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Page:United States Statutes at Large Volume 89.djvu/182

 89 STAT. 122

15 USC 78e.

Suspension or revocation of registration. Notice and hearing.

PUBLIC LAW 94-29—JUNE 4, 1975 sion shall deny such registration if it does not make such a finding or if it finds that if the applicant were so registered, its registration would be subject to suspension or revocation under paragraph (4) of this subsection. " (2)(A) A n application for registration of a broker or dealer to be formed or organized may be made by a broker or dealer to which the broker or dealer to be formed or organized is to be the successor. Such application, in such form as the Commission, by rule, may prescribe, shall contain such information and documents concerning the applicant, the successor, and any persons associated with the applicant or the successor, as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. The g r a n t or denial of registration to such an applicant shall be in accordance with the procedures set forth in paragraph (1) of this subsection. I f the Commission g r a n t s such regisitration, the registration shall terminate on the forty-fifth day after the effective date thereof, unless prior thereto the successor shall, in accordance with such rules and regulations as the Commission may prescribe, adopt the application for registration as its own. " (B) Any person who is a broker or dealer solely by reason of acting as a municipal securities dealer or municipal securities broker, who so acts through a separately identifiable department or division, and who so acted in such a manner on the date of enactment of the Securities Acts Amendments of 1975, may, in accordance with such terms and conditions as the Commission, by rule, prescribes as necessary and appropriate in the public interest and for the protection of investors, register such separately identifiable department or division in accordance with this subsection. If any such department or division is so registered, the department or division and not such person himself shall be the broker or dealer for purposes of this title. " (C) W i t h i n six months of the date of the g r a n t i n g of registration to a broker or dealer, the Commission, or upon the authorization and direction of the Commission, a registered securities association or national securities exchange of which such broker or dealer is a member, shall conduct an inspection of the broker or dealer to determine whether it is operating in conformity with the provisions of this title and the rules and regulations the r e under: Provided, however. That the Commission may delay such inspection of any class of brokers or dealer-s for a period not to exceed six months. " (3) Any provision of this title (other than section 5 and subsection (a) of this section) which prohibits any act, practice, or course of business if the mails or any means or instrumentality of interstate commerce is used in connection therewith shall also prohibit any such act, practice, or course of business by any registered broker or dealer or any person acting on behalf of such a broker or dealer, irrespective of any use of the mails or any means or instrumentality of interstate commerce in connection therewith. " (4) The Commission, by order, shall censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding twelve months, or revoke the registration of any broker or dealer if it finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or revocation is in the public interest and that such broker or dealer, whether prior or subsequent to becoming such, or any person associated with such broker or dealer, whether prior or subsequent to becoming so associated— " (A) has willfully made or caused to be made in any application for registration or report required to be filed with the Commission under this title, or in any proceeding before the Com-

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Page:United States Statutes at Large Volume 89.djvu/183

 PUBLIC LAW 94-29—JUNE 4, 1975 mission with respect to registration, 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 or report any material fact which is required to be stated therein. "(B) has been convicted within ten years preceding the filing of any application for registration or at any time thereafter of any felony or misdemeanor which the Commission finds— "(i) involves the purchase or sale of any security, the taking of a false oath, the making of a false report, bribery, perjury, burglary, or conspiracy to commit any such offense; "(ii) arises out of the conduct of the business of a broker, dealer, municipal securities dealer, investment adviser, bank, insurance company, or fiduciary; "(iii) involves the larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion, or misappropriation of funds, or securities; or "(iv) involves the violation of section 152, 1341, 1342, or 1343 or chapter 25 or 47 of title 18, United States Code. "(C) is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an investment adviser, underwriter, broker, dealer, or municipal securities dealer, or as an affiliated person or employee of any investment company, bank, or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity, or in connection with the purchase or sale of any security. "(D) has willfully violated any provision of the Securities Act of 1933, the Investment Advisers Act of 1940, the Investment Company Act of 1940, this title, the rules or regulations under any of such statutes, or the rules of the Municipal Securities Rulemaking Board, or is unable to comply with any such provision. " (E) has willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person of any provision of the Securities Act of 1933, the Investment Advisers Act of 1940, the Investment Company Act of 1940, this title, the rules or regulations under any of such statutes, or the rules of the Municipal Securities Rulemaking Board, or has failed reasonably to supervise, with a view to preventing violations of the provisions of such statutes, rules, and regulations, another person who commits such a violation, if such other person is subject to his supervision. For the purposes of this subparagraph (E) no person shall be deemed to have failed reasonably to supervise any other person, if— "(i) there have been established procedures, and a system for applying such procedures, which would reasonably be expected to prevent and detect, insofar as practicable, any such violation by such other person, and "(ii) such person has reasonably discharged the duties and obligations incumbent upon him by reason of such procedures and system without reasonable cause to believe that such procedures and system were not being complied with. " (F) is subject to an order of the Commission entered pursuant to paragraph (6) of this subsection ^b) barring or suspending the right of such person to be associated with a broker or dealer. "(5) Pending final determination whether any registration under this subsection shall be revoked, the Commission, by order, may

89 STAT. 123

18 USC 471 et seq., 1001 et seq.

15 USC 77a. 15 USC 80b-20. 15 USC 80a-51.

Suspension. Notice and hearing.

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text:
1911 Encyclopædia Britannica/Pepper Tree

PEPPER TREE, a tree which has no proper connexion with the true pepper (Piper), and is really a member of the natural order Anacardiaceae, being known botanically as Schinus Molle, from the Peruvian name Mulli. It is a native of tropical South America and is grown in the open air in the south of Europe. It is a small tree with unequally pinnate leaves, the segments linear, entire or finely saw-toothed, the terminal one longer than the rest, and all filled with volatile oil stored in large cells or cysts, which are visible to the naked eye and appear like holes when the leaf is held up to the light. When the leaves are thrown upon the surface of water the resinous or oily fluid escapes with such force as violently to agitate them. The flowers are small, whitish, arranged in terminal clusters and polygamous or unisexual, with five sepals, as many petals, ten stamens (as large as the petals in the case of the male flower, very small in the female flower, but in both springing from a cushion-like disk surrounding the base of the three-celled ovary). The style is simple or three-cleft, and the fruit a small, globose, pea-like drupe with a bony kernel enclosing a single seed. The fleshy portion of the fruit has a hot aromatic flavour from the abundance of the resin it contains. The resin is used for medicinal purposes by the Peruvians, and has similar properties to mastic. The Japan pepper tree is Xanthoxylum piperitum the fruits of which have also a hot taste. Along the Riviera the tree is known as Melia Azedarach, or the "Pride of India," is also incorrectly called the pepper tree by visitors.


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Page:United States Statutes at Large Volume 89.djvu/184

 89 STAT. 124

Notice and hearing.

Standards of operational capability.

Rules and regulations.

PUBLIC LAW 94-29—JUNE 4, 1975 suspend such registration, if such suspension appears to the Commission, after notice and opportunity for hearing, to be necessary or appropriate in the public interest or for the protection of investors. Any registered broker or dealer may, upon such terms and conditions as the Commission deems necessary or appropriate in the public interest or for the protection of investors, withdraw from registration by filing a written notice of withdrawal with the Commission. If the Commission finds that any registered broker or dealer is no longer in existence or has ceased to do business as a broker or dealer, the Commission, by order, shall cancel the registration of such broker or dealer. "(6) The Commission, by order, shall censure or place limitations on the activities or functions of any person associated, or seeking to become associated, with a broker or dealer, or suspend for a period not exceeding twelve months or bar any such person from being associated with a broker or dealer, if the Commission finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or bar is in the public interest and that such person has committed or omitted any act or omission enumerated in subparagraph (A), (D), or (E) of paragraph (4) of this subsection, has been convicted of any offense specified in subparagraph (B) of said paragraph (4) within ten years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of said paragraph (4). It shall be unlawful for any person as to whom such an order suspending or barring him from being associated with a broker or dealer is in effect willfully to become, or to be, associated with a broker or dealer without the consent of the Commission, and it shall be unlawful for any broker or dealer to permit such a person to become, or remain, a person associated with him without the consent of the Commission, if such broker or dealer knew, or in the exercise of reasonable care should have known, of such order. "(7) No registered broker or dealer shall effect any transaction in, or induce the purchase or sale of, any security unless such broker or dealer meets such standards of operational capability and such broker or dealer and all natural persons associated with such broker or dealer meet such standards of training, experience, competence, and such other qualifications as the Commission finds necessary or appropriate in the public interest or for the protection of investors. The Commission shall establish such standards by rules and regulations, which may— "(A) specify that all or any portion of such standards shall be applicable to any class of brokers and dealers and persons associated with brokers and dealers; "(B) require pereons in any such class to pass tests prescribed in accordance with such rules and regulations, which tests shall, with respect to any class of partners, officers, or supervisory employees (which latter term may be defined by the Commission's rules and regulations and as so defined shall include branch managers of brokers or dealers) engaged in the management of the broker or dealer, include questions relating to bookkeeping, accounting, internal control over cash and securities, supervision of employees, maintenance of records, and other appropriate matters; and "(C) provide that persons in any such class other than brokers and dealers and partners, officers, and supervisory employees of brokers or dealers, may be qualified solely on the basis of compli-

