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8000 - Miscellaneous Statutes and Regulations
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SECURITIES EXCHANGE ACT OF 1934
AN ACT
To provide for the regulation of securities exchanges and of
over-the-counter markets operating in interstate and foreign commerce
and through the mails, to prevent inequitable and unfair practices on
such exchanges and markets, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
TITLE I—REGULATION OF SECURITIES EXCHANGES
SHORT TITLE
SECTION 1. This Act may be cited as the "Securities
Exchange Act of 1934."
[Codified to 15 U.S.C. 78a]
[Source: Section 1 of the Act of June 6, 1934 (Pub. L. No. 291; 48
Stat. 881), effective July 1, 1934]
NOTE
Short titles of acts amending the Securities Exchange Act of
1934:
Section 1 of the Act of June 4, 1975 (Pub. L. No. 94-29; 89 Stat.
97) states that that Act may be cited as the "Securities Acts
Amendments of 1975".
Section 101 of title I of the Act of December 19, 1977 (Pub. L. No.
95-213; 91 Stat. 1494), states that said title I may be cited as the
"Foreign Corrupt Practices Act of 1977".
Section 201 of title II of the Act of December 19, 1977 (Pub. L. No.
95-213; 91 Stat. 1498), states that said title II may be cited as the
"Domestic and Foreign Investment Improved Disclosure Act of
1977".
NECESSITY FOR REGULATION AS PROVIDED IN THIS
TITLE
SEC. 2. For the reasons hereinafter enumerated, transactions
in securities as commonly conducted upon securities exchanges and
over-the-counter markets are affected with a national public interest
which makes it necessary to provide for regulation and control of such
transactions and of practices and matters related thereto, including
transactions by officers, directors, and principal security holders, to
require appropriate reports, to remove impediments to and perfect the
mechanisms of a national market system for securities and a national
system for the clearance and settlement of securities transactions and
the safeguarding of securities and funds related thereto, and to impose
requirements necessary to make such regulation and control reasonably
complete and effective, in order to protect interstate commerce, the
national credit, the Federal taxing power, to protect and make more
effective the national banking system and Federal Reserve System, and
to insure the maintenance of fair and honest markets in such
transactions:
(1) Such transactions (a) are carried on in large volume by the
public generally and in large part originate outside the States in
which the exchanges and over-the-counter markets are located and/or are
effected by means of the mails and instrumentalities of interstate
commerce; (b) constitute an important part of the current of interstate
commerce; (c) involve in large part the securities of issuers engaged
in interstate commerce; (d) involve the use of credit, directly affect
the financing of trade, industry, and transportation in interstate
commerce, and directly affect and influence the volume of interstate
commerce; and affect the national credit.
(2) The prices established and offered in such transactions are
generally disseminated and quoted throughout the United States and
foreign countries and constitute a basis for
{{6-30-83 p.9170}}determining and
establishing the prices at which securities are bought and sold, the
amount of certain taxes owing to the United States and to the several
states by owners, buyers, and sellers of securities, and the value of
collateral for bank loans.
(3) Frequently the prices of securities on such exchanges and
markets are susceptible to manipulation and control, and the
dissemination of such prices gives rise to excessive speculation,
resulting in sudden and unreasonable fluctuations in the prices of
securities which (a) cause alternately unreasonable expansion and
unreasonable contraction of the volume of credit available for trade,
transportation, and industry in interstate commerce, (b) hinder the
proper appraisal of the value of securities and thus prevent a fair
calculation of taxes owing to the United States and to the several
States by owners, buyers, and sellers of securities, and (c) prevent
the fair valuation of collateral for bank loans and/or obstruct the
effective operation of the national banking system and Federal Reserve
System.
(4) National emergencies, which produce widespread unemployment
and the dislocation of trade, transportation, and industry, and which
burden interstate commerce and adversely affect the general welfare,
are precipitated, intensified, and prolonged by manipulation and sudden
and unreasonable fluctuations of security prices and by excessive
speculation on such exchanges and markets, and to meet such emergencies
the Federal Government is put to such great expense as to burden the
national credit.
[Codified to 15 U.S.C. 78b]
[Source: Section 2 of the Act of June 6, 1934 (Pub. L. No. 291; 48
Stat. 881), effective July 1, 1934, as amended by section 2 of the Act
of June 4, 1975 (Pub. L. No. 94-29; 89 Stat. 97), effective June 4,
1975]
NOTES
Foreign Investment Study Act of 1974. The Act of October 26,
1974, the poplarly-titled "Foreign Investment Study Act of 1974",
(Pub. L. No. 93-479; 88 Stat. 1450-1454), effective October 26, 1974,
reads as follows:
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That this Act
may be cited as the "Foreign Investment Study Act of 1974".
SEC. 2. The Secretary of the Treasury and the Secretary of Commerce
are hereby authorized and directed to conduct a comprehensive, overall
study of foreign direct and portfolio investments in the United States.
SEC. 3. The Departments of Commerce and Treasury, in consultation
with appropriate agencies, shall determine the definitions and
limitations of direct and portfolio investments for the purposes of the
study authorized in section 2 of this Act.
SEC. 4 In carrying out the study described in section 2 of this
Act, the Secretary of Commerce and the Secretary of the
Treasury shall, respectively and jointly as may be appropriate--
(1) identify and collect such information as may be required to
carry out the study authorized in section 2 of this Act;
(2) consult with and secure information from (and where
appropriate the views of) representatives of industry, the financial
community, labor, agriculture, science and technology, academic
institutions, public interest organizations, and such other groups as
the Secretaries deem suitable; and
(3) consult and cooperate with other government agencies,
Federal, State, and local, and, to the extent appropriate, with foreign
governments and international organizations.
SEC. 5. The Secretary of Commerce shall carry out that part of the
study authorized in section 2 of this Act relating to foreign direct
investment, and shall, among other things, to the extent he determines
feasible, specifically--
(1) investigate and review the nature, scope, magnitude, and rate
of foreign direct investment activities in the United
States;
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(2) survey the reasons foreign firms are undertaking direct
investment in the United States;
(3) identify the processes and mechanisms through which foreign
direct investment flows into the United States, the financing methods
used by foreign direct investors, and the effects of such financing on
American financial markets;
(4) analyze the scope and significance of foreign direct
investment in acquisitions and takeovers of exisitng American
enterprises, the significance of such investments in the form of new
facilities or joint ventures with American firms, and the effects
thereof on domestic business competition;
(5) analyze the concentration and distribution of foreign direct
investment in specific geographic areas and economic sectors;
(6) analyze the effects of foreign direct investment on United
States national security, energy, natural resources, agriculture,
environment, real property holdings, balance of payments, balance of
trade, the United States international economic position, and various
significant American product markets;
(7) analyze the effect of foreign direct investment in terms of
employment opportunities and practices and the activities and influence
of foreign and American management executives employed by foreign
firms;
(8) analyze the effect of Federal, regional, State, and local
laws, rules, regulations, controls, and policies on foreign direct
investment activities in the United States;
(9) compare the purpose and effect of United States, State, and
local laws, rules, regulations, programs, and policies on foreign
direct investment in the United States with laws, rules, regulations,
programs, and policies of selected nations and areas where such
comparison may be informative;
(10) compare and contrast the foreign direct investment
activities in the United States with the investment activities of
American investors abroad and appraise the impact of such American
activities abroad on the investment activities and policies of foreign
firms in the United States;
(11) study the adequacy of information, disclosure, and reporting
requirements and procedures;
(12) determine the effects of variations between accounting,
financial reporting, and other business practices of American and
foreign investors or foreign investment activities in the United
States; and
(13) study and recommend means whereby information and statistics
on foreign direct investment activities can be kept current.
SEC. 6. The Secretary of the Treasury shall carry out that part of
the study authorized in section 2 of this Act relating to foreign
portfolio investment, and shall, to the extent he determines feasible,
specifically--
(1) investigate and review the nature, scope, and magnitude of
foreign portfolio investment activities in the United States;
(2) survey the reasons for foreign portfolio investment in the
United States;
(3) identify the processes and mechanisms through which foreign
portfolio investment is made in the United States, the financing
methods used, and the effects of foreign portfolio investment on
American financial markets;
(4) analyze the effects of foreign portfolio investment on the
United States balance of payments and the United States international
investment position;
(5) study and analyze the concentration and distribution of
foreign portfolio investment in specific United States economic
sectors;
(6) study the effect of Federal securities laws, rules,
regulations, and policies on foreign portfolio investment activities in
the United States;
(7) compare the purpose and effect of United States, State, and
local laws, rules, regulations, programs, and policies on foreign
portfolio investment in the United States with laws, rules,
regulations, programs, and policies of selected nations and areas where
such comparison may be informative;
(8) compare the foreign portfolio investment activities in the
United States with information available on the portfolio investment
activities of American investors abroad;
(9) study adequacy of information, disclosures, and reporting
requirements and procedures; and
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(10) study and recommend means whereby information and statistics
on foreign portfolio investment activities can be kept current.
