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Page:United States Statutes at Large Volume 89.djvu/159

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. 99

"(22)(A) The term 'securities information processor' means any person engaged in the business of (i) collecting, processing, or preparing for distribution or publication, or assisting, participating in, or coordinating the distribution or publication of, information with respect to transactions in or quotations for any security (other than an exempted security) or (ii) distributing or publishing (whether by means of a ticker tape, a communications network, a terminal display device, or otherwise) on a current and continuing basis, information with respect to such transactions or quotations. The term 'securities information processor' does not include any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, any self-regulatory organization, any bank, broker, dealer, building and loan, savings and loan, or homestead association, or cooperative bank, if such bank, broker, dealer, association, or cooperative bank would be deemed to be a securities information processor solely by reason of functions performed by such institutions as part of customary banking, brokerage, dealing, association, or cooperative bank activities, or any common carrier, as defined in section 3(h) of the Communications Act of 1934, subject to the jurisdiction of the 47 USC 153. Federal Communications Commission or a State commission, as defined in section 3(t) of that Act, unless the Commission determines that such carrier is engaged in the business of collecting, processing, or preparing for distribution or publication, information Math respect to transactions in or quotations for any security. "(B) The term 'exclusive processor' means any securities information processor or self-regulatory organization which, directly or indirectly, engages on an exclusive basis on behalf of any national securities exchange or registered securities association or any national securities exchange or registered securities association which engages on an exclusive basis on its own behalf in collecting, processing, or preparing for distribution or publication any information with respect to (i) transactions or quotations on or effected or made by means of any facility of such exchange or (ii) quotations distributed or published by means of any electronic system operated or controlled by such association. "(23)(A) The term 'clearing agency' means any person who acts as an intermediary in making payments or deliveries or both in connection with transactions in securities or who provides facilities for comparison of data respecting the terms of settlement of securities transactions, to reduce the number of settlements of securities transactions, or for the allocation of securities settlement responsibilities. Such term also means any person, such as a securities depository, who (i) acts as a custodian of securities in connection with a system for the central handling of securities whereby all securities of a particular class or series of any issuer deposited within the system are treated as fungible and may be transferred, loaned, or pledged by bookkeeping entry without physical delivery of securities certificates, or (ii) otherwise permits or facilitates the settlement of securities transactions or the hypothecation or lending of securities without physical delivery of securities certificates. "(B) The term 'clearing agency' does not include (i) any Federal Reserve bank. Federal home loan bank, or Federal land bank; (ii) any national securities exchange or registered securities association solely by reason of its providing facilities for comparison of data respecting the terms of settlement of securities transactions effected on such exchange or by means of any electronic system operated or controlled by such association; (iii) any bank, broker, dealer, building and loan, savings and loan, or homestead association, or cooperative bank if such bank, broker, dealer, association, or cooperative bank

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Page:United States Statutes at Large Volume 89.djvu/160

 39 STAT. 100

Post, pp. 146, 1Post, p. 131.

PUBLIC LAW 94-29—JUNE 4, 1975 would be deemed to be a clearing agency solely by reason of functions performed by such institution as part of customary banking, brokerage, dealing, association, or cooperative banking activities, or solely by reason of acting on behalf of a clearing agency or a participant therein in connection with the furnishing by the clearing agency of services to its participants or the use of services of the clearing agency by its participants, unless the Commission, by rule, otherwise provides as necessary or appropriate to assure the prompt and accurate clearance and settlement of securities transactions or to prevent evasion of this title; (iv) any life insurance company, its registered separate accounts, or a subsidiary of such insurance company solely by reason of functions commonly performed by such entities in connection with variable annuity contracts or variable life policies issued by such insurance company or its separate accounts; (v) any registered openend investment company or unit investment trust solely by reason of functions commonly performed by it in connection with shares in such registered open-end investment company or unit investment trust, or (vi) any person solely by reason of its performing functions described in paragraph 25(E) of this subsection, "(24) The term 'participant' when used with respect to a clearing agency means any person who uses a clearing agency to clear or settle securities transactions or to transfer, pledge, lend, or hypothecate securities. Such term does not include a person whose only use of a clearing agency is (A) through another person who is a participant or (B) as a pledgee of securities. "(25) The term 'transfer agent' means any person who engages on behalf of an issuer of securities or on behalf of itself as an issuer of securities in (A) countersigning such securities upon issuance; (B) monitoring the issuance of such securities with a view to preventing unauthorized issuance, a function commonly performed by a person called a registrar; (C) registering the transfer of such securities; (D) exchanging or converting such securities; or (E) transferring record ownership of securities by bookkeeping entry without physical issuance of securities certificates. The term 'transfer ajjent' does not include any insurance company or separate account which performs such functions solely with respect to variable annuity contracts or variable life policies which it issues or any registered clearing agency which performs such functions solely with respect to options contract which it issues. "(26) The term 'self-regulatory organization' means any national securities exchange, registered securities association, or registered clearing agency, or (solely for purposes of sections 19(b), 19(c), and 23(b) of this title) the Municipal Securities Rulemaking Board established by section 15B of this title. "(27) The term 'rules of an exchange', 'rules of an association', or 'rules of a clearing agency' means the constitution, articles of incorporation, bylaws, and rules, or instruments corresponding to the foregoing, of an exchange, association of brokers and dealers, or clearing agency, respectively, and such of the stated policies, practices, and interpretations of such exchange, association, or clearing agency as the Commission, by rule, may determine to be necessary or appropriate in the public interest or for the protection of investors to be deemed to be rules of such exchange, association, or clearing agency. "(28) The term 'rules of a self-regulatory orfjanization' means the rules of an exchange which is a national securities exchange, the rules of an association of brokers and dealers which is a registered securities association, the rules of a clearing agency which is a registered clearing agency, or the rules of the Municipal Securities Rulemaking Board.

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Page:United States Statutes at Large Volume 89.djvu/161

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. 101

"(29) The term 'municipal securities' means securities which are direct obligations of, or obligations guaranteed as to principal or interest by, a State or any political subdivision thereof, or any agency or instrumentality of a State or any political subdivision thereof, or any municipal corporate instrumentality of one or more States, or any security which is an industrial development bond (as defined in section 103 (c)(2) of the Internal Revenue Code of 1954) the interest on which 26 USC 103. is excludable from gross income under section 103(a)(1) of such Code if, by reason of the application of paragraph (4) or (6) of section 103 (c) of such Code (determined as if paragraphs (4)(A), (5), and (7) were not included in such section 103(c)), paragraph (1) of such section 103(c) does not apply to such security. "(30) The term 'municipal securities dealer' means any person (including a separately identifiable department or division of a bank) engaged in the business of buying and selling municipal securities for his own account, through a broker or otherwise, but does not include— "(A) any person insofar as he buys or sells such securities for his own account, either individually or in some fiduciary capacity, but not as a part of a regular business; or "(B) a bank, unless the bank is engaged in the business of buying and selling municipal securities for its own account other than in a fiduciary capacity, through a broker or otherwise: Provided, however, That if the bank is engaged in such business through a separately identifiable department or division (as defined by the Municipal Securities Rulemaking Board in accordance with section 15B(b)(2)(H) of this title), the department or Post, p. 131. division and not the bank itself shall be deemed to be the mimicipal securities dealer. " (31) The term 'municipal securities broker' means a broker engaged in the business of effecting transactions in municipal securities for the account of others. " (32) The term 'person associated with a municipal securities dealer' when used with respect to a municipal securities dealer which is a bank or a division or department of a bank means any person directly engaged in the management, direction, supervision, or performance of any of the municipal securities dealer's activities with respect to municipal securities, and any person directly or indirectly controlling such activities or controlled by the municipal securities dealer in connection with such activities. " (33) The term 'municipal securities investment portfolio' means all municipal securities held for investment and not for sale as part of a regular business by a municipal securities dealer or by a person, directly or indirectly, controlling, controlled by, or under common control with a municipal securities dealer. " (34) The term 'appropriate regulatory agency' means— "(A) When used with respect to a municipal securities dealer: "(i) the Comptroller of the Currency, in the case of a national bank or a bank operating under the Code of Law for the District of Columbia, or a subsidiary or a department or division of any such bank; "(ii) the Board of Governors of the Federal Reserve System, in the case of a State member bank of the Federal Reserve System, a subsidiary or a department or division thereof, a bank holding company, a subsidiary of a bank holding company which is a bank other than a bank specified in clause (i) or (iii) of this subparagraph, or a subsidiary or a department or division of such subsidiary; "(iii) the Federal Deposit Insurance Corporation, in the case of a bank insured by the Federal Deposit Insurance Cor-

57-194 O - 77 - 11

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Page:United States Statutes at Large Volume 89.djvu/162