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Page:United States Statutes at Large Volume 89.djvu/185

 PUBLIC LAW 94-29—JUNE 4, 1975 ance with such standards of training and such other qualifications as the Commission finds appropriate. The Commission, by rule, may prescribe reasonable fees and charges to defray its costs in carrying out this paragraph, including, but not limited to, fees for any test administered by it or under its direction. The Commission may cooperate with registered securities associations and national securities exchanges in devising and administering tests and may require registered brokers and dealers and persons associated with such brokers and dealers to pass tests administered by or on behalf of any such association or exchange and to pay such association or exchange reasonable fees or charges to defray the costs incurred by such association or exchange in administering such tests. " (8) I n addition to the fees and charges authorized by paragraph (7) of this subsection, each registered broker or dealer not a member of a registered securities association shall pay to the Commission such reasonable fees and charges as may be necessary to defray the costs of the additional regulatory duties required to be performed by the Commission because such brokei- or dealer eifects transactions in securities otherwise than on a national securities exchange of which it is a member and is not a member of a registered securities association. The Commission, by rule, shall establish such fees and charges. " (9) No broker or dealer subject to paragraph (8) of this subsection shall effect any transaction in, oi; induce the purchase or sale of, any security (otherwise than on a national securities exchange of which it is a member) in contravention of such rules and regulations as the Commission may prescribe designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in gener-al, to protect investors and the public interest. "(10) For the purposes of determining whether a person is subject to a statutory disqualification under section 6(c)(2), 15A(g)(2), or l 7 A (b)(4)(B) of this title, the term 'Commission' in paragraph (4) (B) of this subsection shall mean 'exchange', 'association', or 'clearing agency', respectively.". (3) Paragraph s (1), (2), and (3) of subsection (c) thereof are amended to read as follows: " (c)(1) No 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 or attempt to induce the purchase or sale of, any security (other than commercial paper, bankers' acceptances, or commercial bills) otherwise than on a national securities exchange of which it is a member by means of any manipulative, deceptive, or other fraudulent device or contrivance, and no municipal securities dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any municipal security by means of any manipulative, deceptive, or other fraudulent device or contrivance. The Commission shall, for the purposes of t h i s paragraph, by rules and regulations define such devices or contrivances as are manipulative, deceptive, or otherwise fraudulent. " (2) No 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 or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills) otherwise than on a national securities exchange of which it is a member, in connection with which such broker or dealer engages in any fraudulent, deceptive, or manipulative act or practice, or makes any fictitious quotation, and no municipal securities dealer shall make use of the mails or any means

89 STAT. 125

Fees and charges.

Additional fees.

"Commission." Ante, p. 104; Post, pp. 127, 141. 15 USC 78o. Manipulative or fraudulent devices.

Manipulative or fraudulent acts.

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Page:United States Statutes at Large Volume 89.djvu/186

 89 STAT. 126

15 USC 78o.

15 USC 78g.

PUBLIC LAW 94-29—JUNE 4, 1975 or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any municipal security in connection with which such municipal securities dealer engages in any fraudulent, deceptive, or manipulative act or practice, or makes any fictitious quotation. The Commission shall, for the purposes of this paragraph, by rules and regulations define, and prescribe means reasonably designed to prevent, such acts and practices as are fraudulent, deceptive, or manipulative and such quotations as are fictitious. " (3) No 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 or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills) in contravention of such rules and regulations as the Commission shall prescribe as necessary or appropriate in the public interest or for the protection of investors to provide safeguards with respect to the financial responsibility and related practices of brokers and dealers including, but not limited to, the acceptance of custody and use of customers' securities and the carrying and use of customers' deposits or credit balances. Such rules and regulations shall (A) require the maintenance of reserves with respect to customer's' deposits or credit balances, and (B) no later than September 1, 1975, establish minimum financial responsibility requirements for all brokers and dealers.". (4) Paragraph (5) of subsection (c) thereof is amended to read as follows: " (5) No dealer (other than a specialist registered on a national securities exchange) acting in the capacity of market maker or otherwise shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or a municipal security) in contravention of such specified and appropriate standards with respect to dealing as the Commission, by rule, shall prescribe as necessary or appropriate in the public 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. Under the rules of the Commission a dealer in a security may be prohibited from acting as a broker in that security.". (5) Subsection (c) thereof is further amended by adding at the end thereof the following new paragraph: " (6) No 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 or attempt to induce the purchase or sale of, any security (other than an exempted security, municipal security, commercial paper, bankers' acceptances, or commercial bills) in contravention of such rules and regulations as the Commission shall prescribe as necessary or appropriate in the public interest and for the protection of investors or to perfect or remove impediments to a national system for the prompt and accurate clearance and settlement of securities transactions, with respect to the time and method of, and the form and format of documents used in connection with, making settlements of and payments for transactions in securities, making transfers and deliveries of securities, and closing accounts. Nothing in this paragraph shall be construed (A) to affect the authority of the Board of Governors of the Federal Reserve System, pursuant to section 7 of this title, to prescribe rules and regulations for the purpose of preventing the excessive use of credit for the purchase or carrying of securities, or (B) to authorize the Commission to prescribe rules or regulations for such purpose.".

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Page:United States Statutes at Large Volume 89.djvu/187

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. 127

(6] The section is further amended by adding at the end thereof 15 USC 78o. the following new subsection: "(e) The Commission, by rule, as it deems necessary or appropriate in the public interest and for the protection of investors or to assure equal regulation, may require any member of a national securities exchange not required to register under section 15 of this title and any Ante, p. 121. person associated with any such member to comply with any provision of this title (other than section 15(a)) or the rules or regulations thereunder which by its terms regulates or prohibits any act, practice, or course of business by a 'broker or dealer' or 'registered broker or dealer' or a 'person associated with a broker or dealer,' respectively.". SEC. 12. Section 15A of the Securities Exchange Act of 1934 (15 Registered securities U.S.C. 78o-3) is amended as follows: (1) The title thereof is amended to read: "REGISTERED SECURITIES associations. ASSOCIATIONS".

(2) Subsections (a) and (b) thereof are amended to read as follows: "(a) An association of brokers and dealers may be registered as a national securities association pursuant to subsection (b), or as an affiliated securities association pursuant to subsection (d), 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 Post, p. 146. Commission an application for registration in such form as the Commission, by rule, may prescribe containing the rules of the association and such other information and documents as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. "(b) An association of brokers and dealers shall not be registered as a national securities association unless the Commission determines that— • "(1) By reason of the number and geographical distribution of its members and the scope of their transactions, such association will be able to carry out the purposes of this section. "(2) Such association 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 Post, p. 137. its members and persons associated with its members, with the provisions of this title, the rules and regulations thereunder, the rules of the Municipal Securities Rulemaking Board, and the rules of the association. "(3) Subject to the provisions of subsection (g) of this section, the rules of the association provide that any registered broker or dealer may become a member of such association and any person may become associated with a member thereof. "(4) The rules of the association 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 association, broker, or dealer. "(5) The rules of the association provide for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility or system which the association operates or controls. " (6) The rules of the association 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

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Page:United States Statutes at Large Volume 89.djvu/188

 89 STAT. 128

Post, pp. 137, 146.