POWERS
SEC. 7. (a) The Secretary of Commerce and the Secretary of
Treasury may each by regulation establish whatever rules each deems
necessary to carry out each of his functions under this Act.
(b) Each such Secretary may require any person subject to the
jurisdiction of the United States--
(1) to maintain a complete record of any information
(including journals or other books of original entry, minute books,
stock transfer records, lists of shareholders, or financial statements)
which such Secretary determines is germane to his functions in the
foreign direct investment and foreign portfolio investment studies to
be conducted pursuant to this Act; and
(2) to furnish under oath any report containing whatever
information such Secretary determines is necessary to carry out his
functions in such studies. Whenever an order under clause (2) of this
subsection requires a person to produce information which can be
specifically identified as being part of the records of its customers,
the Secretary shall, upon being provided the names and addresses of
such customers, send a notice to such customers that information from
their records will be disclosed pursuant to this Act; Provided,
That this requirement shall not apply when such person is directly
involved in the ownership or management of assets for the customer as
nominee, agent, partner, fiduciary, trustee, or in a similar
relationship.
The authority of each Secretary under this subsection shall expire on
the date provided under section 10 of this Act for the Secretary of
Commerce and the Secretary of the Treasury to submit a full and
complete report to the Congress.
(c) In addition to the Secretary of Commerce and the Secretary of
the Treasury, the only individuals who may have access to information
furnished under subsection (b)(2) are those sworn employees, including
consultants, of the Department of Commerce or Department of the
Treasury designated by the Secretary of either such Department. Neither
such Secretary nor any such employee may--
(1) use any information furnished under subsection (b)(2)
except for analytical or statistical purposes within the United States
Government; or
(2) publish, or make available to any other person in any
manner, any such information in a manner that the information furnished
under subsection (b)(2) by any person can be specifically identified,
except for the purposes of a proceeding under section 8.
Such Secretaries may exchange any such information furnished under
subsection (b)(2) in order to prevent any duplication or omission in
the studies conducted by each such Secretary pursuant to this Act.
(d) Except for the requirement under subsection (b)(2), no agency
of the United States or employee thereof may compel (1) the Secretary
of Commerce or the Secretary of the Treasury, (2) any individual
designated by either such Secretary under the first sentence of
subsection (c), or (3) any person which maintained or furnished any
report under subsection (b), to submit any such report or constituent
part thereof to that agency or any other agency of the United States.
Without the prior written consent of the person which maintained or
furnished any report under subsection (b) and without the prior written
consent of the customer, where the person maintained or furnished any
such report which included information identifiable as being derived
from the records of such customer, such report or any such constituent
part may not be produced for any judicial or administrative proceeding,
except for a proceeding under section 8(b) of this Act.
ENFORCEMENT
SEC. 8. (a) Whoever fails to furnish any information required
pursuant to the authority of this Act, whether required to be furnished
in the form of a report or otherwise, or to comply with any rule,
regulation, order, or instruction promulgated pursuant to the authority
of this Act may be assessed a civil penalty not exceeding $10,000 in a
proceeding brought under subsection (b) of this section.
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(b) Whenever it appears to either the Secretary of the
Treasury or the Secretary of Commerce that any person has failed to
furnish any information required pursuant to the provisions of this
Act, whether required to be furnished in the form of a report or
otherwise, or has failed to comply with any rule, regulation, order, or
instruction promulgated pursuant to the authority of this Act, such
Secretary may in his discretion bring an action, in the proper district
court of the United States or the proper United States court of any
territory or other place subject to the jurisdiction of the United
States, seeking a mandatory injunction commanding such person to comply
with such rule, regulation, order, or instruction, and upon a proper
showing by such Secretary of the relevance to the purposes of the Act
of such rule, regulation, order, or instruction, a permanent or
temporary injunction or restraining order shall be granted without
bond, and such person may also be subject to the civil penalty provided
in subsection (a) of this section if the judge finds that such penalty
is necessary to obtain compliance with such injunction or restraining
order.
(c) Whoever willfully fails to submit any information required
pursuant to this Act, whether required to be furnished in the form of a
report or otherwise, or willfully violates any rule, regulation, order,
or instruction promulgated pursuant to the authority of this Act shall,
upon conviction, be fined not more than $ 10,000 or, if a natural
person, may be imprisoned for not more than one year or both; and any
officer, director, or agent of any corporation who knowingly
participates in such violation may be punished by a like fine,
imprisonment, or both.
SEC. 9. (a) The Secretary of Commerce and the Secretary of the
Treasury may procure the temporary or intermittent services of
experts and consultants in accordance with the provisions of section
3109 of title 5, United States Code. Persons so employed shall receive
compensation at a rate to be fixed by the Secretaries concerned but not
in excess of the maximum amount payable under such section. While away
from his home or regular place of business and engaged in the
performance of services for the Department of Commerce or the
Department of the Treasury in conjunction with the provisions of this
Act, any such person may be allowed travel expenses, including per diem
in lieu of subsistence, as authorized by section 5703(b) of
title 5, United States Code, for persons in the Government
service employed intermittently.
(b) The Secretary of Commerce and the Secretary of the
Treasury are authorized, on a reimbursable basis when appropriate, to
use the available services, equipment, personnel, and facilities of any
agency or instrumentality of the Federal Government in conjunction with
the study authorized in this Act.
SEC. 10. The Secretary of Commerce and the Secretary of
the Treasury shall submit to the Congress an interim report twelve
months after the date of enactment of this Act, and not later than one
and one-half years after enactment of this Act, a full and complete
report of the findings made under the study authorized by this Act,
together with such recommendations as they consider appropriate.
SEC. 11. There is authorized to be appropriated a sum
not to exceed $3,000,000 to carry out the purposes of this Act. Any
funds so appropriated shall remain available until expended.
DEFINITIONS AND APPLICATION OF
TITLE
SEC. 3. (a) When used in this title, unless the context otherwise
requires--
(1) The term "exchange" means any organization,
association, or group of persons, whether incorporated or
unincorporated, which constitutes, maintains, or provides a market
place or facilities for bringing together purchasers and sellers of
securities or for otherwise performing with respect to securities the
functions commonly performed by a stock exchange as that term is
generally understood, and includes the market place and the market
facilities maintained by such exchange.
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(2) The term "facility" when used with respect to an
exchange includes its premises, tangible or intangible property whether
on the premises or not, any right to the use of such premises or
property or any service thereof for the purpose of effecting or
reporting a transaction on an exchange (including, among other things,
any system of communication to or from the exchange, by ticker or
otherwise, maintained by or with the consent of the exchange), and any
right of the exchange to the use of any property or service.
(3)(A) The term "member" when used with respect to a
national securities exchange means (i) any natural person permitted to
effect transactions on the floor of the exchange without the services
of another person acting as broker, (ii) any registered broker or
dealer with which such a natural person is associated, (iii) any
registered broker or dealer permitted to designate as a representative
such a natural person, and (iv) any other registered broker or dealer
which agrees to be regulated by such exchange and with respect to which
the exchange undertakes to enforce compliance with the provisions of
this title, the rules and regulations thereunder, and its own rules.
For purposes of sections (b)(1), 6(b)(4), 6(b)(6), 6(b)(7), 6(d),
17(d), 19(d), 19(e), 19(g), 19(h), and 21 of this title, the term
"member" when used with respect to a national securities exchange
also means, to the extent of the rules of the exchange specified by the
Commission, any person required by the Commission to comply with such
rules pursuant to section 6(f) of this title.
(B) The term "member" when used with respect to a
registered securities association means any broker or dealer who agrees
to be regulated by such association and with respect to whom the
association undertakes to enforce compliance with the provisions of
this title, the rules and regulations thereunder, and its own rules.
(4) BROKER.--
(A) IN GENERAL.--The term "broker" means any
person engaged in the business of effecting transactions in securities
for the account of others.