 89 STAT. 102

12 USC 1811 °°*®-

PUBLIC LAW 94-29—JUNE 4, 1975 poration (other than a member of the Federal Reserve System), or a subsidiary or department or division thereof; and "(iv) the Commission in the case of all other municipal securities dealers. "(B) When used with respect to a clearing agency or transfer agent: "(i) the Comptroller of the Currency, in the case of a national bank or a bank operating under the Code of Law for the District of Columbia, or a subsidiary of any such bank; "(ii) the Board of Governors of the Federal Reserve System, in the case of a State member bank of the Federal Reserve System, a subsidiary thereof, a bank holding company, or a subsidiary of a bank holding company which is a bank other than a bank specified in clause (i) or (iii) of this subparagraph; "(iii) the Federal Deposit Insurance Corporation, in the case of a bank insured by the Federal Deposit Insurance Corporation (other than a member of the Federal Reserve System), or a subsidiary thereof; and " (iv) the Commission in the case of all other clearing agencies and transfer agents. " (C) When used with respect to a participant or applicant to become a participant in a clearing agency or a person requesting or having access to ser\dces offered by a clearing agency: "(i) the Comptroller of the Currency, in the case of a national bank or a bank operating under the Code of Law for the District of Columbia when the appropriate regulatory agency for such clearing agency is not the Commission; "(ii) the Board of Governors of the Federal Reserve System in the case of a state member bank of the Federal Reserve System, a bank holding company, or a subsidiary of a bank holding company, or a subsidiary of a bank holding company which is a bank other than a bank specified in clause (i) or (iii) of this subparagraph when the appropriate regulatory agency for such clearing agency is not the Commission; "(iii) the Federal Deposit Insurance Corporation, in the case of a bank insured by the Federal Deposit Insurance Corporation (other than a member of the Federal Reserve System) when the appropriate regulatory agency for such clearing agency is not the Commission; and " (iv) the O)mmission in all other cases. "(D) When used with respect to an institutional investment manager which is a bank the deposits of which are insured in accordance with the Federal Deposit Insurance Act: "(i) the Comptroller of the Currency, in the case of a national bank or a bank operating under the Code of Law for the District of Columbia; "(ii) the Board of Governors of the Federal Reserve System, in the case of any other member bank of the Federal Reserve System; and "(iii) the Federal Deposit Insurance Corporation, in the case oi any other insured bank, " (E) When used with respect to a national securities exchange or registered securities association, member thereof, person associated with a member thereof, applicant to become a member thereof or to become associated with a member thereof, or person requesting or having access to services offered by such exchange or association or member thereof, or the Municipal Securities Rulemaking Board, the Commission.

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Page:United States Statutes at Large Volume 89.djvu/163

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. 103

" (F) When used with respect to a person exercising investment discretion with respect to an account; "(i) the Comptroller of the Currency, in the case of a national bank or a bank operating under the Code of Law for the District of Columbia; " (ii) The Board of Governors of the Federal Keserve System in the case of any other member bank of the Federal Reserve System; "(iii) the Federal Deposit Insurance Corporation, in the case of any other bank the deposits of which are insured in accordance wuth the P'ederal Deposit Insurance Act; and "(iv) the Commission in the case of all other such persons. As used in this paragraph, the terms 'bank holding company' and 'subsidiary of a bank holding company' have the meanings given them in section 2 of the Bank Holding Company Act of 1956. 12 USC 1841. "(35) A person exercises 'investment discretion' with respect to an account if, directly or indirectly, such person (A) is authorized to determine what securities or other property shall be purchased or sold by or for the account, (B) makes decisions as to what securities or other property shall be purchased or sold by or for the account even though some other person may have responsibility for such investment decisions, or (C) otherwise exercises such influence with respect to the purchase and sale of securities or other property by or for the account as the Commission, by rule, determines, in the public interest or for the protection of investors, should be subject to the operation of the provisions of this title and the rules and regulations thereunder. "(36) A class of persons or markets is subject to 'equal regulation' if no member of the class has a competitive advantage over any other member thereof resulting from a disparity in their regulation under this title which the Commission determines is unfair and not necessary or appropriate in furtherance of the purposes of this title. "(37) The term 'records' means accounts, correspondence, memorandums, tapes, discs, papers, books, and other documents or transcribed information of any type, whether expressed in ordinary or machine language. "(38) The term 'market maker' means any specialist permitted to act as a dealer, any dealer acting in the capacity of block positioner, and any dealer who, with respect to a security, holds himself out (by entering quotations in an inter-dealer communications system or otherwise) as being willing to buy and sell such security for his own account on a regular or continuous basis. "(39) A person is subject to a 'statutory disqualification' with respect to membership or participation in, or association with a member of, a self-regulatory organization, if such person— "(A) has been and is expelled or suspended from membership or participation in, or barred or suspended from being associated with a member of, any self-regulatory organization; "(B) is subject to an order of the Commission denying, suspending for a period not exceeding twelve months, revoking his registration as a broker, dealer, or municipal securities dealer, or barring his being associated with a broker, dealer, or municipal securities dealer; "(C) by his conduct while associated with a broker, dealer, or municipal securities dealer, has been found to be a cause of any effective suspension, expulsion, or order of the character described in subparagraph (A) or (B) of this paragraph, and in entering such a suspension, expulsion, or order, the Commission or any such self-regulatory organization shall have jurisdiction to find whether or not any person was a cause thereof;

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Page:United States Statutes at Large Volume 89.djvu/164

 89 STAT. 104

Post, p. 121.

Rules and regulations.

PUBLIC LAW 9 4 - 2 9 — J U N E 4, 1975 " (D) has associated with him any person who is known, or in the exercise of reasonable care should be known, to him to be a person described by subparagraph (A), (B), or (C) of this paragraph; or " (E) has committed or omitted any act enumerated in subparagraph (D) or (E) of paragraph (4) of section 15(b) of this title, has been convicted of any offense specified in subparagraph (B) of such paragraph (4) within ten years of the date of the filing of an application for membership or participation in, or to become associated with a member of, such self-regulatory organization, is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4), has willfully made or caused to be made in any application for membership or participation in, or to become associated with a member of, a self-regulatory organization, report required to be filed with a self-regulatory organization, or proceeding before a self-regulatory organization, any statement which was at the time, and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any such application, report, or proceeding any material fact which is required to be stated therein.". (7) Subsection (b) thereof is amended to read as follows: " (b) The Commission and the B o a r d of Governors of the Federal Reserve System, as to matters within their respective jurisdictions, shall have power by rules and regulations to define technical, trade, accounting, and other terms used in this title, consistently with the provisions and purposes of this title.". (8) The section is further amended by adding at the end thereof the following new subsection: " (d) No issuer of municipal securities or officer or employee thereof acting in the course of his official duties as such shall be deemed to be a 'broker', 'dealer', or 'municipal securities dealer' solely by reason of buying, selling, or effecting transactions in the issuer's securities.". SEC. 4. Section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended to read as follows: " N A T I O N A L SECURITIES EXCHANGES

Registration.

Post, p. 146.

Post, pp. 137, 146.

" SEC. 6. (a) A n exchange may be registered as a national securities exchange under the terms and conditions hereinafter provided in this section and in accordance with the provisions of section 19(a) of this title, by filing with the Commission an application for registration in such form as the Commission, by rule, may prescribe containing the rules of the exchange and such other information and documents as the Commission, by rule, may prescribe as necessary or a p p r o p r i a t e in the public interest or for the protection of investors. " (b) A n exchange shall not be registered as a national securities exchange unless the Commission determines that— " (1) Such exchange is so organized and has the capacity to be able to carry out the purposes of this title and to comply, and (subject to any rule or order of the Commission pursuant to section 17(d) or 19(g)(2) of this title) to enforce compliance by its members and persons associated with its members, with the provisions of this title, the rules and regulations thereunder, and the rules of the exchange. " (2) Subject to the provisions of subsection (c) of this section, the rules of the exchange provide that any registered broker or dealer or natural person associated with a registered broker or dealer may become a Inember of such exchange and any person may become associated with a member thereof.