15 USC 78o-3.

"Nonmember professional."

PUBLIC LAW 94-29—JUNE 4, 1975 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, to fix minimum profits, to impose any schedule or fix rates of commissions, allowances, discounts, or other fees to be charged by its members, 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 association. " (7) The rules of the association 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 members shall be appropriately disciplined for violation of any provision of this title, the rules or regulations thereunder, the rules of the Municipal Securities Rulemaking Board, or the rules of the association, 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. " (8) The rules of the association are in accordance with the provisions of subsection (h) 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 with a member thereof, and the prohibition or limitation by the association of any person with respect to access to services offered by the association or a member thereof. " (9) The rules of the association do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of this title. " (10) The requirements of subsection (c), insofar as these may be applicable, are satisfied. " (11) The rules of the association include provisions governing the form and content of quotations relating to securities sold otherwise than on a national securities exchange which may be distributed or published by any member or person associated with a member, and the persons to whom such quotations may be supplied. Such rules relating to quotations shall be designed to produce fair and informative quotations, to prevent fictitious or misleading quotations, and to promote orderly procedures for collecting, distributing, and publishing quotations.". (3) The section is amended by striking out subsections (e), (f), (g), (h), (j), (k), (1), and (n) thereof, redesignating subsections (i) and (m) thereof as subsections (e) and (f), respectively, and amending redesignated subsection (e) to read as follows: " (e)(1) The rules of a registered securities association may provide that no member thereof shall deal with any nonmember professional (as defined in paragraph (2) of this subsection) except at the same prices, for the same commissions or fees, and on the same terms and conditions as are by such member accorded to the general public. " (2) For the purposes of this subsection, the term 'nonmember professional' shall include (A) with respect to transactions in securities other than municipal securities, any registered broker or dealer who is not a member of any registered securities association, except such a broker or dealer who deals exclusively in commercial paper, bankers' acceptances, and commercial bills, and (B) with respect to transactions in municipal securities, any municipal securities dealer (other than a bank or division or department of a laank) who is not a member

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Page:United States Statutes at Large Volume 89.djvu/189

 PUBLIC LAW 94-29—JUNE 4, 1975 of any registered securities association and any municipal securities broker who is not a member of any such association, " (3) Nothing in this subsection shall be so construed or applied as to prevent (A) any member of a registered securities association from g r a n t i n g to any other member of any registered securities association any dealer's discount, allowance, commission, or special terms, in connection with the purchase or sale of securities, or (B) any member of a registered securities association or any municipal securities dealer which is a bank or a division or department of a bank from g r a n t i n g to any member of any registered securities association or any such municipal securities dealer any dealer's discount, allowance, commission, or special terms in connection with the purchase or sale of municipal securities: Provided, however, That the g r a n t i n g of any such discount, allowance, commission, or special terms in connection with the purchase or sale of municipal securities shall be subject to rules of the Municipal Securities Rulemaking Board adopted pursuant to section 15B (b)(2)(K) of this title.". (4) The section is further amended by adding at the end thereof the following new subsections: " (g)(1) A registered securities association shall deny membershij) to any person who is not a registered broker or dealer. " (2) A registered securities association may, and in cases in which the Commission, by order, directs as necessary or appropriate in the public interest or for the protection of investors shall, deny membership to any registered broker or dealer, and bar from becoming associated with a member any person, who is subject to a statutory disqualification. A registered securities association shall file notice with the Commission not less than t h i r t y days p r i o r to admitting any registered broker or dealer to membership or permitting any person to become associated with a member, if the association knew, or in the exercise of reasonable care should have known, that such broker or dealer or 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. " (3)(A) A registered securities association may deny membership to, or condition the membership of, a registered broker or dealer if (i) such broker or dealer does not meet such standards of financial responsibility or operational capability or such broker or dealer or any natural person associated with such broker or dealer does not meet such standards of training, experience, and competence as are prescribed by the rules of the association or (ii) such broker or dealer or person associated with such broker or dealer has engaged and there is a reasonable likelihood he will again engage in acts or practices inconsistent wnth just and equitable principles of trade. A registered securities association 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 association. " (B) A registered securities association may b a r a natural person from becoming associated with a member or condition the association of a natural person with a member if such natural person (i) does not meet such standards of training, experience, and competence as are prescribed by the rules of the association or (ii) has engaged and there is a reasonable likelihood he will again engage in acts or practices inconsistent with just and equitable principles of trade. A registered securities association may examine and verify the qualifications of an applicant to become a person associated with a member in accordance with procedures established by the rules of the association and require

89 STAT. 129

Post, p. 131. Membership denial 15 USC 78o-3.

Notice,

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Page:United States Statutes at Large Volume 89.djvu/190

 89 STAT. 130

Disciplinary proceedings, notice.

Statement.

Notice and hearing.

Summary suspension.

PUBLIC LAW 94-29—JUNE 4, 1975 a n a t u r a l person associated with a member, or any class of such natu r a l persons, to be registered with the association in accordance with procedures so established. " (C) A registered securities association may b a r any person from becoming associated with a member if such person does not agree (i) to supply the association with such information with respect to its relationship and dealings with the member as may be specified in the rules of the association and (ii) to permit examination of its books and records to verify the accuracy of any information so supplied. " (4) A registered securities association may deny membership to a registered broker or dealer not engaged in a type of business in which the rules of the association require members to be engaged: Provided, however, That no registered securities association may deny membership to a registered broker or dealer by reason of the amount of such type of business done by such broker or dealer or the other types of business in which he is engaged. " (h)(1) I n any proceeding by a registered securities association 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 association shall b r i n g specific charges, notify such member or person of, and give him an opportunity to defend against, such charges, and keep a record. A determination by the association 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, the rules of the Municipal Securities Rulemaking Board, or the rules of the association which any such act or practice, or omission to act, is deemed to violate; and " (C) the sanction imposed and the reason therefor. " (2) I n any proceeding by a registered securities association to determine whether a person shall be denied membership, barred from becoming associated with a member, or prohibited or limited with respect to access to services offered by the association or a member thereof (other than a summary proceeding pursuant to paragraph (3) of this subsection), the association 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 association 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 association 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 registered securities association 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 association determines 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 association, or (C) limit or prohibit any person with respect to access to services offered by the association 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 associa-

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Page:United States Statutes at Large Volume 89.djvu/191

 PUBLIC LAW 94-29—JUNE 4, 1975 tion 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 with safety to investors, creditors, members, or the association. Any person aggrieved by any such summary action shall be promptly afforded an opportunity for a hearing by the association 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.". SEC. 13. The Securities Exchange Act of 1934 is amended by inserting after section 15A (15 U.S.C. 78o-3) the following new section: "MUNICIPAL

89 STAT. 131

Notice and hearing.

SECURITIES

"SEC. 15B. (a)(1) It shall be unlawful for any municipal securities dealer (other than one registered as a broker or dealer under section 15 of this title) to make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any municipal security unless such municipal securities dealer is registered in accordance with this subsection. "(2) A municipal securities dealer may be registered by filing with the Commission an application for registration in such form and containing such information and documents concerning such municipal securities dealer and any persons associated with such municipal securities dealer as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. Within 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 grant registration, or "(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. At the conclusion of such proceedings the Commission, by order, shall grant or deny such registration. The Commission may extend the time for the conclusion of such proceedings for up 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 grant the registration of a municipal securities dealer if the Commission finds that the requirements of this section are satisfied. The Commission shall deny such registration if it does not make such a finding or if it finds that if the applicant were so registered, its registration would be subject to suspension or revocation under subsection (c) of this section. "(3) Any provision of this title (other than section 5 or paragraph (1) of this subsection) which prohibits any act, practice, or course of business if the mails or any means or instrumentality of interstate commerce is used in connection therewith shall also prohibit any such act, practice, or course of business by any registered municipal securities dealer or any person acting on behalf of such municipal

Dealer registration. 15 USC 78o-4. Ante, p. 121.

Application filing.

15 USC 78e.

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Page:United States Statutes at Large Volume 89.djvu/192

 89 STAT. 132

Exemption.

Municipal Securities Rulemaking Board. Establishment; membership. Term.