(B) EXCEPTION FOR CERTAIN BANK ACTIVITIES.--A bank shall
not be considered to be a broker because the bank engages in any one or
more of the following activities under the conditions described:
(i) THIRD PARTY BROKERAGE ARRANGEMENTS.--The bank enters
into a contractual or other written arrangement with a broker or dealer
registered under this title under which the broker or dealer offers
brokerage services on or off the premises of the bank if--
(I) such broker or dealer is clearly identified as the person
performing the brokerage services;
(II) the broker or dealer performs brokerage services in an area
that is clearly marked and, to the extent practicable, physically
separate from the routine deposit-taking activities of the bank;
(III) any materials used by the bank to advertise or promote
generally the availability of brokerage services under the arrangement
clearly indicate that the brokerage services are being provided by the
broker or dealer and not by the bank;
(IV) any materials used by the bank to advertise or promote
generally the availability of brokerage services under the arrangement
are in compliance with the Federal securities laws before distribution;
(V) bank employees (other than associated persons of a broker or
dealer who are qualified pursuant to the rules of a self-regulatory
organization) perform only clerical or ministerial functions in
connection with brokerage transactions including scheduling
appointments with the associated persons of a broker or dealer, except
that bank employees may forward customer funds or securities and may
describe in general terms the types of investment vehicles available
from the bank and the broker or dealer under the arrangement;
(VI) bank employees do not receive incentive compensation for any
brokerage transaction unless such employees are associated persons of a
broker or dealer and are qualified pursuant to the rules of a
self-regulatory organization, except that the bank employees may
receive compensation for the referral of any customer if the
compensation is a nominal one-time cash fee of a fixed dollar amount
and the payment of the fee is not contingent on whether the referral
results in a transaction;
{{12-30-99 p.9175}}
(VII) such services are provided by the broker or dealer on a
basis in which all customers that receive any services are fully
disclosed to the broker or dealer;
(VIII) the bank does not carry a securities account of the
customer except as permitted under clause (ii) or (viii) of this
subparagraph; and
(IX) the bank, broker, or dealer informs each customer that the
brokerage services are provided by the broker or dealer and not by the
bank and that the securities are not deposits or other obligations of
the bank, are not guaranteed by the bank, and are not insured by the
Federal Deposit Insurance Corporation.
(ii) TRUST ACTIVITIES.--The bank effects transactions in
a trustee capacity, or effects transactions in a fiduciary capacity in
its trust department or other department that is regularly examined by
bank examiners for compliance with fiduciary principles and standards,
and--
(I) is chiefly compensated for such transactions, consistent with
fiduciary principles and standards, on the basis of an administration
or annual fee (payable on a monthly, quarterly, or other basis), a
percentage of assets under management, or a flat or capped per order
processing fee equal to not more than the cost incurred by the bank in
connection with executing securities transactions for trustee and
fiduciary customers, or any combination of such fees; and
(II) does not publicly solicit brokerage business, other than by
advertising that it effects transactions in securities in conjunction
with advertising its other trust activities.
(iii) PERMISSIBLE SECURITIES TRANSACTIONS.--The bank
effects transactions in--
(I) commercial paper, bankers acceptances, or commercial bills;
(II) exempted securities;
(III) qualified Canadian government obligations as defined in
section 5136 of the Revised Statutes, in conformity with section 15C of
this title and the rules and regulations thereunder, or obligations of
the North American Development Bank; or
(IV) any standardized, credit enhanced debt security issued by a
foreign government pursuant to the March 1989 plan of then Secretary of
the Treasury Brady, used by such foreign government to retire
outstanding commercial bank loans.
(iv) CERTAIN STOCK PURCHASE PLANS.--
(I) EMPLOYEE BENEFIT PLANS.--The bank effects
transactions, as part of its transfer agency activities, in the
securities of an issuer as part of any pension, retirement,
profit-sharing, bonus, thrift, savings, incentive, or other similar
benefit plan for the employees of that issuer or its affiliates (as
defined in section 2 of the
Bank Holding Company Act of 1956), if the bank does not solicit
transactions or provide investment advice with respect to the purchase
or sale of securities in connection with the plan.
(II) DIVIDEND REINVESTMENT PLANS.--The bank effects
transactions, as part of its transfer agency activities, in the
securities of an issuer as part of that issuer's dividend reinvestment
plan, if--
(aa) the bank does not solicit transactions or provide investment
advice with respect to the purchase or sale of securities in connection
with the plan; and
(bb) the bank does not net shareholders' buy and sell orders,
other than for programs for odd-lot holders or plans registered with
the Commission.
(III) ISSUER PLANS.--The bank effects transactions, as
part of its transfer agency activities, in the securities of an issuer
as part of a plan or program for the purchase or sale of that issuer's
shares, if--
(aa) the bank does not solicit transactions or provide investment
advice with respect to the purchase or sale of securities in connection
with the plan or program; and
(bb) the bank does not net shareholders' buy and sell orders,
other than for programs for odd-lot holders or plans registered with
the Commission.
(IV) PERMISSIBLE DELIVERY OF MATERIALS.--The exception
to being considered a broker for a bank engaged in activities described
in subclauses (I), (II), and (III) will not be affected by delivery of
written or electronic plan materials by a bank to employees of the
issuer, shareholders of the issuer, or members of affinity groups of
the issuer, so long as such materials are--
{{12-30-99 p.9176}}
(aa) comparable in scope or nature to that permitted by the
Commission as of the date of the enactment of the Gramm-Leach-Bliley
Act; or
(bb) otherwise permitted by the Commission.
(v) SWEEP ACCOUNTS.--The bank effects transactions as
part of a program for the investment or reinvestment of deposit funds
into any no-load, open-end management investment company registered
under the Investment Company Act of 1940 that holds out as a money
market fund.
(vi) AFFILIATE TRANSACTIONS.--The bank effects
transactions for the account of any affiliate of the bank (as defined
in section 2 of the Bank
Holding Company Act of 1956) other than--
(I) a registered broker or dealer; or
(II) an affiliate that is engaged in merchant banking, as
described in section 4(k)(4)(H) of the Bank Holding Company Act of
1956.
(vii) PRIVATE SECURITIES OFFERINGS.--The bank--
(I) effects sales as part of a primary offering of securities not
involving a public offering, pursuant to
section 3(b),
4(2), or 4(6) of the Securities
Act of 1933 or the rules and regulations issued thereunder;
(II) at any time after the date that is 1 year after the date of
the enactment of the Gramm-Leach-Bliley Act, is not affiliated with a
broker or dealer that has been registered for more than 1 year in
accordance with this Act, and engages in dealing, market making, or
underwriting activities, other than with respect to exempted
securities; and
(III) if the bank is not affiliated with a broker or dealer, does
not effect any primary offering described in subclause (I) the
aggregate amount of which exceeds 25 percent of the capital of the
bank, except that the limitation of this subclause shall not apply with
respect to any sale of government securities or municipal securities.
(viii) SAFEKEEPING AND CUSTODY ACTIVITIES.--
(I) IN GENERAL.--The bank, as part of customary banking
activities--
(aa) provides safekeeping or custody services with respect to
securities, including the exercise of warrants and other rights on
behalf of customers;
(bb) facilitates the transfer of funds or securities, as a
custodian or a clearing agency, in connection with the clearance and
settlement of its customers' transactions in securities;
(cc) effects securities lending or borrowing transactions with or
on behalf of customers as part of services provided to customers
pursuant to division (aa) or (bb) or invests cash collateral pledged in
connection with such transactions;
(dd) holds securities pledged by a customer to another person or
securities subject to purchase or resale agreements involving a
customer, or facilitates the pledging or transfer of such securities by
book entry or as otherwise provided under applicable law, if the bank
maintains records separately identifying the securities and the
customer; or
(ee) serves as a custodian or provider of other related
administrative services to any individual retirement account, pension,
retirement, profit sharing, bonus, thrift savings, incentive, or other
similar benefit plan.
(II) EXCEPTION FOR CARRYING BROKER ACTIVITIES.--The
exception to being considered a broker for a bank engaged in activities
described in subclause (I) shall not apply if the bank, in connection
with such activities, acts in the United States as a carrying broker
(as such term, and different formulations thereof, are used in
section 15(c)(3) of this title
and the rules and regulations thereunder) for any broker or dealer,
unless such carrying broker activities are engaged in with respect to
government securities (as defined in paragraph (42) of this
subsection).
(ix) IDENTIFIED BANKING PRODUCTS.--The bank effects
transactions in identified banking products as defined in section 206
of the Gramm-Leach-Bliley Act.
(x) MUNICIPAL SECURITIES.--The bank effects transactions
in municipal securities.
(xi) DE MINIMIS EXCEPTION.--The bank effects, other than
in transactions referred to in clauses (i) through (x), not more than
500 transactions in securities in any
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such transactions are not effected by an employee of the bank who is
also an employee of a broker or dealer.
(C) EXECUTION BY BROKER OR DEALER.--The exception to
being considered a broker for a bank engaged in activities described in
clauses (ii), (iv), and (viii) of subparagraph (B) shall not apply if
the activities described in such provisions result in the trade in the
United States of any security that is a publicly traded security in the
United States, unless--
(i) the bank directs such trade to a registered broker or dealer
for execution;
(ii) the trade is a cross trade or other substantially similar
trade of a security that--
(I) is made by the bank or between the bank and an affiliated
fiduciary; and
(II) is not in contravention of fiduciary principles established
under applicable Federal or State law; or
(iii) the trade is conducted in some other manner permitted under
rules, regulations, or orders as the Commission may prescribe or issue.