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Page:United States Statutes at Large Volume 89.djvu/165

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. 105

" (3) The rules of the exchange assure a fair representation of its members in the selection of its directors and administration of its affairs and provide that one or more directors shall be representative of issuers and investors and not be associated with a member of the exchange, broker, or dealer. " (4) The rules of the exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. " (5) The rules of the exchange are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers, or to regulate by virtue of any authority conferred by this title matters not related to the purposes of this title or the administration of the exchange. " (6) The rules of the exchange provide that (subject to any rule or order of the Commission pursuant to section 17(d) or 19 (g)(2) of this title) its members and persons associated with its Post, pp. 137, members shall be appropriately disciplined for violation of the 146. provisions of this title, the rules or regulations thereunder, or the rules of the exchange, by expulsion, suspension, limitation of activities, functions, and operations, fine, censure, being suspended or barred from being associated with a member-, or any other fitting sanction. " (7) The rules of the exchange are in accordance with the provisions of subsection (d) of this section, and in general, provide a fair procedure for the disciplining of members and persons associated with members, the denial of membership to any person seeking membership therein, the b a r r i n g of any person from becoming associated w4th a member thereof, and the prohibition or limitation by the exchange of any person with respect to access to services offered by the exchange or a member thereof. " (8) The rules of the exchange do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of this title. " (c)(1) A national securities exchange shall deny membership to Membership, (A) any person, other than a n a t u r a l person, which is not a registered denial. broker or dealer or (B) any natural person who is not, or is not associated with, a registered broker or dealer. " (2) A national securities exchange may, and in cases in which the Commission, by order, directs as necessary or appropriate in the public interest or for the protection shall, deny membership to any registered broker or dealer or natural person associated with a registered broker or dealer, and bar from becoming associated with a member any person, who is subject to a statutory disqualification. A national Notice. securities exchange shall file notice with the Commission not less than t h i r t y days prior to admitting any person to membership or permitting any person to become associated with a member, if the exchange knew, or in the exercise of reasonable care should have known, that such person was subject to a statutory disqualification. The notice shall be in such form and contain such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors.

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Page:United States Statutes at Large Volume 89.djvu/166

 89 STAT. 106

Membership, limitation.

Post, p. 146.

Disciplinary actions.

PUBLIC LAW 9 4 - 2 9 — J U N E 4, 1975 " (3)(A) A national securities exchange may deny membership to, or condition the membership of, a registered broker or dealer if (i) snch broker or dealer does not meet such standards of financial responsibility or operational capability or such broker or dealer or any natural person association with such broker or dealer does not meet such standards of training, experience, and competence as are prescribed by the rules of the exchange or (ii) such broker or dealer or person associated with such broker or dealer has engaged and there is a reasonable likelihood he may again engage in acts or practices inconsistent with just and equitable principles of trade. A national securities exchange may examine and verify the qualifications of an applicant to become a member and the n a t u r a l persons associated with such an applicant in accordance with procedures established by the rules of the exchange. " (B) A national securities exchange may bar a n a t u r a l person from becoming a member or associated with a member, or condition the membership of a natural person or association of a natural person with a member, if such n a t u r a l person (i) does not meet such standards of training, experience, and competence as are prescribed by the rules of the exchange or (ii) has engaged and there is a reasonable likelihood he may again engage in acts or practices inconsistent with just and equitable principles of trade. A national securities exchange may examine and verify the qualifications of an applicant to become a person associated wnth a member in accordance with procedures established by the rules of the exchange and require any person associated with a member, or any class of such persons, to be registered with the exchange in accordance with procedures so established. " (C) A national securities exchange may bar any person from becoming associated wnth a member if such person does not agree (i) to supply the exchange with such information with respect to its relationship and dealings with the member as may be specified in the rules of the exchange and (ii) to permit the examination of its books and records to verify the accuracy of any information so supplied. "('4) A national securities exchange may (A) limit the number of members of the exchange and (B) the number of members and designated representatives of members permitted to effect transactions on the floor of the exchange without the services of another person acting as broker: Provided, however, That no national securities exchange shall have the authority to decrease the number of memberships in such exchange, or the number of members and designated representatives of members permitted to effect transactions on the floor of such exchange without the services of another person acting as broker, below such number in effect on May 1, 1975, or the date such exchange was registered with the Commission, whichever is l a t e r: And provided further, That the Commission, in accordance with the provisions of section 19(c) of this title, may amend the rules of any national securities exchange to increase (but not to decrease) or to remove any limitation on the number of memberships in such exchange or the number of members or designated representatives of members permitted to effect transactions on the floor of the exchange without the services of another person acting as broker, if the Commission finds that such limitation imposes a burden on competition not necessary or a p p r o p r i a t e in furtherance of the purposes of this title. " (d)(1) I n any proceeding by a national securities exchange to determine whether a member or person associated with a member should be disciplined (other than a summary proceeding pursuant to paragraph (3) of this subsection), the exchange shall bring specific charges, notify such member or person of, and give him an opportunity to defend against, such charges, and keep a record. A determination

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Page:United States Statutes at Large Volume 89.djvu/167

 PUBLIC LAW 94-29—JUNE 4, 1975 by the exchange to impose a disciplinary sanction shall be supported by a statement setting forth— "(A) any act or practice in which such member or person associated with a member has been found to have engaged, or which such member or person has been found to have omitted; "(B) the specific provision of this title, the rules or regulations thereunder, or the rules of the excl.ange which any such act or practice, or omission to act, is deemed to violate; and "(C) the sanction imposed and the reasons therefor. "(2) In any proceeding by a national securities exchange to determine whether a person shall be denied membership, barred from becoming associated with a member, or prohibited or limited wnth respect to access to services offered by the exchange or a member thereof (other than a summary proceeding pursuant to paragraph (3) of this subsection), the exchange shall notify such person of, and give him an opportunity to be heard upon, the specific grounds for denial, bar, or prohibition or limitation under consideration and keep a record. A determination by the exchange to deny membership, bar a person from becoming associated with a member, or prohibit or limit a person with respect to access to services offered by the exchange or a member thereof shall be supported by a statement setting forth the specific grounds on which the denial, bar, or prohibition or limitation is based. "(3) A national securities exchange may summarily (A) suspend a member or person associated with a member who has been and is expelled or suspended from any self-regulatory organization or barred or suspended from being associated with a member of any self-regulatory organization, (B) suspend a member who is in such financial or operating difficulty that the exchange deteiinines and so notifies the Commission that the member cannot be permitted to continue to do business as a member with safety to investors, creditors, other members, or the exchange, or (C) limit or prohibit any person with respect to access to services offered by the exchange if subparagraph (A) or (B) of this paragraph is applicable to such person or, in the case of a person who is not a member, if the exchange determines that such person does not meet the qualification requirements or other prerequisites for such access and such person cannot be permitted to continue to have such access w'ith safety to investors, creditors, members, or the exchange. Any person aggrieved by any such summary action shall be promptly afforded an opportunity for a hearing by the exchange in accordance with the provisions of paragraph (1) or (2) of this subsection. The Commission, by order, may stay any such summary action on its own motion or upon application by any person aggrieved thereby, if the Commission determines summarily or after notice and opportunity for hearing (which hearing may consist solely of the submission of affidavits or presentation of oral arguments) that such stay is consistent with the public interest and the protection of investors. "(e)(1) On and after the date of enactment of the Securities Acts Amendments of 1975, no national securities exchange may impose any schedule or fix rates of commissions, allowances, discounts, or other fees to be charged by its members: Provided, however. That until May 1, 1976, the preceding provisions of this paragraph shall not prohibit any such exchange from imposing or fixing any schedule of commissions, allowances, discounts, or other fees to be charged by its members for acting as broker on the floor of the exchange or as odd-lot dealer: And provided further. That the Commission, in accordance with the provisions of section 19(b) of this title as modified by the provisions of paragraph (4) of this section, may— "(A) permit a national securities exchange, by rule, to impose a reasonable schedule or fix reasonable rates of commissions.

89 STAT. 107

Notice and hearing,

Summary suspension,

Hearing, Stay of action,

Rates and fees.

Post, p. 146.

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Page:United States Statutes at Large Volume 89.djvu/168

 8 9 STAT. 108

Post, p. 146.

Information, filing with Speaker of the House and President of the Senate. Oral presentations.

Rules and rulings.

Class representative.

