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, nationally recognized statistical rating organization, 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.
Any report that a nationally recognized statistical rating organization is required by Commission
rules under this paragraph to make and disseminate to the Commission shall be deemed furnished to the Commission.
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.
Every registered transfer agent shall also make and
keep for prescribed periods such records, furnish such copies thereof,
and make 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.
Records subject to examination
Procedures for cooperation with other agencies
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, however,
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 undue regulatory burdens for such clearing
agency, transfer agent, or municipal securities dealer; or
broker or dealer registered pursuant to section
15(b)(11), exchange registered pursuant to section
6(g), or national securities association registered pursuant to
section 15A(k) gives notice to the Commodity
Futures Trading Commission of such proposed examination and consults
with the Commodity Futures Trading Commission concerning the feasibility
and desirability of coordinating such examination with examinations
conducted by the Commodity Futures Trading Commission in order to
avoid unnecessary regulatory duplication or undue regulatory burdens
for such broker or dealer or exchange.
Furnishing data and reports to CFTC
The Commission shall notify the Commodity Futures Trading Commission of
any examination conducted of any broker or dealer registered pursuant
to section 15(b)(11), exchange registered pursuant to section 6(g), or
national securities association registered pursuant to section 15A(k)
and, upon request, furnish to the Commodity Futures Trading Commission
any examination report and data supplied to, or prepared by, the Commission
in connection with such examination.
Use of CFTC reports
Prior to conducting an examination under paragraph (1), the Commission
shall use the reports of examinations, if the information available therein
is sufficient for the purposes of the examination, of--
any broker or dealer registered pursuant to
section 15(b)(11);
exchange registered pursuant to section 6(g);
or
national securities association registered pursuant
to section 15A(k);
that is made by the Commodity Futures Trading Commission, a national securities
association registered pursuant to section 15A(k), or an exchange registered
pursuant to section 6(g).
Rules of construction
Notwithstanding any other provision of this
subsection, the records of a broker or dealer registered pursuant
to section 15(b)(11), an exchange registered
pursuant to section 6(g), or a national
securities association registered pursuant to section
15A(k) described in this subparagraph shall not be subject to
routine periodic examinations by the Commission.
Any recordkeeping rules adopted under this subsection
for a broker or dealer registered pursuant to section 15(b)(11), an
exchange registered pursuant to section 6(g), or a national securities
association registered pursuant to section 15A(k) shall be limited
to records with respect to persons, accounts, agreements, contracts,
and transactions involving security futures products.
Nothing in the proviso in paragraph (1) 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.
Copies of reports filed with other regulatory agencies
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 with 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) copies of every proposed rule change filed with the Commission
pursuant to section 19(b).
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 any clearing agency, transfer
agent, municipal securities dealer, or person associated with a transfer
agent or municipal securities dealer, and the Commission shall file with
such appropriate regulatory agency, if any, notice of the commencement
of any proceeding and a copy of any order entered by the Commission against
the clearing agency, transfer agent, or municipal securities dealer, or
against any person associated with a transfer agent or municipal securities
dealer for which the agency is the appropriate regulatory agency.
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 dealer,
and, upon request, furnish to the other a copy of such report and any
data supplied to it in connection with such examination.
The Commission or the appropriate regulatory agency
may specify that documents required to be filed pursuant to this subsection
with the Commission or such agency, respectively, may be retained by the
originating clearing agency, transfer agent, or municipal securities dealer,
or filed with another appropriate regulatory agency. The Commission or
the appropriate regulatory agency (as the case may be) making such a specification
shall continue to have access to the document on request.
Self-regulatory organizations
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--
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
allocate among self-regulatory organizations
the authority to adopt rules with respect to matters 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 person of the limited nature of such self-regulatory
organization's responsibility for such person's acts, practices, and course
of business.
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.
Balance sheet and income statement; other financial statements
and information
Every registered broker or dealer shall annually
file with the Commission a balance sheet and income statement certified
by a registered public accounting firm, 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.
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.
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.
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.
Missing, lost, counterfeit, and stolen securities
Every national securities exchange, member thereof,
registered securities association, broker, dealer, municipal securities
dealer, government securities broker, government 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--
report to the Commission or other person designated
by the Commission and, in the case of securities issued pursuant to
chapter 31 of Title 31, United States Code [government securities],
to the Secretary of the Treasury 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 dealer,
government securities broker, government securities dealer, 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
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.
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. Notwithstanding any other provision of law,
in providing identification and processing functions, the Attorney General
shall provide the Commission and self-regulatory organizations designated
by the Commission with access to all criminal history record information.