(D) FIDUCIARY CAPACITY.--For purposes of subparagraph
(B)(ii), the term "fiduciary capacity" means--
(i) in the capacity as trustee, executor, administrator,
registrar of stocks and bonds, transfer agent, guardian, assignee,
receiver, or custodian under a uniform gift to minor act, or as an
investment adviser if the bank receives a fee for its investment
advice;
(ii) in any capacity in which the bank possesses investment
discretion on behalf of another; or
(iii) in any other similar capacity.
(E) Exception for entities subject to
section 15(e).--The term
"broker" does not include a bank that--
(i) was, on the day before the date of enactment of the
Gramm-Leach-Bliley Act, subject to section 15(e); and
(ii) is subject to such restrictions and requirements as the
Commission considers appropriate.
(F) JOINT RULEMAKING REQUIRED.--The Commission and the
Board of Governors of the Federal Reserve System shall jointly adopt a
single set of rules or regulations to implement the exceptions in
subparagraph (B).
(5) DEALER.--
(A) IN GENERAL.--The term "dealer" means any
person engaged in the business of buying and selling securities for
such person's own account through a broker or otherwise.
(B) Exception for person not engaged in the business of
dealing.--The term "dealer" does not include a person that
buys or sells securities for such person's own account, either
individually or in a fiduciary capacity, but not as a part of a regular
business.
(C) EXCEPTION FOR CERTAIN BANK ACTIVITIES.--A bank shall
not be considered to be a dealer because the bank engages in any of the
following activities under the conditions described:
(i) PERMISSIBLE SECURITIES TRANSACTIONS.--The bank buys
or sells--
(I) commercial paper, bankers acceptances, or commercial bills;
(II) exempted securities;
(III) qualified Canadian government obligations as defined in
section 5136 of the Revised Statutes of the United States, in
conformity with section 15C of
this title and the rules and regulations thereunder, or obligations of
the North American Development Bank; or
(IV) any standardized, credit enhanced debt security issued by a
foreign government pursuant to the March 1989 plan of then Secretary of
the Treasury Brady, used by such foreign government to retire
outstanding commercial bank loans.
(ii) Investment, trustee, and fiduciary
transactions.--The bank buys or sells securities for investment
purposes--
(I) for the bank; or
{{12-29-06 p.9176.02}}
(II) for accounts for which the bank acts as a trustee or
fiduciary.
(iii) ASSET-BACKED TRANSACTIONS.--The bank engages in
the issuance or sale to qualified investors, through a grantor trust or
other separate entity, of securities backed by or representing an
interest in notes, drafts, acceptances, loans, leases, receivables,
other obligations (other than securities of which the bank is not the
issuer), or pools of any such obligations predominantly originated by--
(I) the bank;
(II) an affiliate of any such bank other than a broker or dealer;
or
(III) a syndicate of banks of which the bank is a member, if the
obligations or pool of obligations consists of mortgage obligations or
consumer-related receivables.
(iv) IDENTIFIED BANKING PRODUCTS.--The bank buys or
sells identified banking products, as defined in section 206 of the
Gramm-Leach-Bliley Act.
(6) The term "bank" means (A) a banking institution
organized under the laws of the United States, or a Federal savings
association as defined in section 2(5) of the Home Owners' Loan Act,
(B) a member bank of the Federal Reserve System, (C) any other banking
institution or savings association, as defined in section 2(4) of the
Home Owners' Loan Act, whether incorporated or not, doing business
under the laws of any State or of the United States, a substantial
portion of the business of which consists of receiving deposits or
exercising fiduciary powers similar to those permitted to national
banks under the authority of the Comptroller of the Currency pursuant
to the first section of Public Law 87--722 (12 U.S.C. 92a), or Federal
authority having supervision over banks or savings associations, and
which is not operated for the purpose of evading the provisions of this
title, and (D) a receiver, conservator, or other liquidating agent of
any institution or firm included in clauses (A), (B), or (C) of this
paragraph.
(7) The term "director" means any director of a
corporation or any person performing similar functions with respect to
any organization, whether incorporated or unincorporated.
(8) The term "issuer" means any person who issues or
proposes to issue any security; except that with respect to
certificates of deposit for securities, voting-trust certificates, or
collateral-trust certificates, or with respect to certificates of
interest or shares in an unincorporated investment trust not having a
board of directors or of the fixed, restricted management, or unit
type, the term "issuer" means the person or persons performing
the acts and assuming the duties of depositor or manager pursuant to
the provisions of the trust or other agreement or instrument under
which such securities are issued; and except that with respect to
equipment-trust certificates or like securities, the term
"issuer" means the person by whom the equipment or property is,
or is to be, used.
(9) The term "person" means a natural person, company,
government, or political subdivision, agency, or instrumentality of a
government.
(10) The term "security" means any note, stock, treasury
stock, bond, debenture, certificate of interest or participation in any
profit-sharing agreement or in any oil, gas, or other mineral royalty
or lease, any collateral-trust certificate, preorganization certificate
or subscription, transferable share, investment contract, voting-trust
certificate, certificate of deposit for a security, and put, call,
straddle, option, or privilege on any security, certificate of deposit,
or group or index of securities (including any interest therein or
based on the value thereof), or any put, call, straddle, option, or
privilege entered into on a national securities exchange relating to
foreign currency, or in general, any instrument commonly known as a
"security"; or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, or warrant or right
to subscribe to or purchase, any of the foregoing; but shall not
include currency or any note, draft, bill of exchange, or banker's
acceptance which has a maturity at the time of issuance of not
exceeding nine months, exclusive of days of grace, or any renewal
thereof the maturity of which is likewise limited.
(11) The term "equity security" means any stock or similar
security; or any security convertible, with or without consideration,
into such a security, or carrying any warrant or right to subscribe to
or purchase such a security; or any such warrant or right; or any other
security which the Commission shall deem to be of similar nature and
consider necessary
{{12-29-06 p.9176.03}}or appropriate, by
such rules and regulations as it may prescribe in the public interest
or for the protection of investors, to treat as an equity security.
(12)(A) The term "exempted security" or "exempted
securities" includes--
(i) government securities, as defined in paragraph (42) of this
subsection;
(ii) municipal securities, as defined in paragraph (29) of this
subsection;
(iii) any interest or participation in any common trust fund or
similar fund that is excluded from the definition of the term
investment company' under section 3(c)(3) of the Investment Company
Act of 1940.
(iv) any interest or participation in a single trust fund, or a
collective trust fund maintained by a bank, or any security arising out
of a contract issued by an insurance company, which interest,
participation, or security is issued in connection with a qualified
plan as defined in subparagraph (C) of this paragraph;
(v) any security issued by or any interest or participation in
any pooled income fund, collective trust fund, collective investment
fund, or similar fund that is excluded from the definition of an
investment company under section
3(c)(10)(B) of the Investment Company Act of 1940;
(vi) solely for purposes of sections 12, 13, 14, and 16 of this
title, any security issued by or any interest or participation in any
church plan, company, or account that is excluded from the definition
of an investment company under section 3(c)(14) of the Investment
Company Act of 1940; and
(vii) such other securities (which may include, among others,
unregistered securities, the market in which is predominantly
intrastate) as the Commission may, by such rules and regulations as it
deems consistent with the public interest and the protection of
investors, either unconditionally or upon specified terms and
conditions or for stated periods, exempt from the operation of any one
or more provisions of this title which by their terms do not apply to
an "exempted security" or to "exempted securities".
(B)(i) Notwithstanding subparagraph (A)(i) of this paragraph,
government securities shall not be deemed to be "exempted
securities" for the purposes of section 17A of this title.
(ii) Notwithstanding subparagraph (A)(ii) of this paragraph,
municipal securities shall not be deemed to be "exempted
securities" for the purposes of sections 15 and 17A of this title.
(C) For purposes of subparagraph (A)(iv) of this paragraph, the
term "qualified plan" means (i) a stock bonus, pension, or
profit-sharing plan which meets the requirements for qualification
under section 401 of the Internal Revenue Code of 1954, (ii) an annuity
plan which meets the requirements for the deduction of the employer's
contribution under section 404(a)(2) of such Code, (iii) a governmental
plan as defined in section 414(d) of such Code which has been
established by an employer for the exclusive benefit of its employees
or their beneficiaries for the purpose of distributing to such
employees or their beneficiaries the corpus and income of the funds
accumulated under such plan, if under such plan it is impossible, prior
to the satisfaction of all liabilities with respect to such employees
and their beneficiaries, for any part of the corpus or income to be
used for, or diverted to, purposes other than the exclusive benefit of
such employees or their beneficiaries, or (iv) a church plan, company,
or account that is excluded from the definition of an investment
company under section 3(c)(14) of the Investment Company Act of 1940,
other than any plan described in clause (i), (ii), or (iii) of this
subparagraph which (I) covers employees some or all of whom are
employees within the meaning of section 401(c) of such Code, or (II) is
a plan funded by an annuity contract described in section 403(b) of
such Code.