Rules.

PUBLIC LAW 94-29—JUNE 4, 1975 securities dealer, irrespective of any use of the mails or any means or instrumentality of interstate commerce in connection therewith. "(4) The Commission, by rule or order, upon its own motion or upon application, may conditionally or unconditionally exempt any broker, dealer, or municipal securities dealer or class of brokers, dealers, or municipal securities dealers from any provision of this section or the rules or regulations thereunder, if the Commission finds that such exemption is consistent with the public interest, the protection of investors, and the purposes of this section. "(b)(1) Not later than one hundred twenty days after the date of enactment of the Securities Acts Amendments of 1975, the Commission shall establish a Municipal Securities Rulemaking Board (hereinafter in this section referred to as the 'Board'), to be composed initially of fifteen members appointed by the Commission, which shall perform the duties set forth in this section. The initial members of the Board shall serve as members for a term of two years, and shall consist of (A) five individuals who are not associated with any broker, dealer, or municipal securities dealer, at least one of Avhom shall be representative of investors in municipal securities, and at least one of whom shall be representative of issuers of municipal securities (which members are hereinafter referred to as 'public representatives'); (B) five individuals wdio are associated with and representative of municipal securities brokers and municipal securities dealers which are not banks or subsidiaries or departments or divisions of banks (which members are hereinafter referred to as 'brokerdealer representatives'); and (C) five individuals who are associated with and representative of municipal securities dealers which are banks or subsidiaries or departments or divisions of banks (which members are hereinafter referred to as 'bank representatives'). Prior to the expiration of the terms of office of the iiiitial members of the Board, an election shall be held under rules adopted by the Board (pursuant to subsection (b)(2)(B) of this section) of the members to succeed such initial members. " (2) The Board shall propose and adopt rules to effect the purposes of this title with respect to transactions in municipal securities effected by brokers, dealers, and municipal securities dealers. (Such rules are hereinafter collectively referred to in this title as 'rules of the Board'.) The rules of the Board, as a minimum, shall: "(A) provide that no municipal securities broker or municipal securities dealer shall effect any transaction in, or indiice or attempt to induce the purchase or sale of, any municipal security unless such municipal securities broker or municipal securities dealer meets such standards of operational capability and such municipal securities broker or municipal securities dealer and every natural person associated with such municipal securities broker or municipal securities dealer meet such standards of training, experience, competence, and such other qualifications as the Board finds necessary or appropriate in the public interest or for the protection of investors. In connection with the definition and application of such standards the Board may— "(i) appropriately classify mimicipal securities brokers and municipal securities dealers (taking into account relevant matters, including types of business done, nature of securities other than municipal securities sold, and character of business organization), and persons associated with municipal securities brokers and municipal securities dealers; " (ii) specify that all or any portion of such standards shall be applicable to any such class;

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Page:United States Statutes at Large Volume 89.djvu/193

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. 133

"(iii) require persons in any such class to pass tests administered in accordance with subsection (c)(7) of this section; and "(iv) provide that persons in any such class other than municipal securities brokers and municipal securities dealers and partners, officers, and supervisory employees of municipal securities brokers or municipal securities dealers, may be qualified solely on the basis of compliance with such standards of training and such other qualifications as the Board finds appropriate. "(B) establish fair procedures for the nomination and election of members of the Board and assure fair representation in such nominations and elections of municipal securities brokers and municipal securities dealers. Such rules shall provide that the membership of the Board shall at all times be equally divided among public representatives, broker-dealer representatives, and bank representatives, and that the public representatives shall be subject to approval by the Commission to assure that no one of them is associated with any broker, dealer, or municipal securities dealer and that at least one is representative of investors in municipal securities and at least one is representative of issuers of municipal securities. Such rules shall also specify the term member's shall serve and may increase the number of members which shall constitute the whole Board provided that such number is an odd number. "(C) be 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 municipal securities, to remove impediments to and perfect the mechanism of a free and open market in municipal securities, and, in general, to protect investors and the public interest; and not be designed to permit unfair discrimination between customers, issuers, municipal securities brokers, or municipal securities dealers, to fix minimum profits, to impose any schedule or fix rates of commissions, allowances, discounts, or other fees to be charged by municipal securities broker's or municipal security dealers, to regulate by virtue of any authority conferred by this title matters not related to the purposes of this title or the securities or the administration of the Board, or to impose any burden or competition not necessary or appropriate in furtherance of the purposes of this title. "(D) if the Board deems appropriate, provide for the arbitration of claims, disputes, and controversies relating to transactions in municipal securities: Provided, however, That no person other than a municipal securities broker, municipal securities dealer, or person associated with such a municipal securities broker or municipal securities dealer may be compelled to submit to such arbitration except at his instance and in accordance with sectic 29 of this title. 15 USC 78CC. " (E) provide for the periodic examination in accordance with subsection (c)(7) of this section of municipal securities brokers and municipal securities dealers to determine compliance with applicable provisions of this title, the rules and regulations thereunder, and the rules of the Board. Such rules shall specify the minimum scope and frequency of such examinations and shall be designed to avoid unnecessary regulatory duplication or undue

R7.1IU n. 77. IS

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Page:United States Statutes at Large Volume 89.djvu/194

 89 STAT. 134

Recordkeeping.

Ante, p. 97.

Fees.

Use of mail or instrumentality of interstate commerce, prohibition. Notice and hearing.

PUBLIC LAW 94-29—JUNE 4, 1975 regulatory burdens for any such municipal securities broker or municipal securities dealer. " (F) include provisions governing the form and content of quotations relating to municipal securities which may be distributed or published by any municipal securities broker, municipal securities dealer, or person associated with such a municipal securities broker or municipal securities dealer, and the persons to whom such quotations may be supplied. Such rules relating to quotations shall be designed to produce fair and informative quotations, to prevent fictitious or misleading quotations, and to promote orderly procedures for collecting, distributing, and publishing quotations. "(G) prescribe records to be made and kept by municipal securities brokers and municipal securities dealers and the periods for which such records shall be preserved. " (H) define the term 'separately identifiable department or division', as that term is used in section 3(a) (30) of this title, in accordance with specified and appropriate standards to assure that a bank is not deemed to be engaged in the business of buying and selling municipal securities through a separately identifiable department or division unless such department or division is organized and administered so as to permit independent examination and enforcement of applicable provisions of this title, the rules and regulations thereunder, and the rules of the Board. A separately identifiable department or division of a bank may be engaged in activities other than those relating to municipal securities. " (I) provide for the operation and administration of the Board, including the selection of a Chairman from among the members of the Board, the compensation of the members of the Board, and the appointment and compensation of such employees, attorneys, and consultants as may be necessary or appropriate to carry out the Board's functions under this section. " (J) provide that each municipal securities broker and each municipal securities dealer shall pay to the Board such reasonable fees and charges as may be necessary or appropriate to defray the costs and expenses of operating and administering the Board. Such rules shall specify the amount of such fees and charges. " (K) establish the terms and conditions under which any municipal securities dealer may sell, or prohibit any municipal securities dealer from selling, any part of a new issue of municipal securities to a municipal securities investment portfolio during the underwriting period. " (3) Nothing in this section shall be construed to impair or limit the power of the Commission under this title. " (c)(1) No broker, dealer, or municipal securities dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any municipal security in contravention of any rule of the Board. "(2) The Commission, by order, shall censure, place limitations on the activities, functions, or operations, suspend for a period not exceeding twelve months, or revoke the registration of any municipal securities dealer, if it finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, denial, suspension, or revocation, is in the public interest and that such municipal securities dealer has committed or omitted any act or omission

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Page:United States Statutes at Large Volume 89.djvu/195