PUBLIC LAW 9 4 - 2 9 — J U N E 4, 1975 allowances, discounts, or other fees to be charged by its members for effecting transactions on such exchange prior to November 1, 1976, if the Commission finds that such schedule or fixed rates of commissions, allowances, discounts, or other fees are in the public interest; and " (B) permit a national securities exchange, by rule, to impose a schedule or fix rates of commissions, allowances, discounts, or other fees to be charged by its members for effecting transactions on such exchange after November 1, 1976, if the Commission finds that such schedule or fixed rates of commissions, allowances, discounts, or other fees (i) are reasonable in relation to the costs of providing the service for which such fees are charged (and the Commission publishes the standards employed in adjudging reasonableness) and (ii) do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of this title, taking into consideration the competitive effects of permitting such schedule or fixed rates weighed against the competitive effects of other lawful actions which the Commission is authorized to take under this title. " (2) Notwithstanding the provisions of section 19(c) of this title, the Commission, by rule, may abrogate any exchange rule which imposes a schedule or fixes rates of commissions, allowances, discotmts, or other fees, if the Commission determines that such schedule or fixed rates are no longer reasonable, in the public interest, or necessary to accomplish the purposes of this title. " (3) Until December 31, 1976, the Commission, on a regular basis, shall file with the Speaker of the House and the President of the Senate information concerning the effect on the public interest, protection of investors, and maintenance of fair and orderly markets of the absence of any schedule or fixed rates of commissions, allowances, discounts, or other fees to be charged by members of any national securities exchange for effecting transactions on such exchange. " (4)(A) Before approving or disapproving any proposed rule change submitted by a national securities exchange which would impose a schedule or fix rates of commissions, allowances, discounts, or other fees to be charged by its members for effecting transactions on such exchange, the Commission shall afford interested persons (i) an opportunity for oral presentation of data, views, and arguments and (ii) with respect to any such rule concerning transactions effected after November 1, 1976, if the Commission determines there are disputed issues of material fact, to present such rebuttal submissions and to conduct (or have conducted under subparagraph (B) of this paragraph) such cross-examination as the Commission determines to be appropriate and required for full disclosure and proper resolution of such disputed issues of material fact. " (B) The Commission shall prescribe rules and make rulings concerning any proceeding in accordance with subparagraph (A) of this paragraph designed to avoid unnecessary costs or delay. Such rules or rulings may (i) impose reasonable time limits on each interested person's oral presentations, and (ii) require any cross-examination to which a person may be entitled under subparagraph (A) of this paragraph to be conducted by the Commission on behalf of that person in such manner as the Commission determines to be appropriate and required for full disclosure and proper resolution of disputed issues of material fact. " (C)(i) I f any class of persons, the members of which are entitled to conduct (or have conducted) cross-examination under subparagraph s (A) and (B) of this paragraph and which have, in the view of the Commission, the same or similar interests in the proceeding,

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Page:United States Statutes at Large Volume 89.djvu/169

 PUBLIC LAW 94-29—JUNE 4, 1975 cannot agree upon a single representative of such interests for purposes of cross-examination, the Commission may make rules and rulings specifying the manner in which such interests shall be represented and such cross-examination conducted. "(ii) No member of any class of persons with respect to which the Commission has specified the manner in which its interests shall be represented pursuant to clause (i) of this subparagraph shall be denied, pursuant to such clause (i), the opportunity to conduct (or have conducted) cross-examination as to issues affecting his particular interests if he satisfies the Commission that he has made a reasonable and good faith effort to reach agreement upon group representation and there are substantial and relevant issues which would not be presented adequately by group representation. "(D) A transcript shall be kept of any oral presentation and cross-examination. " (E) In addition to the bases specified in subsection 25(a), a reviewing Court may set aside an order of the Commission under section 19(b) approving an exchange rule imposing a schedule or fixes lates of commissions, allowances, discounts, or other fees, if the Court finds— "(1) a Commission determination under paragraph (4)(A) that an interested person is not entitled to conduct cross-examination or make rebuttal submissions, or "(2) a Commission rule or ruling under paragraph (4)(B) limiting the petitioner's cross-examination or rebuttal submissions, has precluded full disclosure and proper resolution of disputed issues of material fact which were necessary for fair determination by the Commission. "(f) The Commission, by rule or order, as it deems necessary or appropriate in the public interest and for the protection of investors, to maintain fair and orderly markets, or to assure equal regulation, may require— "(1) any person not a member or a designated representative of a member of a national securities exchange effecting transactions on such exchange without the services of another person acting as a broker, or "(2) any broker or dealer not a member of a national securities exchange effecting transactions on such exchange on a regular basis, to comply with such rules of such exchange as the Commission may specify.". SEC. 5. Section 8 of the Securities Exchange Act of 1934 (15 U.S.C. 78h) is amended as follows: (1) The first sentence thereof is amended by striking out the phrase "any member of a national securities exchange, or any broker or dealer who transacts a business in securities through the medium of any such member" and by inserting in lieu thereof the phrase "any registered broker or dealer, member of a national securities exchange, or broker or dealer who transacts a business in securities through the medium of any member of a national securities exchange". (2) The section is further amended by striking out subsection (b), redesignating subsections (c) and (d) thereof as subsections (b) and (c) respectively, and amending redesignated subsection (c) to read as follows: "(c) To lend or arrange for the lending of any securities carried for the account of any customer without the written consent of such customer or in contravention of such rules and regulations as the Commission shall prescribe for the protection of investors."

89 STAT. 109

Transcript. Post, p. 158. Post, p. 146.

Borrowing by members, brokers, and dealers, restrictions.

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Page:Notes and Queries - Series 2 - Volume 5.djvu/102

 NOTES AND QUERIES. f 3. NO 109., JAN. 30. '58. than those forced out by the Press, which gives them the roughness of the husk and the stone ; so are those Doc- trines best and wholesomest which flow from a gentle pressure of the Scripture, and are not wrung into Contro- versies and Common -place. And this Treatise we set down as wanting, under the title of THE FIEST FLOW- INGS OF THE SciurruuEs." B. ix.

It is much to be regretted that the same age, the same plan, the same hands, which gave us our noble version of the Bible, did not also furnish us with a Commentary. There is not a book de- serving that name in the English language ; nor is this age likely to produce one. I think the experience of all thoughtful well-read men will bear me out when I say that professed Commen- taries and Bible Dictionaries, &c. are most un- satisfactory ; while wealth untold lies scattered Lore and there, often in books where we should least expect to find it. Professed works invari- ably leave you in the lurch when you most want help, and deluge you with useless details and common-place moralising. Thus we have long dissertations to prove that the Satyr was a goat, and that Nazareth was in this place and not in the other place ; if you come to such a word as Olives (say, the Mount of Olives), there is grand scope for dissertations on olives in general, on olive oil, the process for making it and all other oils, and so on. Few things are more abused and less understood than Notes and Comments. A good book given up to the tender mercies of an uncongenial and incompetent annotator is like a palace let to a pedlar. I shall pass over the case of Shakspeare, though few have better cause to cry, Save me from my friends ! and give as an instance an attractive-looking edition of Thom- son's Seasons, annotated by a certain Dr. Thomp- son, which I once purchased : in this extraordinary book, every peg that ingenuity could spy was laid bold of to hang thereon the most incongruous notes : thus the poet in an evil hour casually men- tions " October ale, and accordingly his Seasons are decked with a note several pages long on beer, ale, and porter, and the various processes by which they are made ! Truly, not merely a Note, but a most instructive Book might be written on Notes and Comments.

Though a Commentary on the Bible is scarcely to be looked for at the present day, yet a Common- place Book to. the Bible seems a feasible project. Suppose an Association for the purpose were formed, with a committee of editors, and that all students, scholars, reading and thoughtful men in general, were invited to send* in to the Associ- ation reference to such passages in books they have met with in the course of their reading, as most strikingly illustrate corresponding passages in Scripture : if the Association were happily organised, I have little doubt but that their call would be well responded to. With regard to detail, I would make these few suggestions : That the References be full, but choice. That the Notes be terse, pregnant, suggestive. That subordinate matters, such as Geography, Natural History, &c. be kept in subordination. That the great object and paramount aim be to throw light on the primary meaning of the text, and illustrate the great Truths, mental and moral, contained in the Bible. That the Symbolical, Lyrical, Mystical, and Esoteric meaning of Holy Scripture be espe- cially kept in mind and illustrated all through. That the Analogies of Holy Scripture and'its Unity in Variety be not lost sight of: also, that the trans- lation of Objective into Subjective truth, and the reproduction of the former in the latter, be carefully attended to. In short, that throughout there be a free passage and a close connection maintained between the Head and the Heart, and between God, Man, and Nature. History and Biography, judiciously uscil, would afford many valuable il- lustrations of great Scripture truths. If such an Association could be formed, a spe- cimen should be printed giving an example of each clause in the design. EIRIONNACH.

P.S. In Stewart's Catalogue of Bibles and Bib- lical Literature, London, 1849, under the title of "Commonplace Books of the Bible," at p. 193., are given the titles of seventeen works ; of these I subjoin three :

MARLOKATI (Aug.) Propheticre et Apostolica?, i. e. totius Divinaj ac Canonicas Scriptures Thesaurus in locos communes ordine alphabetico digestus. Lottd. : T. Vau- trollerius, 1574. Folio. Repr. Geiicvac, 1624. Folio."

"SCHMIDT (Seb.) Collegium Biblicum, in quo dicta S. Scripturw, juxta seriem locorum communium disposita, explicantur. Argent. 1676. 2 vols. 4to."

"BIBLICUS INDEX. Antverp. 1G71. 18mo."

HAXEY HOOD.

(2 nd S. iv. 486.)