In order to carry out the authority under paragraph
(1) 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.
In order to carry out the authority under paragraph
(1) of this subsection, the Commission or its designee and the Secretary
of the Treasury shall enter into an agreement whereby the Commission
or its designee will receive, store, and disseminate information in
the possession, and which comes into the possession, of the Department
of the Treasury in regard to missing, lost, counterfeit, or stolen
securities.
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:
the Comptroller of the Currency as to national
banks;
the Federal Reserve Board in regard to any member
of the Federal Reserve System which is not a national bank; and
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.
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 rule, designate to receive such information.
Persons extending credit
Any broker, dealer, or other person extending credit who is subject to the
rules and regulations prescribed by the Board of Governors of the Federal
Reserve System pursuant to this title shall make such reports to the Board
as it may require as necessary or appropriate to enable it to perform the
functions conferred upon it by this title. If any such broker, dealer, or
other person shall fail to make any such report or fail to furnish full information
therein, or, if in the judgment of the Board it is otherwise necessary, such
broker, dealer, or other person shall permit such inspections to be made by
the Board with respect to the business operations of such broker, dealer,
or other person as the Board may deem necessary to enable it to obtain the
required information.
Risk assessment for holding company systems
Obligations to obtain, maintain, and report information
Every person who is (A) a registered broker or dealer, or (B) a registered
municipal securities dealer for which the Commission is the appropriate
regulatory agency, shall obtain such information and make and keep such
records as the Commission by rule prescribes concerning the registered
person's policies, procedures, or systems for monitoring and controlling
financial and operational risks to it resulting from the activities of
any of its associated persons, other than a natural person. Such records
shall describe, in the aggregate, each of the financial and securities
activities conducted by, and the customary sources of capital and funding
of, those of its associated persons whose business activities are reasonably
likely to have a material impact on the financial or operational condition
of such registered person, including its net capital, its liquidity, or
its ability to conduct or finance its operations. The Commission, by rule,
may require summary reports of such information to be filed with the Commission
no more frequently than quarterly.
Authority to require additional information
If, as a result of adverse market conditions or based on reports provided
to the Commission pursuant to paragraph (1) of this subsection or other
available information, the Commission reasonably concludes that it has
concerns regarding the financial or operational condition of (A) any registered
broker or dealer, or (B) any registered municipal securities dealer, government
securities broker, or government securities dealer for which the Commission
is the appropriate regulatory agency, the Commission may require the registered
person to make reports concerning the financial and securities activities
of any of such person's associated persons, other than a natural person,
whose business activities are reasonably likely to have a material impact
on the financial or operational condition of such registered person. The
Commission, in requiring reports pursuant to this paragraph, shall specify
the information required, the period for which it is required, the time
and date on which the information must be furnished, and whether the information
is to be furnished directly to the Commission or to a self-regulatory
organization with primary responsibility for examining the registered
person's financial and operational condition.
Special provisions with respect to associated persons
subject to Federal banking agency regulation
Cooperation in implementation
In developing and implementing reporting requirements pursuant to
paragraph (1) of this subsection with respect to associated persons
subject to examination by or reporting requirements of a Federal banking
agency, the Commission shall consult with and consider the views of
each such Federal banking agency. If a Federal banking agency comments
in writing on a proposed rule of the Commission under this subsection
that has been published for comment, the Commission shall respond
in writing to such written comment before adopting the proposed rule.
The Commission shall, at the request of the Federal banking agency,
publish such comment and response in the Federal Register at the time
of publishing the adopted rule.
Use of banking agency reports
A registered broker, dealer, or municipal securities dealer shall
be in compliance with any recordkeeping or reporting requirement adopted
pursuant to paragraph (1) of this subsection concerning an associated
person that is subject to examination by or reporting requirements
of a Federal banking agency if such broker, dealer, or municipal securities
dealer utilizes for such recordkeeping or reporting requirement copies
of reports filed by the associated person with the Federal banking
agency pursuant to section 5211 of the Revised Statutes [12 USCS §
161], section 9 of the Federal Reserve Act [12 USCS §§ 321 et seq.],
section 7(a) of the Federal Deposit Insurance Act [12 USCS § 1817(a)],
section 10(b) of the Home Owners' Loan Act [12 USCS § 1467a(b)], or
section 8 of the Bank Holding Company Act of 1956 [12 USCS § 1847].