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. 135

enumerated in subparagraph (A), (D), or (E) of paragraph (4) of section 15(b) of this title, has been convicted of any offense specified Ante, p. 121 in subparagraph (B) of such paragraph (4) within ten years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4). "(3) Pending final determination whether any registration under Registration, this section shall be revoked, the Commission, by order, may suspend suspension. such registration, if such suspension appears to the Commission, after Notice and notice and opportunity for hearing, to be necessary or appropriate in hearing. the public interest or for the protection of investors. Any registered municipal securities dealer may, upon such terms and conditions as the Commission may deem necessary in the public interest or for the protection of investors, withdraw from registration by filing a written notice of withdrawal with the Commission. If the Commission finds that any registered municipal securities dealer is no longer in existence or has ceased to do business as a municipal securities dealer, the Commission, by order, shall cancel the registration of such municipal securities dealer. "(4) The Commission, by order, sihall censure any person associ- Censure. ated, or seeking to become associated with, a municipal securities dealer or suspend for a period not exceeding twelve months or bar any such person from being associated with a municipal securities dealer, if the Commission finds, on the record after notice and opportunity for Notice and hearing, that such censure, suspension, or bar is in the public interest hearing. and that such person has committed or omitted any act or omission enumerated in subparagraph (A), (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 commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4). It shall be unlawful for any person as to whom an order entered pursuant to this paragraph or paragraph (5) of this subsection suspending or barring him from being associated with a municipal securities dealer is in effect willfully to become, or to be, associated with a municipal securities dealer without the consent of the Commission, and it shall be unlawful for any municipal securities dealer to permit such a person to become, or remain, a person associated with him without the consent of the Commission, if such municipal securities dealer knew, or, in the exercise of reasonable care should have known, of such order. "(5) With respect to any municipal securities dealer for which the Commission is not the appropriate regulatory agency, the appropriate regulatory agency for such municipal securities dealer may sanction any such municipal securities dealer in the manner and for the reasons specified in paragraph (2) of this subsection and any person associated with such municipal securities dealer in the manner and for the reasons specified in paragraph (4) of this subsection. In addition, such appropriate regulatory agency may, in accordance with section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), enforce compliance by such municipal securities dealer or any person associated with such municipal securities dealer with the provisions of this section, section 17 of this title, the rules of the Board, and the rules of the Post, p. 137. Commission pertaining to municipal securities dealers, persons associated with municipal securities dealers, and transactions in municipal securities. For purposes of the preceding sentence, any violation of any such provision shall constitute adequate basis for the issuance of any order under section 8(b) or 8 (c) of the Federal Deposit Insurance

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Page:United States Statutes at Large Volume 89.djvu/196

 89 STAT. 136 12 USC 1818.

Notice.

Ante, p. 121.

Tests.

Reports to Commission. Copies.

PUBLIC LAW 94-29—JUNE 4, 1975 Act, and the customers of any such municipal securities dealer shall be deemed to be 'depositors' as that term is used in section 8(c) of that Act. Nothing in this paragraph shall be construed to affect in any way the powers of such appropriate regulatory agency to proceed against such municipal securities dealer under any other provision of law. " (6)(A) The Commission, prior to the entry of an order of investigation, or commencement of any proceedings, against any municipal securities dealer, or person associated with any municipal securities dealer, for which the Commission is not the appropriate regulatory agency, for violation of any provision of this section, section 15(c)(1) or 15(c)(2) of this title, any rule or regulation under any such section, or any rule of the board, shall (i) give notice to the appropriate regulatory agency for such municipal securities dealer of the identity of such municipal securities dealer or person associated with such municipal securities dealer and the nature of and basis for such proposed action and (iij consult with such appropriate regulatory agency concerning the enect of such proposed action on sound banking practices and the feasibility and desirability of coordinating such action with any proceeding or proposed proceeding by such appropriate regulatory agency against such municipal securities dealer or associated person. (B) The appropriate regulatory agency for a municipal securities dealer (if other than the Commission), prior to the entry of an order of investigation, or commencement of any proceedings, against such municipal securities dealer or person associated with such municipal securities dealer, for violation of any provision of this section, the rules of the Board, or the rules or regulations of the Commission pertaining to municipal securities dealers, persons associated with municipal securities dealers, or transactions in municipal securities shall (i) give notice to the Commission of the identity of such municipal securities dealer or person associated with such municipal securities dealer and the nature of and basis for such proposed action and (ii) consult with the Commission concerning the effect of such proposed action on the protection of investors and the feasibility and desirability of coordinating such action with any proceeding or proposed proceeding by the Commission against such municipal securities dealer or associated person. (C) Nothing in this paragraph shall be construed to impair or limit (other than by the requirement of prior consultation) the power of the Commission or the appropriate regulatory agency for a municipal securities dealer to initiate any action of a class described in this paragraph or to affect in any way the power of the Commission or such appropriate regulatory agency to initiate any other action pursuant to this title or any other provision of law. "(7)(A) Tests required pursuant to subsection (b)(2)(A) (iii) of this section shall be administered by or on behalf of and periodic examinations pursuant to subsection (b)(2)(E) of this section shall be conducted by— "(i) a registered securities association, in the case of municipal securities brokers and municipal securities dealers who are members of such association; and "(ii) the appropriate regulatory agency for any municipal securities broker or municipal securities dealer, in the case of all other municipal securities brokers and municipal securities dealers. "(B) A registered securities association shall make a report of any examination conducted pursuant to subsection (b)(2)(E) of this section and promptly furnish the Commission a copy thereof and any

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Page:United States Statutes at Large Volume 89.djvu/197

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. 137

data supplied to it in connection with such examination. Subject to such limitations as the Commission, by rule, determines to be necessary or appropriate in the public interest or for the protection of investors, the Commission shall, on request, make available to the Board a copy of any report of an examination of a municipal securities broker or municipal securities dealer made by or furnished to the Commission pursuant to this paragraph or section 17(c)(3) of this title. Infra. "(8) The Commission is authorized, by order, if in its opinion such Board members action is necessary or appropriate in the public interest, for the pro- or employees, tection of investors, or otherwise, in furtherance of the purposes of this removal or title, to remove from office or censure any member or employee of the censure. Notice and Board, who, the Commission finds, on the record after notice and hearing. opportunity for hearing, has willfully (A) violated any provision of this title, the rules and regulations thereunder, or the rules of the Board or (B) abused his authority. "(d)(1) Neither the Commission nor the Board is authorized under this title, by rule or regulation, to require any issuer of municipal securities, directly or indirectly through a purchaser or prospective purchaser of securities from the issuer, to file with the Commission or the Board prior to the sale of such securities by the issuer any application, report, or document in connection with the issuance, sale, or distribution of such securities. "(2) The Board is not authorized under this title to require any issuer of municipal securities, directly or indirectly through a municipal securities broker or municipal securities dealer or otherwise, to furnish to the Board or to a purchaser or a prospective purchaser of such securities any application, report, document, or information with respect to such issuer: Provided, however., That the Board may require municipal securities brokers and municipal securities dealers to furnish to the Board or purchasers or prospective purchasers of municipal securities applications, reports, documents, and information with respect to the issuer thereof which is generally available from a source other than such issuer. Nothing in this paragraph shall be construed to impair or limit the power of the Commission under any provision of this title." S E C 14. Section 17 of the Securities Exchange Act of 1934 (15 Recordkeeping U.S.C. 78q) is amended by striking subsection (a), redesignating subsection (b) as subsection (g), and inserting the following as subsections (a), (b), (c), (d), (e), and (f): "(a)(1) Every national securities exchange, member thereof, broker or dealer who transacts a business in securities through the medium of any such member, registered securities association, registered broker or dealer, registered municipal securities dealer, registered securities information processor, registered transfer agent, and registered clearing agency and the Municipal Securities Rulemaking Board shall make and keep for prescribed periods such records, furnish such copies thereof, and make and disseminate such reports as the Commission, by rule, prescribes as necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this title. "(2) Every registered clearing agency shall also make and keep for prescribed periods such records, furnish such copies thereof, and make and disseminate such reports, as the appropriate regulatory agency for such clearing agency, by rule, prescribes as necessary or appropriate for the safeguarding of securities and funds in the custody or control of such clearing agency or for which it is responsible. "(3) Every registered transfer agent shall also make and keep for Copies. prescribed periods such records, furnish such copies thereof, and make

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Page:United States Statutes at Large Volume 89.djvu/198

 89 STAT. 138

Post, p. 141. Records, periodic examination.

Notice.

Ante, p. 97. Post, p. 146.

Report of examination.