I having been present at the throwing the hood at Haxey, Lincolnshire, several times, have pleasure in giving your querist A. E. what in- formation I gathered from time to time on the spot. The custom arose from the following cir- cumstance : Anciently the Mowbrays had great possessions in and about the Isle of Axholme, and a seat at which they principally resided, and were considered the greatest folks in that part of the I country. It so happened that on old Christmas Day a young lady (the daughter of the then Mowbray) was riding across the Meeres (an old road, at that time the principal one across the village) to the church, a gale of wind blew off her hood. Twelve farming men who were working in the field saw the occurrence, and ran to gather up the hood, and in such earnest were they that the lady took so much amusement at the scene, she forbade her own attendants joining in the pursuit. The hood being captured, returned, and


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Page:United States Statutes at Large Volume 89.djvu/170

 89 STAT. 110 Trading by members of exchanges, brokers, and dealers.

15 USC 78j.

PUBLIC LAW 94-29—JUNE 4, 1975 SEC. 6. Section 11 of the Securities Exchange Act of 1934 (15 U.S.C. 78k) is amended as follows: (1) The title thereof is amended to read: "TRADING BY MEMBERS OF EXCHANGES, BROKERS, AND DEALERS".

(2) Subsections (a) and (b) thereof are amended to read as follows: " (a)(1) I t shall be unlawful for any member of a national securities exchange to effect any transaction on such exchange for its own account, the account of an associated pereon, or an account with respect to which it or an associated person thereof exercises investment discretion: Provided, however, That this paragraph shall not make unlawful— " (A) any transaction by a dealer acting in the capacity of market m a k e r; " (B) any transaction for the account of an odd-lot dealer in a security in which he is so registered; " (C) any stabilizing transaction effected in compliance with rules under section 10(b) of this title to facilitate a distribution of a security in which the member effecting such transaction is participating; " (D) any bona fide arbitrage transaction, any bona fide hedge transaction involving a long or short position in an equity security and a long or short position in a security entitling the holder to acquire or sell such equity security, or any risk arbitrage transaction in connection with a merger, acquisition, tender offer, or similar transaction involving a recapitalization; " (E) any transaction for the account of a natural person, the estate of a n a t u r a l person, or a trust (other than an investment company) created by a natural person for himself or another natural person; " (F) any transaction to offset a transaction made in e r r o r; " (G) any other transaction for a member's own account provided that (i) such member is primarily engaged in the business of underwriting and distributing securities issued by other persons, selling securities to customers, and acting as broker, or any one or more of such activities, and whose gross income normally is derived principally from such business and related activities and (ii) such transaction is effected in compliance with rules of the Commission which, as a minimum, assure that the transaction is not inconsistent with the maintenance of fair and orderly markets and yields priority, parity, and precedence in execution to orders for the account of persons who are not members or associated with members of the exchange; and " (H) any other transaction of a kind which the Commission, by rule, determines is consistent with the purposes of this paragraph, the protection of investors, and the maintenance of fair and orderly markets. " (2) The Commission, by rule, as it deems necessary or appropriate in the public interest and for the protection of investors, to maintain fair and orderly markets, or to assure equal regulation of exchange markets and markets occurring otherwise than on an exchange, may regulate or p r o h i b i t: " (A) transactions on a national securities exchange not unlawful under paragraph (1) of this subsection effected by any member thereof for its own account (unless such member is acting in the capacity of market maker or odd-lot dealer), the account of an associated person, or an account with respect to which such member or an associated person thereof exercises investment discretion:

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Page:United States Statutes at Large Volume 89.djvu/171

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. I l l

"(B) transactions otherwise than on a national securities exchange effected by use of the mails or any means or instrumentality of interstate commerce by any member of a national securities exchange, broker, or dealer for the account of such member, broker, or dealer (unless such member, broker, or dealer is acting in the capacity of a market maker) the account of an associated person, or an account with respect to which such member, broker, or dealer or associated person thereof exercises investment discretion; and "(C) transactions on a national securities exchange effected by any broker or dealer not a member thereof for the account of such broker or dealer (unless such broker or dealer is acting in the capacity of market maker), the account of an associated person, or an account with respect to which such broker or dealer or associated person thereof exercises investment discretion. "(8) The provisions of paragraph (1) of this subsection insofar as Effective date. they apply to transactions on a national securities exchange effected by a member thereof who was a member on May 1, 1975 shall not become effective until May 1, 1978. Nothing in this paragraph shall be construed to impair or limit the authority of the Commission to regulate or prohibit such transactions prior to May 1, 1978, pursuant to paragraph (2) of this subsection. "(b) When not in contravention of such rules and regulations as Odd-lot dealers the Commission may prescribe as necessary or appropriate in the pub- and specialists. lic interest and for the protection of investors, to maintain fair and orderly markets, or to remove impediments to and perfect the mechanism of a national market system, the rules of a national securities exchange may permit (1) a member to be registered as an odd-lot dealer- and as such to buy and sell for his own account so far as may be reasonably necessary to carry on such odd-lot transactions, and (2) a member to be registered as a specialist. Under the rules and reguhitions of the Commission a specialist may be permitted to act as a brolver and dealer or limited to acting as a broker or dealer. I t shall be unlawful for a specialist or an official of the exchange to disclose infoT-mation in regard to orders placed with such specialist which is not available to all members of the exchange, to any person other than an official of the exchange, a representative of the Commission, or a specialist Avho may be acting for such specialist: Provided, however, That the Commission, by rule, may require disclosure to all members of the exchange of all orders placed with specialists, under such rules and T'egulations as the Commission may prescribe as necessary or appiopriate in the public interest or for the protection of investors. It shall also be unlawful for a specialist permitted to act as a broker and dealer to effect on the exchange as broker any transaction except upon a market or limited price order.". (8) Subsection (e) thereof is repealed. Repeal. SEC. 7. The Securities Exchange Act of 1934 is amended by inserting 15 USC 78k. after section 11 (15 U.S.C. 78k) the following new section: NATIONAL MARKET SYSTEM FOR SECURITIES; SECURITIES INFORMATION PROCESSORS

"SEC. IIA. (a)(1) The Congress finds that— 15 USC 78k-l. "(A) The securities markets are an important national asset which must be preserved and strengthened. "(B) New data processing and communications techniques create the opportunity for more efficient and effective market operations.

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Page:United States Statutes at Large Volume 89.djvu/172

 89 STAT. 112

National market system for securities, establishment.

Advisory committees, establishment. 5 USC app. I.

Studies and recommendations to Congress. Securities information processors. Exemption.

PUBLIC LAW 94-29—JUNE 4, 1975 " (C) I t is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure— " (i) economically efficient execution of securities transactions; " ( i i) fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange m a r k e t s; " ( i i i) the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities; " ( i v) the practicability of brokers executing investors' orders in the best m a r k e t; and " (v) an opportunity, consistent with the provisions of clauses (i) and (iv) of this subparagraph, for investors' orders to be executed without the participation of a dealer. " (D) The linking of all markets for qualified securities through communication and data processing facilities will foster efficiency, enhance competition, increase the information available to brokers, dealers, and investors, facilitate the offsetting of investors' orders, and contribute to best execution of such orders. " (2) The Commission is directed, therefore, having due regard for the public interest, the protection of investors, and the maintenance of fair and orderly markets, to use its authority under this title to facilitate the establishment of a national market system for securities (which may include subsystems for particular types of securities with unique t r a d i n g characteristics) in accordance with the findings and to carry out the objectives set forth in paragraph (1) of this subsection. The Commission, by rule, shall designate the securities or classes of securities qualified for t r a d i n g in the national market system from among securities other than exempted securities. (Securities or classes of securities so designated hereinafter in this section referred to as 'qualified securities'.) " (3) The Commission is authorized in furtherance of the directive m paragraph (2) of this subsection— " (A) to create one or more advisory committees pursuant to the Federal Advisory Committee Act (which shall be in addition to the National Market Advisory Board established pursuant to subsection (d) of this section) and to employ one or more outside experts; " (B) by rule or order, to authorize or require self-regulatory organizations to act jointly with respect to matters as to which they share authority under this title in planning, developing, operating, or regulating a national market system (or a subsystem thereof) or one or more facilities thereof; and " (C) to conduct studies and make recommendations to the Congress from time to time as to the possible need for modifications of the scheme of self-regulation provided for in this title so as to a d a p t it to a national market system. " (b)(1) Except as otherwise provided in this section, it shall be unlawful for any securities information processor unless registered in accordance with this subsection, directly or indirectly, to make use of the mails or any means or instrumentality of interstate commerce to perform the functions of a securities information processor. The Commission, by rule or order, upon its own motion or upon application, may conditionally or unconditionally exempt any securities information processor or class of securities information processors or security or class of securities from any provision of this section or the rules or regulations thereunder, if the Commission finds that such exemption

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Page:United States Statutes at Large Volume 89.djvu/173