The Commission may, however, by rule adopted pursuant to paragraph
(1), require any broker, dealer, or municipal securities dealer filing
such reports with the Commission to obtain, maintain, or report supplemental
information if the Commission makes an explicit finding that such
supplemental information is necessary to inform the Commission regarding
potential risks to such broker, dealer, or municipal securities dealer.
Prior to requiring any such supplemental information, the Commission
shall first request the Federal banking agency to expand its reporting
requirements to include such information.
Procedure for requiring additional information
Prior to making a request pursuant to paragraph (2) of this subsection
for information with respect to an associated person that is subject
to examination by or reporting requirements of a Federal banking agency,
the Commission shall--
notify such agency of the information
required with respect to such associated person; and
consult with such agency to determine
whether the information required is available from such agency
and for other purposes, unless the Commission determines that
any delay resulting from such consultation would be inconsistent
with ensuring the financial and operational condition of the broker,
dealer, municipal securities dealer, government securities broker,
or government securities dealer or the stability or integrity
of the securities markets.
Exclusion for examination reports
Nothing in this subsection shall be construed to permit the Commission
to require any registered broker or dealer, or any registered municipal
securities dealer, government securities broker, or government securities
dealer for which the Commission is the appropriate regulatory agency,
to obtain, maintain, or furnish any examination report of any Federal
banking agency or any supervisory recommendations or analysis contained
therein.
Confidentiality of information provided
No information provided to or obtained by the Commission from any
Federal banking agency pursuant to a request by the Commission under
subparagraph (C) of this paragraph regarding any associated person
which is subject to examination by or reporting requirements of a
Federal banking agency may be disclosed to any other person (other
than a self regulatory organization), without the prior written approval
of the Federal banking agency. Nothing in this subsection shall authorize
the Commission to withhold information from Congress, or prevent the
Commission from complying with a request for information from any
other Federal department or agency requesting the information for
purposes within the scope of its jurisdiction, or complying with an
order of a court of the United States in an action brought by the
United States or the Commission.
Notice to banking agencies concerning financial
and operational condition concerns
The Commission shall notify the Federal banking agency of any concerns
of the Commission regarding significant financial or operational risks
resulting from the activities of any registered broker or dealer,
or any registered municipal securities dealer, government securities
broker, or government securities dealer for which the Commission is
the appropriate regulatory agency, to any associated person thereof
which is subject to examination by or reporting requirements of the
Federal banking agency.
"Federal banking agency" defined
For purposes of this paragraph, the term "Federal banking agency"
shall have the same meaning as the term "appropriate Federal bank
agency" in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
1813(q)).
Exemptions
The Commission by rule or order may exempt any person or class of persons,
under such terms and conditions and for such periods as the Commission
shall provide in such rule or order, from the provisions of this subsection,
and the rules thereunder. In granting such exemptions, the Commission
shall consider, among other factors--
whether information of the type required under
this subsection is available from a supervisory agency (as defined
in section 3401(6) of Title 12), a State insurance commission or similar
State agency, the Commodity Futures Trading Commission, or a similar
foreign regulator;
the primary business of any associated person;
the nature and extent of domestic or foreign
regulation of the associated person's activities;
the nature and extent of the registered person's
securities activities; and
with respect to the registered person and its
associated persons, on a consolidated basis, the amount and proportion
of assets devoted to, and revenues derived from, activities in the
United States securities markets.
Authority to limit disclosure of information
Notwithstanding any other provision of law, the Commission shall not be compelled
to disclose any information required to be reported under this subsection, or
any information supplied to the Commission by any domestic or foreign regulatory
agency that relates to the financial or operational condition of any associated
person of a registered broker, dealer, government securities broker, government
securities dealer, or municipal securities dealer. Nothing in this subsection
shall authorize the Commission to withhold information from Congress, or prevent
the Commission from complying with a request for information from any other Federal
department or agency requesting the information for purposes within the scope
of its jurisdiction, or complying with an order of a court of the United States
in an action brought by the United States or the Commission. For purposes of section
552 of Title 5, this subsection shall be considered a statute described in subsection
(b)(3)(B) of such section 552. In prescribing regulations to carry out the requirements
of this subsection, the Commission shall designate information described in or
obtained pursuant to subparagraph (B) or (C) of paragraph (3) of this subsection
as confidential information for purposes of section 24(b)(2).