PUBLIC LAW 94-29—JUNE 4, 1975 such reports as the appropriate regulatory agency for such transfer agent, by rule, prescribes as necessary or appropriate in furtherance of the purposes of section 17A of this title. "(b) All records of persons described in subsection (a) of this section are subject at any time, or from time to time, to such reasonable periodic, special, or other examinations by representatives of the Commission and the appropriate regulatory agency for such persons as the Commission or the appropriate regulatory agency for such persons deems necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this title: Provided, JKnoever^ That the Commission shall, prior to conducting any such examination of a registered clearing agency, registered transfer agent, or registered municipal securities dealer for which it is not the appropriate regulatory agency, give notice to the appropriate regulatory agency for such clearing agency, transfer agent, or municipal securities dealer of such proposed examination and consult with such appropriate regulatory agency concerning the feasibility and desirability of coordinating such examination with examinations conducted by such appropriate regulatory agency with a view to avoiding unnecessary regulatory duplication or imdue regulatory burdens for such clearing agency, transfer agent, or municipal securities dealer. Nothing in the proviso to the preceding sentence shall be construed to impair or limit (other than by the requirement of prior consultation) the power of the Commission under this subsection to examine any clearing agency, transfer agent, or municipal securities dealer or to affect in any way the power of the Commission under any other provision of this title or otherwise to inspect, examine, or investigate any such clearing agency, transfer agent, or municipal securities dealer. "(c)(1) Every clearing agency, transfer agent, and municipal securities dealer for which the Commission is not the appropriate regulatory agency shall (A) file with the appropriate regulatory agency for such clearing agency, transfer agent, or municipal securities dealer a copy of any application, notice, proposal, report, or document filed with the Commission by reason of its being a clearing agency, transfer agent, or municipal securities dealer and (B) file wnth the Commission a copy of any application, notice, proposal, report, or document filed with such appropriate regulatory agency by reason of its being a clearing agency, transfer agent, or municipal securities dealer. The Municipal Securities Rulemaking Board shall file with each agency enumerated in section 3(a) (34)(A) of this title copies of every proposed rule change filed with the Commission pursuant to section 19(b) of this title. "(2) The appropriate regulatory agency for a clearing agency, transfer agent, or municipal securities dealer for which the Commission is not the appropriate regulatory agency shall file with the Commission notice of the commencement of any proceeding and a copy of any order entered by such appropriate regulatory agency against such clearing agency, transfer agent, or municipal securities dealer, and the Commission shall file with such appropriate regulatory agency notice of the commencement of any proceeding and a copy of any order entered by the Commission against such clearing agency, transfer agent, or municipal securities dealer. "(3) The Commission and the appropriate regulatory agency for a clearing agency, transfer agent, or municipal securities dealer for which the Commission is not the appropriate regulatory agency shall each notify the other and make a report of any examination conducted by it of such clearing agency, transfer agent, or municipal securities

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Page:Hockey, Canada's Royal Winter Game.djvu/88

 that a forward who advances towards their goals will have two distinct men to pass, instead of two men, one directly and close, behind the other.

When two forwards approach their goals, the cover-point should devote his attention to the man who has the puck and block him as well as he may, and the point should advance slightly to meet the other, and, incidentally, to intercept any pass that may be attempted.

During a tussle behind or to the side of the goals, the point and cover-point should never leave their positions vacant. If the one leaves his place the other should remain in front, but never should both be away, because the absence of these two men from their proper positions is the cause of more games being lost, than any other fault they may commit.

"The position of the point man is essentially defensive. The distance between him and the goaler is determined by the proximity of the play. He should not stray too far from his place, because oftentimes he is practically a second goal-minder, able, through the practice that his position gives him, to stop almost equally well as the latter, but although he should remain close to his goal-keeper, he should never obstruct that man's view of the puck. Whenever it becomes necessary for the goaler to


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Page:United States Statutes at Large Volume 89.djvu/199

 PUBLIC LAW 94^29—JUNE 4, 1975 dealer, and, upon request, furnish to the other a copy of such report and any data supplied to it in connection with such examination. "(d)(1) The Commission, by rule or order, as it deems necessary or appropriate in the public interest and for the protection of investors, to foster cooperation and coordination among self-regulatory organizations, or to remove impediments to and foster the development of a national market system and national system for the clearance and settlement of securities transactions, may— " (A) with respect to any person who is a member of or participant in more than one self-regulatory organization, relieve any such self-regulatory organization of any responsibility under this title (i) to receive regulatory reports from such person, (ii) to examine such person for compliance, or to enforce compliance by such person, with specified provisions of this title, the rules and regulations thereunder, and its own rules, or (iii) to carry out other specified regulatory functions with respect to such person, and "(B) allocate among self-regulatory organizations the authority to adopt rules with respect to mattere as to which, in the absence of such allocation, such self-regulatory organizations share authority under this title. In making any such rule or entering any such order, the Commission shall take into consideration the regulatory capabilities and procedures of the self-regulatory organizations, availability of staff, convenience of location, unnecessary regulatory duplication, and such other factors as the Commission may consider germane to the protection of investors, cooperation and coordination among self-regulatory organizations, and the development of a national market system and a national system for the clearance and settlement of securities transactions. The Commission, by rule or order, as it deems necessary or appropriate in the public interest and for the protection of investors, may require any self-regulatory organization relieved of any responsibility pursuant to this paragraph, and any person with respect to whom such responsibility relates, to take such steps as are specified in any such rule or order to notify customers of, and persons doing business with, such pereon of the limited nature of such self-regulatory organization's responsibility for such person's acts, practices, and course of business. "(2) A self-regulatory organization shall furnish copies of any report of examination of any person who is a member of or a participant in such self-regulatory organization to any other self-regulatory organization of which such person is a member or in which such person is a participant upon the request of such person, such other self-regulatory organization, or the Commission. "(e)(1)(A) Every registered broker or dealer shall annually file with the Commission a balance sheet and income statement certified by an independent public accountant, prepared on a calendar or fiscal year basis, and such other financial statements (which shall, as the Commission specifies, be certified) and information concerning its financial condition as the Commission, by rule may prescribe as necessary or appropriate in the public interest or for the protection of investors. "(B) Every registered broker and dealer shall annually send to its customers its certified balance sheet and such other financial statements and information concerning its financial condition as the Commission, by rule, may prescribe pursuant to subsection (a) of this section.

89 STAT. 139

Self-regulatoiy organizations.

Filing of balance sheet and income statement.

Financial statements to customers.

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Page:Notes and Queries - Series 2 - Volume 5.djvu/103

 s. N 109., JAX. 30. '58.] NOTES AND QUERIES.

replaced on the lady's Lead, she expressed her obligations to the men, giving them each some money, and promised a piece of land (to be vested in certain persons in trust) to throw up a hood annually on old Christmas Day; she also ordered that the twelve men engaged to contest the race for the hood should be clothed (pro tem.) in scarlet jerkins and velvet caps: the hood to be thrown up in the same place as the one where she lost her's. The custom is yet followed; and though the Meeres on which she was riding has long ago been brought into a state of cultivation, and the road through been diverted, yet an old mill stands in the field where the old road passed through, and is pointed out as the place where the original scene took place, and the hood is usually thrown up from this mill. There is usually a great concourse of people from the neighbouring villages, who also take part in the proceedings; and when the hood is thrown up by the chief of the Boggons or by the officials, it becomes the object of the villagers to get the hood to their own village by throwing or kicking it, similar to the foot-ball the other eleven men, called Boggons, being stationed at the corners and sides of the field to prevent, if possible, its being thrown out of the field; and should it chance to fall into any of their hands it is "boggoned" and forthwith returned to the chief, who again throws it up from the mill as before. Whoever is fortunate enough to get it out of the field tries to get it to his village, and usually takes it to the public-house he is accustomed to frequent, and the landlord regales them with hot ale and rum. The game usually continues until dusk, and is frequently attended by broken shins and broken heads. I have known a man's leg broken. The next day is occupied by the boggons going round the villages singing as waits, and are regaled with hot furmenty; from some they get coppers given them, and from others a small measure of wheat, according to the means of the donors. The day after that they assume the character of plough bullocks, and at a certain part of Westwoodside they "smoke the fool," that is, straw is brought by those who like and piled on a heap, a rope being tied or slung over the branches of the tree next the pile of straw; the other end of the rope is fastened round the waist of the "fool," and he is drawn up, and fire is put to the straw, the "fool" being swung to and fro through the smoke until he is well nigh choked; after which he goes round with his cap and collects whatever the spectators think proper to give. After which the performance is at an end until the following year.