(13) The terms "buy" and "purchase" each include any
contract to buy, purchase, or otherwise acquire.
(14) The terms "sale" and "sell" each include any
contract to sell or otherwise dispose of.
(15) The term "Commission" means the Securities and
Exchange Commission established by section 4 of this title.
{{12-29-06 p.9176.04}}
(16) The term "State" means any State of the United States,
the District of Columbia, Puerto Rico, the Philippine
Islands, 1
the Virgin Islands, or any other possession of the United States.
(17) The term "interstate commerce" means trade, commerce,
transportation, or communication among the several States, or between
any foreign country and any State, or between any State and any place
or ship outside thereof. The term also includes intrastate use of (A)
any facility of a national securities exchange or of a telephone or
other interstate means of communication, or (B) any other interstate
instrumentality.
(18) The term "person associated with a broker or dealer"
or "associated person of a broker or dealer" means any partner,
officer, director, or branch manager of such broker or dealer (or any
person occupying a similar status or performing similar functions), any
person directly or indirectly controlling, controlled by, or under
common control with such broker or dealer, or any employee of such
broker or dealer, except that any person associated with a broker or
dealer whose functions are solely clerical or ministerial shall not be
included in the meaning of such term for purposes of section 15(b) of
this title (other than paragraph (6) thereof).
(19) The terms "investment company", "affiliated
person", "insurance company", "separate account", and
"company" have the same meanings as in the Investment Company Act
of 1940.
(20) The terms "investment adviser" and "underwriter"
have the same meanings as in the Investment Advisers Act of 1940.
(21) The term "person associated with a member" or
"associated person of a member" when used with respect to a
member of a national securities exchange or registered securities
association means any partner, officer, director, or branch manager of
such member (or any person occupying a similar status or performing
similar functions), any person directly or indirectly controlling,
controlled by, or under common control with such member, or any
employee of such member.
(22)(A) The term "securities information processor" means
any person engaged in the business of (i) collecting, processing, or
preparing for distribution or publication, or assisting, participating
in, or coordinating the distribution or publication of, information
with respect to transactions in or quotations for any security (other
than an exempted security) or (ii) distributing or publishing (whether
by means of a ticker tape, a communications network, a terminal display
device, or otherwise) on a current and continuing basis, information
with respect to such transactions or quotations. The term
"securities information processor" does not include any bona fide
newspaper, news magazine, or business or financial publication of
general and regular circulation, any self-regulatory organization,
any bank, broker, dealer, building and loan, savings and loan, or
homestead association, or cooperative bank, if such bank, broker,
dealer, association, or cooperative bank would be deemed to be a
securities information processor solely by reason of functions
performed by such institutions as part of customary banking, brokerage,
dealing, association, or cooperative bank activities, or any common
carrier, as defined in section 3 of the Communications Act of 1934,
subject to the jurisdiction of the Federal Communications Commission or
a State commission, as defined in section 3 of that Act, unless the
Commission determines that such carrier is engaged in the business of
collecting, processing, or preparing for distribution or publication,
information with respect to transactions in or quotations for any
security.
(B) The term "exclusive processor" means any
securities information processor or self-regulatory organization which,
directly or indirectly, engages on an exclusive basis on behalf of any
national securities exchange or registered securities association, or
any national
{{4-29-05 p.9177}}securities exchange
or registered securities association which engages on an exclusive
basis on its own behalf, in collecting, processing, or preparing for
distribution or publication any information with respect to (i)
transactions or quotations on or effected or made by means of any
facility of such exchange or (ii) quotations distributed or published
by means of any electronic system operated or controlled by such
association.
(23)(A) The term "clearing agency" means any person who
acts as an intermediary in making payments or deliveries or both in
connection with transactions in securities or who provides facilities
for comparison of data respecting the terms of settlement of securities
transactions, to reduce the number of settlements of securities
transactions, or for the allocation of securities settlement
responsibilities. Such term also means any person, such as a securities
depository, who (i) acts as a custodian of securities in connection
with a system for the central handling of securities whereby all
securities of a particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred,
loaned, or pledged by bookkeeping entry without physical delivery of
securities certificates, or (ii) otherwise permits or facilitates the
settlement of securities transactions or the hypothecation or lending
of securities without physical delivery of securities certificates.
(B) The term "clearing agency" does not include (i) any
Federal Reserve bank, Federal home loan bank, or Federal land bank;
(ii) any national securities exchange or registered securities
association solely by reason of its providing facilities for comparison
of data respecting the terms of settlement of securities transactions
effected on such exchange or by means of any electronic system operated
or controlled by such association; (iii) any bank, broker, dealer,
building and loan, savings and loan, or homestead association, or
cooperative bank if such bank, broker, dealer, association, or
cooperative bank would be deemed to be a clearing agency solely by
reason of functions performed by such institution as part of customary
banking, brokerage, dealing, association, or cooperative banking
activities, or solely by reason of acting on behalf of a clearing
agency or a participant therein in connection with the furnishing by
the clearing agency of services to its participants or the use of
services of the clearing agency by its participants, unless the
Commission, by rule, otherwise provides as necessary or appropriate to
assure the prompt and accurate clearance and settlement of securities
transactions or to prevent evasion of this title; (iv) any life
insurance company, its registered separate accounts, or a subsidiary of
such insurance company solely by reason of functions commonly performed
by such entities in connection with variable annuity contracts or
variable life policies issued by such insurance company or its separate
accounts; (v) any registered open-end investment company or unit
investment trust solely by reason of functions commonly performed by it
in connection with shares in such registered open-end investment
company or unit investment trust, or (vi) any person solely by reason
of its performing functions described in paragraph 25(E) of this
subsection.
(24) The term "participant" when used with respect to a
clearing agency means any person who uses a clearing agency to clear or
settle securities transactions or to transfer, pledge, lend, or
hypothecate securities. Such term does not include a person whose only
use of a clearing agency is (A) through another person who is a
participant or (B) as a pledgee of securities.
(25) The term "transfer agent" means any person who engages
on behalf of an issuer of securities or on behalf of itself as an
issuer of securities in (A) countersigning such securities upon
issuance; (B) monitoring the issuance of such securities with a view to
preventing unauthorized issuance, a function commonly performed by a
person called a registrar; (C) registering the transfer of such
securities; (D) exchanging or converting such securities; or (E)
transferring record ownership of securities by bookkeeping entry
without physical issuance of securities certificates. The term
"transfer agent" does not include any insurance company or
separate account which performs such functions solely with respect to
variable annuity contracts or variable life policies which it issues or
any registered clearing agency which performs such functions solely
with respect to options contracts which it issues.
(26) The term "self-regulatory organization" means any
national securities exchange, registered securities association, or
registered clearing agency, or (solely for purposes of
{{4-29-05 p.9178}}sections
19(b), 19(c), and 23(b)
of this title) the Municipal Securities Rulemaking Board established by
section 15B of this title.
(27) The term "rules of an exchange", "rules of an
association", or "rules of a clearing agency" means the
constitution, articles of incorporation, bylaws, and rules, or
instruments corresponding to the foregoing, of an exchange, association
of brokers and dealers, or clearing agency, respectively, and such of
the stated policies, practices, and interpretations of such exchange,
association, or clearing agency as the Commission, by rule, may
determine to be necessary or appropriate in the public interest or for
the protection of investors to be deemed to be rules of such exchange,
association, or clearing agency.
(28) The term "rules of a self-regulatory organization"
means the rules of an exchange which is a national securities exchange,
the rules of an association of brokers and dealers which is a
registered securities association, the rules of a clearing agency which
is a registered clearing agency, or the rules of the Municipal
Securities Rulemaking Board.
(29) The term "municipal securities" means securities which
are direct obligations of, or obligations guaranteed as to principal or
interest by, a State or any political subdivision thereof, or any
agency or instrumentality of a State or any political subdivision
thereof, or any municipal corporate instrumentality or one or more
States, or any security which is an industrial development bond (as
defined in section 103(c)(2) of the Internal Revenue Code of 1954) the
interest on which is excludable from gross income under section
103(a)(1) of such Code if, by reason of the application of paragraph
(4) or (6) of section 103(c) of such Code (determined as if paragraphs
(4)(A), (5), and (7) were not included in such section 103(c)),
paragraph (1) of such section 103(c) does not apply to such security.