 PUBLIC LAW 9 4 - 2 9 — J U N E 4, 1975

89 STAT. 113

is consistent with the public interest, the protection of investors, and the purposes of this section, including the maintenance of fair and orderly markets in securities and the removal of impediments to and perfection of the mechanism of a national market system: Provided, however, That a securities information processor not acting as the exclusive processor of any information with respect to quotations for or transactions in securities is exempt from the requirement to register in accordance with this subsection unless the Commission, by rule or order, finds that the registration of such securities information processor is necessary or appropriate in the public interest, for the protection of investors, or for the achievement of the purposes of this section. " (2) A securities information processor may be registered by filing Registration, with the Commission an application for registration in such form as the Commission, by rule, may prescribe containing the address of its principal office, or offices, the names of the securities and markets for which it is then acting and for which it proposes to act as a securities information processor, and such other information and documents as the Commission, by rule, may prescribe with regard to performance capability, standards and procedures for the collection, processing, distribution, and publication of information with respect to quotations for and transaction in securities, personnel qualifications, financial condition, and such other matters as the Commission determines to be germane to the provisions of this title and the rules and regulations thereunder, or necessary or appropriate in furtherance of the purposes of this section. " (3) The Commission shall, upon the filing of an application for Application, registration pursuant to paragraph (2) of this subsection, publish notice of filing, notice of the filing and afford interested persons an opportunity to submit written data, views, and arguments concerning such application. W i t h i n ninety days of the date of the publication of such notice (or within such longer period as to which the applicant consents) the Commission shall— " (A) by order g r a n t such registration, or " (B) institute proceedings to determine whether registration should be denied. Such proceedings shall include notice of the Hearing, grounds for denial under consideration and opportunity for hearing and shall be concluded within one hundred eighty days of the date of publication of notice of the filing of the application for registration. A t the conclusion of such proceedings the Commission, by order, shall g r a n t or deny such registration. The Commission may extend the time for the conclusion of such proceedings for u p to sixty days if it finds good cause for such extension and publishes its reasons for so finding or for such longer periods as to which the applicant consents. The Commission shall grant the registration of a securities information processor if the Commission finds that such securities information processor is so organized, and has the capacity, to be able to assure the p r o m p t, accurate, and reliable performance of its functions as a securities information processor, comply with the provisions of this title and the rules and regulations thereunder, carry out its functions in a manner consistent with the purposes of this section, and. insofar as it is acting as an exclusive processor, operate fairly and efficientlv. The Commission shall deny the registration of a securities information processor if the Commission does not make any such finding. " (4) A registered securities information processor may, upon such terms and conditions as the Commission deems necessary or aporopriate in the public interest or for the protection of investors. withdraAV from registration by filing a written notice of withdrawal with the Commission. I f the Commission finds that any registered securities

Withdrawal from registration.

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Page:United States Statutes at Large Volume 89.djvu/174

 89 STAT. 114

Access to services, notice of prohibition or limitation..

Review.

Limitation, suspension, or revocation of registration. Notice and hearing.

PUBLIC LAW 94-29—JUNE 4, 1975 information processor is no longer in existence or has ceased to do business in the capacity specified in its application for registration, the Commission, by order, shall cancel the registration. " (5)(A) I f any registered securities information processor prohibits or limits any person in respect of access to services offered, directly or indirectly, by such securities information processor, the registered securities information processor shall promptly file notice thereof with the Commission. The notice shall be in such form and contain such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. Any prohibition or limitation on access to services with respect to which a registered securities information processor is required by this paragraph to file notice shall be subject to review by the Commission on its own motion, or upon application by any person aggrieved thereby filed within thirty days after such notice has been filed with the Commission and received by such aggrieved person, or within such longer period as the Commission may determine. Application to the Commission for review, or the institution of review by the Commission on its own motion, shall not operate as a stay of such prohibition or limitation, unless the Commission otherwise orders, summarily or after notice and oppoitunity for hearing on the question of a stay (which hearing may consist solely of the submission of affidavits or presentation of oral a r g u m e n t s). The Commission shall establish for appropriate cases an expedited procedure for consideration and determination of the question of a stay. " (B) I n any proceeding to review the prohibition or limitation of any person in respect of access to services offered by a registered securities information processor, if the Commission finds, after notice and opportunity for hearing, that such prohibition or limitation is consistent with the provisions of this title and the rules and regulations thereunder and that such person has not been discriminated against unfairly, the Commission, by order, shall dismiss the proceeding. I f the Commission does not make any such finding or if it finds that such prohibition or limitation imposes any burden on competition not necessary or appropriate in furtherance of the purposes of this title, the Commission, by order, shall set aside the prohibition or limitation and require the registered securities information processor to permit such person access to services offered by the registered securities information processor. " (6) The Commission, by order, may censure or place limitations upon the activities, functions, or operations of any registered securities information processor or suspend for a period not exceeding twelve months or revoke the registration of any such processor, if the Commission finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or revocation is in the public interest, necessary or appropriate for the protection of investors or to assure the prompt, accurate, or reliable performance of the functions of such securities information processor, and that such securities information processor has violated or is unable to comply with any provision of this title or the rules or regulations thereunder. " (c)(1) No self-regulatory organization, member thereof, securities information processor, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to collect, process, distribute, publish, or prepare for distribution or publication any information with respect to quotations for or transactions in any security other than an exempted security, to assist, participate in, or coordinate the distribution or publication of such information, or to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any such security in contravention of siich rules and regulations as

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Page:United States Statutes at Large Volume 89.djvu/175

 PUBLIC LAW 9 4 - 2 9 — J U N E 4, 1975

89 STAT. 115

the Commission shall prescribe as necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this title to— " (A) prevent the use, distribution, or publication of fraudulent, deceptive, or manipulative information with respect to quotations for and transactions in such securities; " (B) assure the prompt, accurate, reliable, and fair collection, processing, distribution, and publication of information with respect to quotations for and transactions in such securities and the fairness and usefulness of the form and content of such information; " (C) assure that all securities information processors may, for purposes of distribution and publication, obtain on fair and reasonable terms such information with respect to quotations for and transactions in such securities as is collected, processed, or prepared for distribution or publication by any exclusive processor of such information acting in such capacity; " (D) assure that all exchange members, brokers, dealers, securities information processors, and, subject to such limitations as the Commission, by rule, may impose as necessary or appropriate for the protection of investors or maintenance of fair and orderly markets, all other persons may obtain on terms which are not unreasonably discriminatory such information with respect to quotations for and transactions in such securities as is published or distributed by any self-regulatory organization or securities information processor; " (E) assure that all exchange members, brokers, and dealers transmit and direct orders for the purchase or sale of qualified securities in a manner consistent with the establishment and operation of a national market system; and " (F) assure equal regulation of all markets for qualified securities and all exchange members, brokers, and dealers effecting transactions in such securities. " (2) The Commission, by rule, as it deems necessary or appropriate in the public interest or for the protection of investors, may require any person who has effected the purchase or sale of any qualified security by use of the mails or any means or instrumentality of interstate commerce to report such purchase or sale to a registered securities information processor, national securities exchange, or registered securities association and require such processor, exchange, or association to make appropriate distribution and publication of information with respect to such purchase or sale. " (3)(A) The Commission, by rule, is authorized to prohibit brokers Notice and and dealers from effecting transactions in securities registered pursu- hearing, ant to section 12(b) otherwise than on a national securities exchange, 15 USC 78Z. if the Commission finds, on the record after notice and opportunity for hearing, that — " (i) as a result of transactions in such securities effected otherwise than on a national securities exchange the fairness or orderliness of the markets for such securities has been affected in a manner contrary to the public interest or the protection of investors; " ( i i) no rule of any national securities exchange unreasonably impairs the ability of any dealer to solicit or effect transactions in such securities for his own account or unreasonably restricts competition among dealers in such securities or between dealers acting in the capacity of market makers who are specialists in such securities and such dealers who are not specialists in such securities, and

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Page:United States Statutes at Large Volume 89.djvu/176

 89 STAT. 116

Review.

Report to Congress.

Post, p. 146.

Post, p. 158.

National Market Advisory Board. Establishment; membership.

Study and recommendations to the Commission.