I shall be glad if the above information will suit your querist A. E. I forgot to say that the quantity of land left by Lady Mowbray was forty acres, which are known by the name of the Hoodlands, and that the Boggons' dresses and the hood are made from its proceeds.

.

STONEHENGE.

(2nd S. iv. 453. 499.)

I was at Stonehenge in the autumn of 1854. The very intelligent old man who acts as a sort of guide there, and who told me he had never been a day absent from the temple for twenty-four years, did not, as well as I recollect, make any mention of a recent fall of any of the triliths; and as I made a long journey (from Carlisle) solely to visit Stonehenge, and spent some hours on that most interesting spot, I do not think, if he had mentioned so remarkable an occurrence, it would have escaped my memory. With respect to the much disputed name of Stonehenge, not being an Anglo-Saxon scholar, I venture into the contest with much diffidence : still, as the name is allowed to be of Saxon origin, and as " Staenene hengen " means a stone gallows in that language, I think we may get a "glimpse of truth." The stone gallows was, as is well known, a Saxon " insti- tution ; " and it seems to me not impossible that the Saxons, when they overran England, struck with the resemblance the triliths, then of course in a more perfect state, bore to their " domestic institution," may have called them by a name signifying the stone gallows. Of course any one who has visited the temple cannot for a moment suppose that the late Mr. Kemble, in his assertion that the stones were a grand set of gallows erected on some great occasion for the execution of a number of British chieftains, meant anything but a jeu d'esprit. (" N. & Q." 2 nd S. iii. 2.) If the triliths were set up as gallows, what was the inner circle of single stones set up for ? It is also a little curious that in the same paper a few lines before, he turns into ridicule the history of the murder of the British chieftains by llengisr, and immediately after gives it as his opinion that the stones were set up as the implements of a wholesale massacre of said British chieftains ! The " Gododin," the authenticity of which has been so fully established, seems to give the best account of what Stonehenge really was, viz. the great temple for the celebration of the Helio- Arkite worship ; that it was afterwards used as a place of solemn assembly : and that the famous or infamous massacre may have taken place there, as related by the traditions, is a matter the pro- bability of which those who are acquainted with British historical records and traditions, and who know how lotig Druidical customs have been mixed up with Christian observances among the ancient Britons and their descendants, may judge for themselves. FRANCIS ROBERT L)AVIES. Moyglas Mawr. [Mr. Kemble does not say they were "erected," but " served as gallowses " on some grand occasion. lie was discussing the name, and not the origin, of Stonehenge. ED. "N. &Q.]


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Page:United States Statutes at Large Volume 89.djvu/200

 89 STAT. 140 Exem]>tion.

Missing, lost, counterfeit, or stolen securities, reporting.

Fingerprints, submittal to Attorney General. Exemption.

National Crime Information Center facilities.

Delegation of authority.

PUBLIC LAW 94-29—JUNE 4, 1975 "(C) The Commission, by rule or order, may conditionally or unconditionally exempt any registered broker or dealer, or class of such brokers or dealers, from any provision of this paragraph if the Commission determines that such exemption is consistent with the public interest and the protection of investors. "(2) The Commission, by rule, as it deems necessary or appropriate in the public interest or for the protection of investors, may prescribe the form and content of financial statements filed pursuant to this title and the accounting principles and accounting standards used in their preparation. "(f)(1) Every national securities exchange, member thereof, registered securities association, broker, dealer, municipal securities dealer, registered transfer agent, registered clearing agency, participant therein, member of the Federal Reserve System, and bank whose deposits are insured by the Federal Deposit Insurance Corporation shall— "(A) report to the Commission or other person designated by the Commission such information about missing, lost, counterfeit, or stolen securities, in such form and within such time as the Commission, by rule, determines is necessary or appropriate in the public interest or for the protection of investors; such information shall be available on request for a reasonable fee, to any such exchange, member, association, broker, dealer, municipal securities deader, transfer agent, clearing agency, participant, member of the Federal Reserve System, or insured bank, and such other persons as the Commission, by rule, designates; and "(B) make such inquiry with respect to information reported pursuant to this subsection as the Commission, by rule, prescribes as necessary or appropriate in the public interest or for the protection of investors, to determine whether securities in their custody or control, for which they are responsible, or in which they are effecting, clearing, or settling a transaction have been reported as missing, lost, counterfeit, or stolen. " (2) Every member of a national securities exchange, broker, dealer, registered transfer agent, and registered clearing agency, shall require that each of its partners, directors, officers, and employees be fingerprinted and shall submit such fingerprints, or cause the same to be submitted, to the Attorney General of the United States for identification and appropriate processing. The Commission, by rule, may exempt from the provisions of this paragraph upon specified terms, conditions, and periods, any class of partners, directors, officers, or employees of any such member, broker, dealer, transfer agent, or clearing agency, if the Commission finds that such action is not inconsistent with the public interest or the protection of investors. "(3) In order to carry out the authority under paragraphs (1) and (2) above, the Commission or its designee may enter into agreement with the Attorney General to use the facilities of the National Crime Information Center ("NCIC") to receive, store, and disseminate information in regard to missing, lost, counterfeit, or stolen securities and to permit direct inquiry access to NCIC's file on such securities for the financial community. "(4) In regard to paragraphs (1), (2), and (3), above insofar as such paragraphs apply to any bank or member of the Federal Reserve System, the Commission may delegate its authority to: "(A) the Comptroller of the Currency as to national banks and banks operating under the Code of Law for the District of Columbia; "(B) the Federal Reserve Board in regard to any member of the Federal Reserve System which is not a national bank or a

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Page:United States Statutes at Large Volume 89.djvu/201

 PUBLIC LAW 94-29—JUNE 4, 1975

89 STAT. 141

bank operating under the Code of Law for the District of Cokimbia; and "(C) the Federal Deposit Insurance Corporation for any State bank which is insured by the Federal Deposit Insurance Corporation but which is not a member of the Federal Reserve System. "(5) The Commission shall encourage the insurance industry to require their insured to report expeditiously instances of missing, lost, counterfeit, or stolen securities to the Commission or to such other person as the Commission may, by ru^.e, designate to receive such information.". SEC. 15. The Securities Exchange Act of 1934 is amended by inserting after section 17 (15 U.S.C. 78q) the following new section: " N A T I O N A L S Y S T E M FOR C L E A R A N C E A N D SETTLEMENTo r SECURITIES

TRANSACTIONS

"SEC. 17A. (a)(1) The Congress finds that— 15 USC 78q.l. "(A) The prompt and accurate clearance and settlement of securities transactions, including the transfer of record ownership and the safeguarding of securities and funds related thereto, are necessary for the protection of investors and persons facilitating transactions by and acting on behalf of investors. "(B) Inefficient procedures for clearance and settlement impose unnecessary costs on investors and persons facilitating transactions by and acting on behalf of mvesitors. " ( C j New data processing and communications techniques create the opportunity for more efficient, effective, and safe procedures for clearance and settlement. "(D) The linking of all clearance and settlement facilities and the development of uniform standards and procedures for clearance and settlement will reduce unnecessary costs and increase the protection of investors and persons facilitating transactions by and acting on behalf of investors. "(2) The Commission is directed, therefore, having due regard for the public interest, the protection of investors, the safeguarding of securities and funds, and maintenance of fair competition among brokers and dealers, clearing agencies, and transfer agents, to use its authority under this title to facilitate the establishment of a national system for the prompt and accurate clearance and settlement of transactions in securities (other than exempted securities) in accordance with the findings and to carry out the objectives set forth in paragraph (1) of this subsection. The Commission shall use its authority under this title to assure equal regulation under this title of registered clearing agencies and registered transfer agents. "(b)(1) Except as otherwise provided in this section, it shall be Mails or unlawful for any clearing agency, unless registered in accordance instrumentality of with this subsection, directly or indirectly, to make use of the mails interstate or any means or instrumentality of interstate commerce to perform commerce, the functions of a clearing agency with respect to any security (other prohibition, use. than an exempted security). The Commission, by rule or order, upon Exemption its own motion or upon application, may conditionally or unconditionally exempt any clearing agency or security or any class of clearing agencies or securities from any provisions of this section or the rules or regulations thereunder, if the Commission finds that such exemption is consistent with the public interest, the protection of investors, and the purposes of this section, including the prompt and accurate clearance and settlement of securities transactions and the safeguarding of securities and funds. A clearing agency or transfer

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Page:United States Statutes at Large Volume 89.djvu/202

 89 STAT. 142

Post, p. 146.