(30) The term "municipal securities dealer" means any
person (including a separately identifiable department or division of a
bank) engaged in the business of buying and selling municipal
securities for his own account, through a broker or otherwise, but does
not include--
(A) any person insofar as he buys or sells such securities for
his own account, either individually or in some fiduciary capacity, but
not as a part of a regular business; or
(B) a bank, unless the bank is engaged in the business of buying
and selling municipal securities for its own account other than in a
fiduciary capacity, through a broker or otherwise: Provided,
however, That if the bank is engaged in such business through a
separately identifiable department or division (as defined by the
Municipal Securities Rulemaking Board in accordance with section
15B(b)(2)(H) of this title), the department or division and not the
bank itself shall be deemed to be the municipal securities dealer.
(31) The term "municipal securities broker" means a broker
engaged in the business of effecting transactions in municipal
securities for the account of others.
(32) The term "person associated with a municipal securities
dealer" when used with respect to a municipal securities dealer
which is a bank or a division or department of a bank means any person
directly engaged in the management, direction, supervision, or
performance of any of the municipal securities dealer's activities with
respect to municipal securities, and any person directly or indirectly
controlling such activities or controlled by the municipal securities
dealer in connection with such activities.
(33) The term "municipal securities investment portfolio"
means all municipal securities held for investment and not for sale as
part of a regular business by a municipal securities dealer or by a
person, directly or indirectly, controlling, controlled by, or under
common control with a municipal securities dealer.
(34) The term "appropriate regulatory agency" means--
(A) When used with respect to a municipal securities dealer:
(i) the Comptroller of the Currency, in the case of a national
bank, or a subsidiary or a department or division of any such bank;
(ii) the Board of Governors of the Federal Reserve System, in the
case of a State member bank of the Federal Reserve System, a subsidiary
or a department or division thereof, a bank holding company, a
subsidiary of a bank holding company which is a bank
{{2-29-08 p.9179}}other than a bank
specified in clause (i), (iii) or (iv) of this subparagraph, or a
subsidiary or a department or division of such subsidiary;
(iii) the Federal Deposit Insurance Corporation, in the case of a
bank insured by the Federal Deposit Insurance Corporation (other than a
member of the Federal Reserve System), or a subsidiary or department or
division thereof;
(iv) the Director of the Office of Thrift Supervision, in the
case of a savings association (as defined in section 3(b) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(b))), the deposits of
which are insured by the Federal Deposit Insurance Corporation, a
subsidiary or a department or division of any such savings association,
or a savings and loan holding company; and
(v) the Commission in the case of all other municipal securities
dealers.
(B) When used with respect to a clearing agency or transfer
agent:
(i) the Comptroller of the Currency, in the case of a national
bank or a subsidiary of any such bank;
(ii) the Board of Governors of the Federal Reserve System, in the
case of a State member bank of the Federal Reserve System, a subsidiary
thereof, a bank holding company, or a subsidiary of a bank holding
company which is a bank other than a bank specified in clause (i),
(iii) or (iv) of this subparagraph;
(iii) the Federal Deposit Insurance Corporation, in the case of a
bank insured by the Federal Deposit Insurance Corporation (other than a
member of the Federal Reserve System), or a subsidiary thereof;
(iv) the Director of the Office of Thrift Supervision, in the
case of a savings association (as defined in section 3(b) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(b))), the deposits of
which are insured by the Federal Deposit Insurance Corporation, or a
subsidiary of any such savings association, or a savings and loan
holding company; and
(v) the Commission in the case of all other clearing agencies and
transfer agents.
(C) When used with respect to a participant or applicant to
become a participant in a clearing agency or a person requesting or
having access to services offered by a clearing agency:
(i) the Comptroller of the Currency, in the case of a national
bank when the appropriate regulatory agency for such clearing agency is
not the Commission;
(ii) the Board of Governors of the Federal Reserve System in the
case of a State member bank of the Federal Reserve System, a bank
holding company, or a subsidiary of a bank holding company, or a
subsidiary of a bank holding company which is a bank other than a bank
specified in clause (i), (iii) or (iv) of this subparagraph when the
appropriate regulatory agency for such clearing agency is not the
Commission;
(iii) the Federal Deposit Insurance Corporation, in the case of a
bank insured by the Federal Deposit Insurance Corporation (other than a
member of the Federal Reserve System) when the appropriate regulatory
agency for such clearing agency is not the Commission;
(iv) the Director of the Office of Thrift Supervision, in the
case of a savings association (as defined in section 3(b) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(b))), the deposits of
which are insured by the Federal Deposit Insurance Corporation, a
savings and loan holding company, or a subsidiary of a savings and loan
holding company when the appropriate regulatory agency for such
clearing agency is not the Commission; and
(v) the Commission in all other cases.
(D) When used with respect to an institutional investment manager
which is a bank the deposits of which are insured in accordance with
the Federal Deposit Insurance Act:
(i) the Comptroller of the Currency, in the case of a national
bank;
(ii) the Board of Governors of the Federal Reserve System, in the
case of any other member bank of the Federal Reserve System;
(iii) the Director of the Office of Thrift Supervision, in the
case of a savings association (as defined in section 3(b) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(b))) the deposits of
which are insured by the Federal Deposit Insurance Corporation; and
(iv) the Federal Deposit Insurance Corporation, in the case of
any other insured bank.
{{2-29-08 p.9180}}
(E) When used with respect to a national securities exchange or
registered securities association, member thereof, person associated
with a member thereof, applicant to become a member thereof or to
become associated with a member thereof, or person requesting or having
access to services offered by such exchange or association or member
thereof, or the Municipal Securities Rulemaking Board, the Commission.
(F) When used with respect to a person exercising investment
discretion with respect to an account;
(i) the Comptroller of the Currency, in the case of a national
bank;
(ii) the Director of the Office of Thrift Supervision, in the
case of a savings association (as defined in section 3(b) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(b))), the deposits of
which are insured by the Federal Deposit Insurance Corporation; and
(iii) The Board of Governors of the Federal Reserve
System in the case of any other member bank of the Federal Reserve
System;
(iv) the Federal Deposit Insurance Corporation, in the case of
any other bank the deposits of which are insured in accordance with the
Federal Deposit Insurance Act; and
(v) the Commission in the case of all other such persons.
As used in this paragraph, the terms "bank holding company" and
"subsidiary of a bank holding company" have the meanings given
them in section 2 of the Bank
Holding Company Act of 1956 and the term "District of Columbia
savings and loan association" means any association subject to
examination and supervision by the Federal Home Loan Bank Board under
section 8 of the Home Owners'
Loan Act of 1933.
(G) When used with respect to a government securities broker or
government securities dealer, or person associated with a government
securities broker or government securities dealer;
(i) The Comptroller of the Currency, in the case of a national
bank, or a Federal branch or Federal agency of a foreign bank (as such
terms are used in the International Banking Act of 1978);
(ii) the Board of Governors of the Federal Reserve System, in the
case of a State member bank of the Federal Reserve System, a foreign
bank, an uninsured State branch or State agency of a foreign bank, a
commercial lending company owned or controlled by a foreign bank (as
such terms are used in the International Banking Act of 1978), or a
corporation organized or having an agreement with the Board of
Governors of the Federal Reserve System pursuant to section 25 or
section 25A of the Federal Reserve
Act;
(iii) the Federal Deposit Insurance Corporation, in the case of a
bank insured by the Federal Deposit Insurance Corporation (other than a
member of the Federal Reserve System or a Federal savings bank) or an
insured State branch of a foreign bank (as such terms are used in the
International Banking Act of 1978);
(iv) the Director of the Office of Thrift Supervision, in the
case of a savings association (as defined in section 3(b) of the
Federal Deposit Insurance Act) the deposits of which are insured by the
Federal Deposit Insurance Corporation;
(v) the Commission, in the case of all other government
securities brokers and government securities dealers.
(H) When used with respect to an institution described in
subparagraph (D), (F), or (G) of section 1841(c)(2), or held under
section 1843(f), of Title 12--
(i) the Comptroller of the Currency, in the case of a national
bank;
(ii) the Board of Governors of the Federal Reserve System, in the
case of a State member bank of the Federal Reserve System or any
corporation chartered under section 25A of the Federal Reserve Act [12
U.S.C.A. § 611 et seq.];
(iii) the Federal Deposit Insurance Corporation, in the case of
any other bank the deposits of which are insured in accordance with the
Federal Deposit Insurance Act [12 U.S.C.A. § 1811 et seq.]; or
(iv) the Commission in the case of all other such institutions.
As used in this paragraph, the term "bank holding company" and
"subsidiary of a bank holding company" have the meanings given
them in section 1841 of title 12, and the term "District of Columbia
savings and loan association" means any association subject to
examination and supervision by the Office of Thrift Supervision under
section 1466a of
{{12-29-06 p.9180.01}}title 12. As used in
this, the term "savings and loan holding company" has the same
meaning as in section (10)(a) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)).