PUBLIC LAW 94-29—JUNE 4, 1975 (iii) the maintenance or restoration of fair and orderly markets in such, securities may not be assured through other lawful means under this title. The Commission may conditionally or unconditionally exempt any security or transaction or any class of securities or transactions from any such prohibition if the Commission deems such exemption consistent with the public interest, the protection of investors, and the maintenance of fair and orderly markets. " (B) For the purposes of subparagraph (A) of this paragraph, the ability of a dealer to solicit or effect transactions in securities for his own account shall not be deemed to be unreasonably impaired by any rule of an exchange fairly and reasonably prescribing the sequence in which orders brought to the exchange must be executed or which has been adopted to effect compliance with a rule of the Commission promulgated under this title. " (4)(A) The Commission is directed to review any and all rules of national securities exchanges which limit or condition the ability of members to effect transactions in securities otherwise than on such exchanges. On or before the ninetieth day following the day of enactment of the Securities Acts Amendments of 1975, the Commission shall (i) report to the Congress the results of its review, including the effects on competition of such rules, and (ii) commence a proceeding in accordance with the provisions of section 19(c) of this title to amend any such rule imposing a burden on competition which does not appear to the Commission to be necessary or appropriate in furtherance of the purposes of this title. The Commission shall conclude any such proceeding within ninety days of the date of publication of notice of its commencement. " (B) Review pursuant to section 25(b) of this title of any rule promulgated by the Commission in accordance with any proceeding commenced pursuant to subparagraph (A) of this paragraph shall, except as to causes the court considers of greater importance, take precedence on the docket over all other causes and shall be assigned for consideration at the earliest practicable date and expedited in every way. " (5) No national securities exchange or registered securities association may limit or condition the participation of any member in any registered clearing agency. " (d)(1) N^ot later than one hundred eighty days after the date of enactment of the Securities Acts Amendments of 1975, the Commission shall establish a National Market Advisory Board (hereinafter in this section referred to as the "Advisory B o a r d ") to be composed of fifteen members, not all of whom shall be from the same geographical area of the United States, appointed by the Commission for a term specified by the Commission of not less than two years or more than five years. The Advisory Board shall consist of persons associated with brokers and dealers (who shall be a majority) and persons not so associated who are representative of the public and, to the extent feasible, have knowledge of the securities markets of the United States. " (2) I t shall be the responsibility of the Advisory Board to formulate and furnish to the Commission its views on significant regulatory proposals made by the Commission or any self-regtdatory organization concerning the establishment, operation, and regulation of the markets for securities in the United States. " (8)(A) The Advisory Board shall study and make recommendations to the Commission as to the steps it finds appropriate to facilitate the establishment of a national market system. Tn so doing, the Advisory B o a r d shall assume the responsibilities of any advisory

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Page:United States Statutes at Large Volume 89.djvu/177

 PUBLIC LAW 94-29—JUNE 4, 1975 committee appointed to advise the Commission with respect to the national market system which is in existence at the time of the establishment of the Advisory Board. "(B) The Advisory Board shall study the possible need for modifications of the scheme of self-regulation provided for in this title so as to adapt it to a national market system, including the need for the establishment of a new self-regulatory organization (hereinafter in this section referred to as a 'National Market Regulatory Board' or 'Regulatory Board') to administer the national market system. In the event the Advisory Board determines a National Market Regulatory Board should be established, it shall make recommendations as to: "(i) the point in time at which a Regulatory Board should be established; " (ii) the composition of a Regulatory Board; " (iii) the scope of the authority of a Regulatory Board; "(iv) the relationship of a Regulatory Board to the Commission and to existing self-regulatory organizations; and " (v) the manner in which a Regulatory Board should be funded. The Advisory Board shall report to the Congress, on or before December 31, 1976, the results of such study and its recommendations, including such recommendations for legislation as it deems appropriate. "(C) In carrying out its responsibilities under this paragraph, the Advisory Board shall consult with self-regulatory organizations, brokers, dealers, securities information processors, issuers, investors, representatives of Government agencies, and other persons interested or likely to participate in the establishment, operation, or regulation of the national market system. "(e) The Commission is authorized and directed to make a study of the extent to which persons excluded from the definitions of 'broker' and 'dealer' maintain accounts on behalf of public customers for buying and selling securities registered under section 12 of this title and whether such exclusions are consistent with the protection of investors and the other purposes of this title. The Commission shall report to the Congress, on or before December 31, 1976, the results of its study together with such recommendations for legislation as it deems advisable.". SEC. 8. Section 12(f) of the Securities Exchange Act of 1934 (15 U.S.C. 781 (f)) is amended as follows: (1) Paragraphs (1) and (2) thereof are amended to read as follows: "(f)(1) Notwithstanding the foregoing provisions of this section, any national securities exchange, subject to the terms and conditions hereinafter set forth— "(A) may continue unlisted trading privileges to which a security had been admitted on such exchange prior to July 1, 1964; "(B) upon application to and approval of such application by the Commission, may extend unlisted trading privileges to any security listed and registered on any other national securities exchange; and "(C) upon application to and approval of such application by the Commission, may extend unlisted trading privileges to any security registered pursuant to section 12 of this title or which would be required to be so registered except for the exemption from registration provided in subsection (g)(2)(B) or (g)(2) (G) of that section. If an extension of unlisted trading privileges to a security is based upon its listing and registration on another national securities exchange, such privileges shall continue in effect only so long as such security remains listed and registered on a national securities exchange.

RI-IOA

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89 STAT. 117

Report to Congress. Legislative recommendations. Consultation.

Study.

15 USC 78/. Report to Congress. Legislative recommendations. Registration requirements for securities. 15 USC 78/.

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Page:A book of the Pyrenees.djvu/153

Rh terrace shaded with plane trees has its walls ablaze with snap-dragon, sprouting out of every crevice. From the chapel a stair leads down to the riverside, where is a niche containing a statue of the Virgin and Child, indicating the spot where, according to tradition, the image of N. D. de Sarrance was found.

The old monastery stands on an elevation at the southern extremity of the village. There is a little grass-grown square with a fountain in it. On one side of the square are untenanted houses, formerly guest-rooms of the convent; on the other is the monastery with its church. This latter is of no interest, as the old church, considered to be the finest in Béarn, was completely destroyed by the Calvinists. The tower is absolutely hideous. In a side chapel is a rude black Madonna, an object of superstitious devotion.

It was here that Marguerite, sister of Francis I and Queen of Navarre, composed her Heptameron. This is what she says in the introduction:—

"On the first day of September, when the baths of the Pyrenees begin to have their virtue, several persons—some of France, some of Spain, and others from elsewhere—were united at Cauterets, the marvellous waters of which have cured sick who were given up by the doctors. When the party was about to separate it was found that the floods were out so that there was no reaching Tarbes. So, having halted awhile at the Abbey of Saint Savin, the whole company met again at the monastery of Notre Dame de Sarrance, in Béarn. In order to reach Pau it was necessary that the bridge over the Gave should be repaired, and this occupied ten days. In order to relieve the tedium of our stay in the convent of monks, the company arranged a time-table for proceedings. In the morning we met in the rooms of the Lady Oysille, the eldest present. An hour was spent in reading the sacred Scriptures. Then we

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Page:United States Statutes at Large Volume 89.djvu/178

 89 STAT. 118 Notice and hearing.

Registration, denial, suspension, or revocation. Notice and hearing.

Summary suspension.

PUBLIC LAW 94-29—JUNE 4, 1975 " (2) No application pursuant to this subsection shall be approved unless the Commission finds, after notice and opportunity for hearing, that the extension of unlisted t r a d i n g privileges pursuant to such application is consistent with the maintenance of fair and orderly markets and the protection of investors. I n considering an application for the extension of unlisted t r a d i n g privileges to a security not listed and registered on a national securities exchange, the Commission shall, among other matters, take account of the public t r a d i n g activity in such security, the character of such trading, the impact of such extension on the existing markets for such securities, and the desirability of removing impediments to and the progress that has been made toward the development of a national market system and shall not g r a n t any such application if any rule of the national securities exchange making application under this subsection would unreasonably impair the ability of any dealer to solicit or effect transactions in such security for his own account, or would unreasonably restrict competition among dealers in such security or between such dealers acting in the capacity of market makers who are specialists and such dealers who are not specialists.". (2) Paragraph (6) thereof is amended by striking out "section 19(b) of". SEC. 9. Section 12 of the Securities pjxchange Act of 1934 (15 U.S.C. 781) is amended by adding at the end thereof the following new subsections: " (j) The Commission is authorized, by order, as it deems necessary or appropriate for the protection of investors to deny, to suspend the effective date of, to suspend for a period not exceeding twelve months, or to revoke the registration of a security, if the Commission finds, on the record after notice and opportunity for hearing, that the issuer of such security has failed to comply with any provision of this title or the rules and regulations thereunder. No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked pursuant to the preceding sentence. " (k) If in its opinion the public interest and the protection of investors so require, the Commission is authorized summarily to suspend t r a d i n g in any security (other than an exempted security) for a period not exceeding ten days, or with the approval of the President, summarily to suspend all t r a d i n g on any national securities exchange or otherwise, in securities other than exempted securities, for a period not exceeding ninety days. No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security in which t r a d i n g is so suspended. "(1) I t shall be unlawful for an issuer, any class of whose securities is registered pursuant to this section or would be required to be so registered except for the exemption from registration provided by subsection (g)(2)(B) or (g)(2)(G) of this section, by the use of any means or instrumentality of interstate commerce, or of the mails, to issue, either originaHy or upon transfer, any of such securities in a form or with a format which contravenes such rules and regulations as the Commission may prescribe as necessary or appropriate for the p r o m p t and accurate clearance and settlement of transactions in securities. The provisions of this subsection shall not apply to variable annuity contracts or variable life policies issued by an insurance company or its separate accounts.