Registration requirements.

Ante, p. 137. Post, p. 146.

PUBLIC LAW 94-29—JUNE 4, 1975 agent shall not perform the functions of both a clearing agency and a transfer agent unless such clearing agency or transfer agent is registered in accordance with this subsection and subsection (c) of this section. " (2) A clearing agency may be registered under the terms and conditions hereinafter provided in this subsection 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 clearing agency and such other information and documents as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the prompt and accurate clearance and settlement of securities transactions. "(3) A clearing agency shall not be registered unless the Commission determines that— "(A) Such clearing agency is so organized and has the capacity to be able to facilitate the prompt and accurate clearance and settlement of securities transactions for which it is responsible, to safeguard securities and funds in its custody or control or for which it is responsible, to comply with the provisions of this title and the rules and regulations thereunder, to enforce (subject to any rule or order of the Commission pursuant to section 17(d) or 19(g)(2) of this title) compliance by its participants with the rules of the clearing agency, and to carry out the purposes of this section. "(B) Subject to the provisions of paragraph (4) of this subsection, the rules of the clearing agency provide that any (i) registered broker or dealer, (ii) other registered clearing agency, (iii) registered investment company, (iv) bank, (v) insurance company, or (vi) other person or class of persons as the Commission, by rule, may from time to time designate as appropriate to the development of a national system for the prompt and accurate clearance and settlement of securities transactions may become a participant in such clearing agency. "(C) The rules of the clearing agency assure a fair representation of its shareholders (or members) and participants in the selection of its directors and administration of its affairs. (The Commission may determine that the representation of participants is fair if they are afforded a reasonable opportunity to acquire voting stock of the clearing agency, directly or indirectly, in reasonable proportion to their use of such clearing agency.) "(D) The rules of the clearing agency provide for the equitable allocation of reasonable dues, fees, and other charges among its participants. " (E) The rules of the clearing agency do not impose any schedule of prices, or fix rates or other fees, for services rendered by its participants. " (F) The rules of the clearing agency are designed to promote the prompt and accurate clearance and settlement of securities transactions, to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible, to foster cooperation and coordination with persons engaged in the clearance and settlement of securities transactions, to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions, and, in general, to protect investors and the f)ublic interest; and are not designed to permit unfair discrimination in the admission of participants or among

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Page:United States Statutes at Large Volume 89.djvu/203

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89 STAT. 143

participants in the use of the clearing agency, or to regulate by virtue of any authority conferred by this title matters not related to the purposes of this section or the administration of the clearing agency. "(G) The rules of the clearing agency provide that (subject to any rule or order of the Commission pursuant to section 17(d) •^"•^^' P- 137. or 19(g)(2) of this title) its participants shall be appropriately Post, p. 146. disciplined for violation of any provision of the rules of the clearing agency by expulsion, suspension, limitation of activities, functions, and operations, fine, censure, or any other fitting sanction. " (H) The rules of the clearing agency are in accordance with the provisions of paragraph (5) of this subsection, and, in general, provide a fair procedure with respect to the disciplining of participants, the denial of participation to any person seeking participation therein, and the prohibition or limitation by the clearing agency of any person with respect to access to services offered by the clearing agency. " (I) The rules of the clearing agency do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of this title. "(4)(A) A registered clearing agency may, and in cases in which Denial of the Commission, by order, directs as appropriate in the public interest participation. shall, deny participation to any person subject to a statutory disqualification. A registered clearing agency shall file notice with the Notice. Commission not less than thirty days prior to admitting any person to participation, if the clearing agency 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. "(B) A registered clearing agency may deny participation to, or condition the participation of, any person if such person does not meet such standards of financial responsibility, operational capability, experience, and competence as are prescribed by the rules of the clearing agency. A registered clearing agency may examine and Examination and verify the qualifications of an applicant to be a participant in accord- verification. ance with procedures established by the rules of the clearing agency. "(5)(A) In any proceeding by a registered clearing agency to Notice. determine whether a participant should be disciplined (other than a summary proceeding pursuant to subparagraph (C) of this paragraph), the clearing agency shall bring specific charges, notify such participant of, and give him an opportunity to defend against such charges, and keep a record. A determination by the clearing agency to impose a disciplinary sanction shall be supported by a statement setting forth— "(i) any act or practice in which such participant has been found to have engaged, or which such participant has been found to have omitted; "(ii) the specific provisions of the rules of the clearing agency which any such act or practice, or omission to act, is deemed to violate; and "(iii) the sanction imposed and the reasons therefor. "(B) In any proceeding by a registered clearing agency to deter- Notice and mine whether a person shall be denied participation or prohibited or hearing, limited with respect to access to services offered by the clearing agency, the clearing agency shall notify such person of, and give him an opportunity to be heard upon, the specific grounds for denial or

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Page:United States Statutes at Large Volume 89.djvu/204

 89 STAT. 144

Summary suspension.

Hearing.

Stay of suspension.

Use of mails or instrumentality of interstate commerce, prohibition.

15 USC 78/.

Transfer agents registration.

Denial. Notice and hearing.

PUBLIC LAW 94-29—JUNE 4, 1975 prohibition or limitation under consideration and keep a record. A determination by the clearing agency to deny participation or prohibit or limit a person with respect to access to services offered by the clearing agency shall be supported by a statement setting forth the specific grounds on which the denial or prohibition or limitation is based. "(C) A registered clearing agency may summarily suspend and close the accounts of a participant who (i) has been and is expelled or suspended from any self-regulatory organization, (ii) is in default of any delivery of funds or securities to the clearing agency, or (iii) is in such financial or operating difficulty that the clearing agency determines and so notifies the appropriate regulatory agency for such participant that such suspension and closing of accounts are necessary for the protection of the clearing agency, its participants, creditors, or investors. A participant so summarily suspended shall be promptly afforded an opportunity for a hearing by the clearing agency in accordance with the provisions of subparagraph (A) of this paragraph. The appropriate regulatory agency for such participant, by order, may stay any such summary suspension on its own motion or upon application by any person aggrieved thereby, if such appropriate regulatory agency 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 protection of investors. " (6) No registered clearing agency shall prohibit or limit access by any person to services offered by any participant therein. "(c)(1) Except as otherwise provided in this section, it shall be unlawful for any transfer agent, unless registered in accordance with this section, directly or indirectly, to make use of the mails or any means or instrumentality of interstate commerce to perform the function of a transfer agent with respect to any security registered under section 12 of this title or which would be required to be registered except for the exemption from registration provided by subsection (g)(2)(B) or (g)(2)(G) of that section. The appropriate regulatory agency, by rule or order, upon its own motion or upon application, may conditionally or unconditionally exempt any person or security or class of persons or securities from any provision of this section or any rule or regulation prescribed under this section, if the appropriate regulatory agency finds (A) that such exemption is in the public interest and consistent with the protection of investors and the purposes of this section, including the prompt and accurate clearance and settlement of securities transactions and the safeguarding of securities and funds, and (B) the Commission does not object to such exemption. "(2) A transfer agent may be registered by filing with the appropriate regulatory agency for such transfer agent an application for registration in such form and containing such information and documents concerning such transfer agent as such appropriate regulatory agency may prescribe as necessary or appropriate in furtherance of the purposes of this section. Except as hereinafter provided, such registration shall become effective thirty days after receipt of such application by such appropriate regulatory agency or within such shorter period of time as such appropriate regulatory agency may determine. "(3)(A) The appropriate regulatory agency for a transfer agent, by order, shall deny registration to, censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding twelve months, or revoke the registration of such transfer agent, if such appropriate regulatory agency finds, on the record after notice

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