(35) A person exercises "investment discretion" with
respect to an account if, directly or indirectly, such person (A) is
authorized to determine what securities or other property shall be
purchased or sold by or for the account, (B) makes decisions as to what
securities or other property shall be purchased or sold by or for the
account even though some other person may have responsibility for such
investment decisions, or (C) otherwise exercises such influence with
respect to the purchase and sale of securities or other property by or
for the account as the Commission, by rule, determines, in the public
interest or for the protection of investors, should be subject to the
operation of the provisions of this title and the rules and regulations
thereunder.
(36) A class of persons or markets is subject to "equal
regulation" if no member of the class has a competitive advantage
over any other member thereof resulting from a disparity in their
regulation under this title which the Commission determines is unfair
and not necessary or appropriate in furtherance of the purposes of this
title.
(37) The term "records" means accounts, correspondence,
memorandums, tapes, discs, papers, books, and other documents or
transcribed information of any type, whether expressed in ordinary or
machine language.
(38) The term "market maker" means any specialist permitted
to act as a dealer, any dealer acting in the capacity of block
positioner, and any dealer who, with respect to a security, holds
himself out (by entering quotations in an inter-dealer communications
system or otherwise) as being willing to buy and sell such security for
his own account on a regular or continuous basis.
(39) A person is subject to a "statutory disqualification"
with respect to membership or participation in, or association with a
member of, a self-regulatory organization, if such
person--
{{4-29-05 p.9181}}
(A) has been and is expelled or suspended from membership or
participation in, or barred or suspended from being associated with a
member of, any self-regulatory organization, foreign equivalent of a
self-regulatory organization, foreign or international securities
exchange, contract market designated pursuant to section 5 of the
Commodity Exchange Act (7 U.S.C. 7), or any substantially equivalent
foreign statute or regulation, or futures association registered under
section 17 of such Act (7 U.S.C. 21), or any substantially equivalent
foreign statute or regulation, or has been and is denied trading
privileges on any such contract market or foreign equivalent;
(B) is subject to--
(i) an order of the Commission, other appropriate regulatory
agency, or foreign financial regulatory authority--
(I) denying, suspending for a period not exceeding 12 months, or
revoking his registration as a broker, dealer, municipal securities
dealer, government securities broker, or government securities dealer
or limiting his activities as a foreign person performing a function
substantially equivalent to any of the above; or
(II) barring or suspending for a period not exceeding 12 months
his being associated with a broker, dealer, municipal securities
dealer, government securities broker, government securities dealer, or
foreign person performing a function substantially equivalent to any of
the above;
(ii) an order of the Commodity Futures Trading Commission
denying, suspending, or revoking his registration under the Commodity
Exchange Act (7 U.S.C. 1 et seq.); or
(iii) an order by a foreign financial regulatory authority
denying, suspending, or revoking the person's authority to engage in
transactions in contracts of sales of a commodity for future delivery
or other instruments traded on or subject to the rules of a contract
market, board of trade, or foreign equivalent thereof;
(C) by his conduct while associated with a broker, dealer,
municipal securities dealer, government securities broker, or
government securities dealer or while associated with an entity or
person required to be registered under the Commodity Exchange Act, has
been found to be a cause of any effective suspension, expulsion, or
order of the character described in subparagraph (A) or (B) of this
paragraph, and in entering such a suspension, expulsion, or order, the
Commission, an appropriate regulatory agency, or any such
self-regulatory organization shall have jurisdiction to find whether or
not any person was a cause thereof;
(D) by his conduct while associated with any broker, dealer,
municipal securities dealer, government securities broker, government
securities dealer, or any other entity engaged in transactions in
securities, or while associated with an entity engaged in transactions
in contracts of sale of a commodity for future delivery or other
instruments traded on or subject to the rules of a contract market,
board of trade, or foreign equivalent thereof, has been found to be a
cause of any effective suspension, expulsion, or order by a foreign or
international securities exchange or foreign financial regulatory
authority empowered by a foreign government to administer or enforce
its laws relating to financial transactions as described in
subparagraph (A) or (B) of this paragraph;
(E) has associated with him any person who is known, or in the
exercise of reasonable care should be known, to him to be a person
described by subparagraph (A), (B), (C) or (D) of this paragraph; or
(F) has committed or omitted any act, or is subject to an order
or finding, enumerated in subparagraph (D), (E), (H), or (G) of
paragraph (4) of section 15(b) of this title, has been convicted of any
offense specified in subparagraph (B) of such paragraph (4) or any
other felony within ten years of the date of the filing of an
application for membership or participation in, or to become associated
with a member of, such self-regulatory organization, is enjoined from
any action, conduct, or practice specified in subparagraph (C) of such
paragraph (4), has willfully made or caused to be made in any
application for membership or participation in, or to become associated
with a member of, a self-regulatory organization, report required to be
filed with a self-regulatory organization, or proceeding before a
self-regulatory organization, any statement which was at the time, and
in the light of the circumstances under which it was
{{4-29-05 p.9182}}made, false
or misleading with respect to any material fact, or has omitted to
state in any such application, report, or proceeding any material fact
which is required to be stated therein.
(40) The term "financial responsibility rules" means the
rules and regulations of the Commission or the rules and regulations
prescribed by any self-regulatory organization relating to financial
responsibility and related practices which are designated by the
Commission, by rule or regulation, to be financial responsibility
rules.
(41) The term "mortgage related security" means a security
that is rated in one of the two highest rating categories by at least
one nationally recognized statistical rating organization, and either:
(A) represents ownership of one or more promissory notes or
certificates of interest or participation in such notes (including any
rights designed to assure servicing of, or the receipt or timeliness of
receipt by the holders of such notes, certificates, or participations
of amounts payable under, such notes, certificates, or participations),
which notes:
(i) are directly secured by a first lien on a single parcel of
real estate, including stock allocated to a dwelling unit in a
residential cooperative housing corporation, upon which is located a
dwelling or mixed residential and commercial structure, on a
residential manufactured home as defined in section 603(6) of the
National Manufactured Housing Construction and Safety Standards Act of
1974, whether such manufactured home is considered real or personal
property under the laws of the State in which it is to be located, or
on one or more parcels of real estate upon which is located one or more
commercial structures; and
(ii) were originated by a savings and loan association, savings
bank, commercial bank, credit union, insurance company, or similar
institution which is supervised and examined by a Federal or State
authority, or by a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to sections 203 and 211 of the National
Housing Act, or, where such notes involve a lien on the manufactured
home, by any such institution or by any financial institution approved
for insurance by the Secretary of Housing and Urban Development
pursuant to section 2 of the National Housing Act; or
(B) is secured by one or more promissory notes or certificates of
interest or participations in such notes (with or without recourse to
the issuer thereof) and, by its terms, provides for payments of
principal in relation to payments, or reasonable projections of
payments, on notes meeting the requirements of subparagraphs (A)(i) and
(ii) or certificates of interest or participations in promissory notes
meeting such requirements.
For the purpose of this paragraph, the term "promissory
note", when used in connection with a manufactured home, shall also
include a loan, advance, or credit sale as evidence by a retail
installment sales contract or other instrument.
(42) The term "government securities" means--
(A) securities which are direct obligations of, or obligations
guaranteed as to principal or interest by, the United States;
(B) securities which are issued or guaranteed by the Tennessee
Valley Authority or by corporations in which the United States has a
direct or indirect interest and which are designated by the Secretary
of the Treasury for exemption as necessary or appropriate in the public
interest or for the protection of investors;
(C) securities issued or guaranteed as to principal or interest
by any corporation the securities of which are designated, by statute
specifically naming such corporation, to constitute exempt securities
within the meaning of the laws administered by the Commission;
(D) for purposes of sections
15C and 17A, any put,
call, straddle, option, or privilege on a security described in
subparagraph (A), (B), or (C) other than a put, call, straddle, option,
or privilege--
(i) that is traded on one or more national securities exchanges;
or
{{8-30-02 p.9183}}
(ii) for which quotations are disseminated through an automated
quotation system operated by a registered securities association; or
(E) for purposes of sections
15, 15C, and 17A as applied to
a bank, a qualified Canadian government obligation as defined in
section 5136 of the Revised Statutes of the United States.
(43) The term "government securities broker" means any
person regularly engaged in the business of effecting transactions in
government securities for the account of others, but does not include--
(A) any corporation the securities of which are government
securities under subparagraph (B) or (C) of paragraph (42) of this
subsection; or
(B) any person registered with the Commodity Futures Trading
Commission, any contract market designated by the Commodity Futures
Trading Commission, such contract market's affiliated clearing
organization, or any floor trader on such contract market, solely
because such person effects transactions in government securities that
the Commission, after consultation with the Commodity Futures Trading
Commission, has determined by rule or order to be incidental to such
person's futures-related business.
