77nnn. A trustee of a qualified indenture cannot be held liable just because the indenture fails to meet the subchapter or its rules. The SEC also does not have authority to investigate or enforce whether the indenture’s terms are being followed.