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Page:United States Statutes at Large Volume 89.djvu/179

 PUBLIC LAW 94-29—JUNE 4, 1975 " (m) The Commission is authorized and directed to make a study and investigation of the practice of recording the ownership of securities in the records of the issuer in other than the name of the beneficial owner of such securities to determine (1) whether such practice is consistent with the purposes of this title, with particular reference to subsection (g) of this section and sections 13, 14, 1 5 (d), 16, and 17A, and (2) whether steps can be taken to facilitate communications between issuers and the beneficial owners of their securities while at the same time retaining the benefits of such practice. The Commission shall report to the Congress its preliminary findings within six months after the date of enactment of the Securities Acts Amendments of 1975, and its final conclusions and recommendations within one year of such date.". SEC. 10. Section 13 of the Securities Exchange Act of 1934 (16 U.S.C. 78m) is amended by adding at the end thereof the following new subsection: " (f)(1) Every institutional investment manager which uses the mails, or any means or instrumentality of interstate commerce in the course of its business as an institutional investment manager and which exercises investment discretion with respect to accounts holding equity securities of a class described in section 13(d)(1) of this title having an aggregate fair market value on the last t r a d i n g day in any of the preceding twelve months of at least $100,000,000 or such lesser amount (but in no case less than $10,000,000) as the Commission, by rule, may determine, shall file reports with the Commission in such form, for such periods, and at such times after the end of such periods as the Commission, by rule, may prescribe, but in no event shall such reports be filed for periods longer than one year or shorter than one quarter. Such reports shall include for each such equity security held on the last day of the reporting period by accounts (in aggregate or by type as the Commission, by rule, may prescribe) with respect to which the institutional investment manager exercises investment discretion (other than securities held in amounts which the Commission, by rule, determines to be insignificant for purposes of this subsection), the name of the issuer and the title, class, C U S I P number, number of shares or principal amount, and aggregate fair market value of each such security. Such reports may also include for accounts (in aggregate or by type) with respect to which the institutional investment manager exercises investment discretion such of the following information as the Commission, by rule, prescribes— " (A) the name of the issuer and the title, class, C U S I P number, number of shares or principal amount, and aggregate fair market value or cost or amortized cost of each other security (other than an exempted security) held on the last day of the reporting period by such accounts; " (B) the aggregate fair market value or cost or amortized cost of exempted securities (in aggregate or by class) held on the last day of the reporting period by such accounts; " (C) the number of shares of each equity security of a class described in section 13(d)(1) of this title held on the last day of the reporting period by such accounts with respect to which the institutional investment manager possesses sole or shared authority to exercise the voting rights evidenced by such securities; " (D) the aggregate purchases and aggregate sales during the reporting period of each security (other than an exempted security) effected by or for such accounts; and " (E) w i t h respect to any transaction or series of transactions having a market value of at least $500,000 or such other amount as the Commission, by rule, may determine, effected during the

89 STAT. 119 Study.

15 USC 78m, 78n, 78o, 78p; Post, p. 141. Reports to Congress. Recommendations to Congress. Periodic reports.

Contents.

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Page:United States Statutes at Large Volume 89.djvu/180

 89 STAT. 120 15 USC 78m.

Exemption.

Information, availability to public.

Consultation.

PUBLIC LAW 94-29—JUNE 4, 1975 reporting period by or for such accounts in any equity security of a class described in section 13(d)(1) of this title— "(i) the name of the issuer and the title, class, and CUSIP number of the security; " (ii) the number of shares or principal amount of the security involved in the transaction; "(iii) whether the transaction was a purchase or sale; " (iv) the per share price or prices at which the transaction was effected; "(v) the date or dates of the transaction; " (vi) the date or dates of the settlement of the transaction; "(vii) the broker or dealer through whom the transaction was eft'ected; "(viii) the market or markets in which the transaction was effected; and " (ix) such other related information as the Commission, by rule, may prescribe. "(2) The Commission, by rule or order, may exempt, conditionally or unconditionally, any institutional investment manager or security or any class of institutional investment managers or securities from any or all of the provisions of this subsection or the rules thereunder. " (3) The Commission shall make available to the public for a reasonable fee a list of all equity securities of a class described in section 13(d)(1) of this title, updated no less frequently than reports are required to be filed pursuant to paragraph (1) of this subsection. The Commission shall tabulate the information contained in any report filed pursuant to this subsection in a manner which will, in the view of the Commission, maximize the usefulness of the information to other Federal and State authorities and the public. Promptly after the filing of any such report, the Commission shall make the information contained therein conveniently available to the public for a reasonable fee in such form as the Commission, by rule, may prescribe, except that the Commission, as it determines to be necessary or appropriate in the public interest or for the protection of investors, may delay or prevent public disclosure of any such information in accordance with section 552 of title 5, United States Code. Notwithstanding the preceding sentence, any such information identifying the securities held by the account of a natural person or an estate or trust (other than a business trust or investment company) shall not be disclosed to the public. "(4) In exercising its authority under this subsection, the Commission shall determine (and so state) that its action is necessary or appropriate in the public interest and for the protection of investors or to maintain fair and orderly markets or, in granting an exemption, that its action is consistent with the protection of investors and the jjurposes of this subsection. In exercising such authority the Commission shall take such steps as are within its power, including consulting with the Comptroller General of the United States, the Director of the Office of Management and Budget, the appropriate regulatory agencies. Federal and State authorities which, directly or indirectly, require reports from institutional investment managers of information substantially similar to that called for by this subsection, national securities exchanges, and registered securities associations, (A) to achieve uniform, centralized reporting of information concerning the securities holdings of and transactions by or for accounts with respect to which institutional investment managers exercise investment discretion, and (B) consistently with the objective set forth in the preceding subparagraph, to avoid unnecessarily duplicative reporting by, and minimize the compliance burden on, institutional investment managers. Federal authorities which, directly or indirectly, require reports from institutional investment managers of information sub-

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Page:United States Statutes at Large Volume 89.djvu/181

 PUBLIC LAW 94-29—JUNE 4, 1975 stantially similar to that called for by this subsection shall cooperate with the Commission in the performance of its responsibilities under the preceding sentence. A n institutional investment manager which is a bank, the deposits of which a r e insured in accordance with the Federal Deposit Insurance Act, shall file with the appropriate regulatory agency a copy of every report filed with the Commission pursuant to this subsection. " (5)(A) For purposes of this subsection the term 'institutional investment manager' includes any person, other than a natural person, investing in or buying and selling securities for its own account, and any person exercising investment discretion with respect to the account of any other person. " (B) The Commission shall adopt such rules as it deems necessary or appropriate to prevent duplicative reporting pursuant to this subsection by two or more institutional investment managers exercising investment discretion with respect to the same amount.". SEC. 11. Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended as follows: (1) The title thereof is amended to read: "REGISTRATION AND REGULATION OF BROKERS AND DEALERS".

89 STAT. 121

Copies of reports, filing.

12 USC 1811 note. "Institution investment manager."

Rules.

Registration and regulation of brokers and dealers.

(2) Subsections (a) and (b) thereof are amended to read as follows: " (a)(1) I t shall be unlawful for any broker or dealer which is either a person other than a natural person or a natural person not associated with a broker or dealer which is a person other than a natural person (other than such a broker or dealer whose business is exclusively intrastate and who does not make use of any facility of a national securities exchange) to make use of the mails or any means or ins*:rumentality of interstate commerce to effect any transactions in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills) unless such broker o r dealer is registered in accordance with subsection (b) of this section. " (2) The Commission, by rule or order, as it deems consistent with Exemption. the public interest and the protection of investors, may conditionally or unconditionally exempt from paragraph (1) of this subsection any broker or dealer or class of brokers or dealers specified in such rule or order. " (b)(1) A broker or dealer may be registered by filing with the Commission an application for registration in such form and containing such information and documents concerning such broker or dealer and any persons associated with such broker or dealer as the Commission, by rule, may prescribe as necessary o r appropriate i n the public interest or for the protection of investors. W i t h i n forty-five days of the date of the filing of such application (or within such longer period as to which the applicant consents), the Commission shall— " (A) by order g r a n t registration, o r " (B) institute proceedings to determine whether registration should be denied. Such proceedings shall include notice of the grounds for denial under consideration and opportunity for hearing and shall be concluded within one hundred twenty days of the date of the filing of the application for registration. A t the conclusion of such proceedings, the Commission, by order, shall g r a n t or deny such registration. The Commission may extend the time for conclusion of such proceedings for u p to ninety days if it finds good cause for such extension and publishes its reasons for so finding or for such longer period as to which the applicant consents. The Commission shall g r a n t such registration if the Commission finds that the requirements of this section are satisfied. The Commis-

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