Investment bank holding companies
Elective supervision of an investment bank holding
company not having a bank or savings association affiliate
In general
An investment bank holding company that is not--
an affiliate of an insured bank (other
than an institution described in subparagraph (D), (F), or (G)
of section 1841(c)(2) of Title 12, or held under section 1843(f)
of Title 12), or a savings association;
a foreign bank, foreign company, or company
that is described in section 3106(a) of Title 12; or
a foreign bank that controls, directly
or indirectly, a corporation chartered under section 25A of the
Federal Reserve Act [12 U.S.C.A. § 611 et seq.],
may elect to become supervised by filing with the Commission a notice
of intention to become supervised, pursuant to subparagraph (B) of
this paragraph. Any investment bank holding company filing such a
notice shall be supervised in accordance with this section and comply
with the rules promulgated by the Commission applicable to supervised
investment bank holding companies.
Notification of status as a supervised investment
bank holding company
An investment bank holding company that elects under subparagraph
(A) to become supervised by the Commission shall file with the Commission
a written notice of intention to become supervised by the Commission
in such form and containing such information and documents concerning
such investment bank holding company as the Commission, by rule, may
prescribe as necessary or appropriate in furtherance of the purposes
of this section. Unless the Commission finds that such supervision
is not necessary or appropriate in furtherance of the purposes of
this section, such supervision shall become effective 45 days after
the date of receipt of such written notice by the Commission or within
such shorter time period as the Commission, by rule or order, may
determine.
Election not to be supervised by the Commission
as an investment bank holding company
Voluntary withdrawal
A supervised investment bank holding company that is supervised pursuant
to paragraph (1) may, upon such terms and conditions as the Commission
deems necessary or appropriate, elect not to be supervised by the
Commission by filing a written notice of withdrawal from Commission
supervision. Such notice shall not become effective until 1 year after
receipt by the Commission, or such shorter or longer period as the
Commission deems necessary or appropriate to ensure effective supervision
of the material risks to the supervised investment bank holding company
and to the affiliated broker or dealer, or to prevent evasion of the
purposes of this section.
Discontinuation of Commission supervision
If the Commission finds that any supervised investment bank holding
company that is supervised pursuant to paragraph (1) is no longer
in existence or has ceased to be an investment bank holding company,
or if the Commission finds that continued supervision of such a supervised
investment bank holding company is not consistent with the purposes
of this section, the Commission may discontinue the supervision pursuant
to a rule or order, if any, promulgated by the Commission under this
section.
Supervision of investment bank holding companies
Recordkeeping and reporting
In general
Every supervised investment bank holding company and each affiliate
thereof shall make and keep for prescribed periods such records,
furnish copies thereof, and make such reports, as the Commission
may require by rule, in order to keep the Commission informed
as to--
the company's or affiliate's activities,
financial condition, policies, systems for monitoring and
controlling financial and operational risks, and transactions
and relationships between any broker or dealer affiliate of
the supervised investment bank holding company; and
the extent to which the company
or affiliate has complied with the provisions of this title
and regulations prescribed and orders issued under this title.
Form and contents
Such records and reports shall be prepared in such form and according
to such specifications (including certification by a registered
public accounting firm), as the Commission may require and shall
be provided promptly at any time upon request by the Commission.
Such records and reports may include--
a balance sheet and income statement;
an assessment of the consolidated
capital of the supervised investment bank holding company;
an independent auditor's report
attesting to the supervised investment bank holding company's
compliance with its internal risk management and internal
control objectives; and
reports concerning the extent
to which the company or affiliate has complied with the provisions
of this title and any regulations prescribed and orders
issued under this title.
Use of existing reports
In general
The Commission shall, to the fullest extent possible, accept reports
in fulfillment of the requirements under this paragraph that the
supervised investment bank holding company or its affiliates have
been required to provide to another appropriate regulatory agency
or self-regulatory organization.
Availability
A supervised investment bank holding company or an affiliate of
such company shall provide to the Commission, at the request of
the Commission, any report referred to in clause (i).
Examination authority
Focus of examination authority
The Commission may make examinations of any supervised investment
bank holding company and any affiliate of such company in order
to--
inform the Commission regarding--
(aa) the nature of the operations and financial condition
of the supervised investment bank holding company and its
affiliates;
(bb) the financial and operational risks within the supervised
investment bank holding company that may affect any broker
or dealer controlled by such supervised investment bank holding
company; and
(cc) the systems of the supervised investment bank holding
company and its affiliates for monitoring and controlling
those risks; and
monitor compliance with the provisions
of this subsection, provisions governing transactions and
relationships between any broker or dealer affiliated with
the supervised investment bank holding company and any of
the company's other affiliates, and applicable provisions
of subchapter II of chapter 53, Title 31 [31 U.S.C.A. § 5311
et seq.] (commonly referred to as the "Bank Secrecy Act")
and regulations thereunder.
Restricted focus of examinations
The Commission shall limit the focus and scope of any examination
of a supervised investment bank holding company to--
the company; and
any affiliate of the company that,
because of its size, condition, or activities, the nature
or size of the transactions between such affiliate and any
affiliated broker or dealer, or the centralization of functions
within the holding company system, could, in the discretion
of the Commission, have a materially adverse effect on the
operational or financial condition of the broker or dealer.
Deference to other examinations
For purposes of this subparagraph, the Commission shall, to the
fullest extent possible, use the reports of examination of an
institution described in subparagraph (D), (F), or (G) of section
1841(c)(2) of Title 12, or held under section 1843(f) of Title
12, made by the appropriate regulatory agency, or of a licensed
insurance company made by the appropriate State insurance regulator.
Functional regulation of banking and insurance
activities of supervised investment bank holding companies
The Commission shall defer to--
the appropriate regulatory agency with regard
to all interpretations of, and the enforcement of, applicable banking
laws relating to the activities, conduct, ownership, and operations
of banks, and institutions described in subparagraph (D), (F), and
(G) of section 1841(c)(2) of Title 12, or held under section 1843(f)
of Title 12; and
the appropriate State insurance regulators with
regard to all interpretations of, and the enforcement of, applicable
State insurance laws relating to the activities, conduct, and operations
of insurance companies and insurance agents.
Definitions
For purposes of this subsection:
The term "investment bank holding company" means--
any person other than a natural person
that owns or controls one or more brokers or dealers; and
the associated persons of the investment
bank holding company.
The term "supervised investment bank holding
company" means any investment bank holding company that is supervised
by the Commission pursuant to this subsection.
The terms "affiliate", "bank", "bank holding
company", "company", "control", and "savings association" have the
same meanings as given in section 2 of the Bank Holding Company Act
of 1956 (12 U.S.C. 1841).
The term "insured bank" has the same meaning
as given in section 1813 of Title 12.
The term "foreign bank" has the same meaning
as given in section 3101(7) of Title 12.
The terms "person associated with an investment
bank holding company" and "associated person of an investment bank
holding company" mean any person directly or indirectly controlling,
controlled by, or under common control with, an investment bank holding
company.
Authority to limit disclosure of information
Notwithstanding any other provision of law, the Commission shall not be compelled
to disclose any information required to be reported under subsection (h) or (i)
or any information supplied to the Commission by any domestic or foreign regulatory
agency that relates to the financial or operational condition of any associated
person of a broker or dealer, investment bank holding company, or any affiliate
of an investment bank holding company. Nothing in this subsection shall authorize
the Commission to withhold information from Congress, or prevent the Commission
from complying with a request for information from any other Federal department
or agency or any self-regulatory organization requesting the information for purposes
within the scope of its jurisdiction, or complying with an order of a court of
the United States in an action brought by the United States or the Commission.
For purposes of section 552 of Title 5, this subsection shall be considered a
statute described in subsection (b)(3)(B) of such section 552. In prescribing
regulations to carry out the requirements of this subsection, the Commission shall
designate information described in or obtained pursuant to subparagraphs (A),
(B), and (C) of subsection (i)(3) of this section as confidential information
for purposes of section 24(b)(2).
Coordination of examining authorities
Elimination of duplication
The Commission and the examining authorities, through cooperation and
coordination of examination and oversight activities, shall eliminate
any unnecessary and burdensome duplication in the examination process.
Coordination of examinations
The Commission and the examining authorities shall share such information,
including reports of examinations, customer complaint information, and
other nonpublic regulatory information, as appropriate to foster a coordinated
approach to regulatory oversight of brokers and dealers that are subject
to examination by more than one examining authority.
Examinations for cause
At any time, any examining authority may conduct an examination for cause
of any broker or dealer subject to its jurisdiction.
Confidentiality
In general
Section 24 shall apply to the sharing of
information in accordance with this subsection. The Commission shall
take appropriate action under section 24(c) to ensure that such information
is not inappropriately disclosed.
Appropriate disclosure not prohibited
Nothing in this paragraph authorizes the Commission or any examining
authority to withhold information from the Congress, or prevent the
Commission or any examining authority from complying with a request
for information from any other Federal department or agency requesting
the information for purposes within the scope of its jurisdiction,
or complying with an order of a court of the United States in an action
brought by the United States or the Commission.
Definition
For purposes of this subsection, the term "examining authority" means
a self- regulatory organization registered with the Commission under this
title (other than a registered clearing agency) with the authority to
examine, inspect, and otherwise oversee the activities of a registered
broker or dealer.
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