(44) The term "government securities dealer" means any
person engaged in the business of buying and selling government
securities for his own account, through a broker or otherwise, but does
not include--
(A) any person insofar as he buys or sells such securities for
his own account, either individually or in some fiduciary capacity, but
not as a part of a regular business;
(B) any corporation the securities of which are govenment
securities under subparagrapah (B) or (C) of paragraph (42) of this
subsection;
(C) any bank, unless the bank is engaged in the business of
buying and selling government securities for its own account other than
in a fiduciary capacity, through a broker or otherwise; or
(D) any person registered with the Commodity Futures Trading
Commission, any contract market designated by the Commodity Futures
Trading Commission, such contract market's affiliated clearing
organization, or any floor trader on such contract market, solely
because such person effects transactions in government securities that
the Commission, after consultation with the Commodity Futures Trading
Commission, has determined by rule or order to be incidental to such
person's futures-related business.
(45) The term "person associated with a government securities
broker or government securities dealer" means any partner, officer,
director, or branch manager of such government securities broker or
government securities dealer (or any person occupying a similar status
or performing similar functions), and any other employee of such
government securities broker or government securities dealer who is
engaged in the management, direction, supervision, or performance of
any activities relating to government securities, and any person
directly or indirectly controlling, controlled by, or under common
control with such government securities broker or government securities
dealer.
(46) The term "financial institution" means--
(A) a bank (as defined in paragraph (6) of this subsection);
(B) a foreign bank (as such term is used in the International
Banking Act of 1978); and
(C) a savings association (as defined in section 3(b) of the
Federal Deposit Insurance Act) the deposits of which are insured by the
Federal Deposit Insurance Corporation.
(47) The term "securities laws" means the Securities Act of
1933 (15 U.S.C. 77a et seq.), the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.), the Sarbanes--Oxley Act of 2002, the Public
Utility Holding Company Act of 1935 (15 U.S.C. 79a et seq.), the Trust
Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the Investment Company
Act of 1940 (15 U.S.C. 80a--1 et seq.), the Investment Advisers Act of
1940 (15 U.S.C. 80b et seq.), and the Securities Investor
(48) The dealer registered or required to register pursuant to
section 15 or
15B of this title, except that
in paragraph (3) of this subsection and
sections 6 and
15A the term
{{8-30-02 p.9184}}means such a broker
or dealer and a government securities broker or government securities
dealer registered or required to register pursuant to
section 15C(a)(1)(A) of this
title.
(49) The term "person associated with a transfer agent" and
"associated person of a transfer agent" mean any person (except
an employee whose functions are solely clerical or ministerial)
directly engaged in the management, direction, supervision, or
performance of any of the transfer agent's activities with respect to
transfer agent functions, and any person directly or indirectly
controlling such activities or controlled by the transfer agent in
connection with such activities.
(50) The term "foreign securities authority" means any
foreign government, or any governmental body or regulatory organization
empowered by a foreign government to administer or enforce its laws as
they relate to securities matters.
(51) The term "foreign financial regulatory authority"
means any (A) foreign securities authority, (B) other governmental body
or foreign equivalent of a self-regulatory organization empowered by a
foreign government to administer or enforce its laws relating to the
regulation of fiduciaries, trusts, commercial lending, insurance,
trading in contracts of sale of a commodity for future delivery, or
other instruments traded on or subject to the rules of a contract
market, board of trade, or foreign equivalent, or other financial
activities, or (C) membership organization a function of which is to
regulate participation of its members in activities listed above.
(53)(A) The term "small business related security" means a
security that is rated in 1 of the 4 highest rating categories by at
least 1 nationally recognized statistical rating organization, and
either--
(i) represents an interest in 1 or more promissory notes or
leases of personal property evidencing the obligation of a small
business concern and originated by an insured depository institution,
insured credit union, insurance company, or similar institution which
is supervised and examined by a Federal or State authority, or a
finance company or leasing company; or
(ii) is secured by an interest in 1 or more promissory notes or
leases of personal property (with or without recourse to the issuer or
lessee) and provides for payments of principal in relation to payments,
or reasonable projections of payments, on notes or leases described in
clause (i).
(B) For purposes of this paragraph--
(i) an "interest in a promissory note or a lease of personal
property" includes ownership rights, certificates of interest or
participation in such notes or leases, and rights designed to assure
servicing of such notes or leases, or the receipt or timely receipt of
amounts payable under such notes or leases;
(ii) the term "small business concern" means a business
that meets the criteria for a small business concern established by the
Small Business Administration under section 3(a) of the Small Business
Act;
(iii) the term "insured depository institution" has the
same meaning as in section 3 of
the Federal Deposit Insurance Act; and
(iv) the term "insured credit union" has the same meaning
as in section 101 of the Federal Credit Union Act.
(54) QUALIFIED INVESTOR.--
(A) DEFINITION.--Except as provided in subparagraph (B),
for purposes of this title, the term "qualified investor" means--
(i) any investment company registered with the Commission under
section 8 of the Investment
Company Act of 1940;
(ii) any issuer eligible for an exclusion from the definition of
investment company pursuant to section
3(c)(7) of the Investment Company Act of 1940;
(iii) any bank (as defined in paragraph (6) of this subsection),
savings association (as defined in section 3(b) of the Federal Deposit
Insurance Act), broker, dealer, insurance company (as defined in
section 2(a)(13) of the
Securities Act of 1933), or business development company (as defined in
section 2(a)(48) of the
Investment Company Act of 1940);
{{6-29-01 p.9185}}
(iv) any small business investment company licensed by the United
States Small Business Administration under section 301(c) or (d) of the
Small Business Investment Act of 1958;
(v) any State sponsored employee benefit plan, or any other
employee benefit plan, within the meaning of the Employee Retirement
Income Security Act of 1974, other than an individual retirement
account, if the investment decisions are made by a plan fiduciary, as
defined in section 3(21) of that Act, which is either a bank, savings
and loan association, insurance company, or registered investment
adviser;
(vi) any trust whose purchases of securities are directed by a
person described in clauses (i) through (v) of this subparagraph;
(vii) any market intermediary exempt under section 3(c)(2) of the
Investment Company Act of 1940;
(viii) any associated person of a broker or dealer other than a
natural person;
(ix) any foreign bank (as defined in
section 1(b)(7) of the
International Banking Act of 1978);
(x) the government of any foreign country;
(xi) any corporation, company, or partnership that owns and
invests on a discretionary basis, not less than $25,000,000 in
investments;
(xii) any natural person who owns and invests on a discretionary
basis, not less than $25,000,000 in investments;
(xiii) any government or political subdivision, agency, or
instrumentality of a government who owns and invests on a discretionary
basis not less than $50,000,000 in investments; or
(xiv) any multinational or supranational entity or any agency or
instrumentality thereof.
(B) Altered thresholds for asset-backed securities and loan
participations.--For purposes of section 3(a)(5)(C)(iii) of this
title and section 206(a)(5) of the Gramm-Leach-Bliley Act, the term
"qualified investor" has the meaning given such term by
subparagraph (A) of this paragraph except that clauses (xi) and (xii)
shall be applied by substituting "$10,000,000" for
"$25,000,000".
(C) ADDITIONAL AUTHORITY.--The Commission may, by rule
or order, define a "qualified investor" as any other person,
taking into consideration such factors as the financial sophistication
of the person, net worth, and knowledge and experience in financial
matters.
(55)(A) The term "security future" means a contract of sale
for future delivery of a single security or of a narrow-based security
index, including any interest therein or based on the value thereof,
except as exempted security under section 3(a)(12) of the Securities
Exchange Act of 1934 as in effect on the date of the enactment of the
Futures Trading Act of 1982 (other than any municipal security as
defined in section 3(a)(29) as in effect on the date of the enactment
of the Futures Trading Act of 1982). The term security future' does
not include any agreement, contract, or transaction excluded from the
Commodity Exchange Act under section 2(c), 2(d), 2(f), or 2(g) of the
Commodity Exchange Act (as in effect on the date of the enactment of
the Commodity Futures Modernization Act of 2000) or title IV of the
Commodity Futures Modernization Act of 2000.
(B) The term "narrow-based security index" means an index--
(i) that has 9 or fewer component securities;
(ii) in which a component security comprises more than 30 percent
of the index's weighting;
(iii) in which the five highest weighted component securities in
the aggregate comprise more than 60 percent of the index's weighting;
or
(iv) in which the lowest weighted component securities
comprising, in the aggregate, 25 percent of the index's weighting have
an aggregate dollar value of average daily trading volume of less than
$50,000,000 (or in the case of an index with 15 or more component
securities, $30,000,000), except that is there are two or more
securities with equal weighting that could be included in the
calculation of the lowest weighted component
{{6-29-01 p.9186}}securities
comprising, in the aggregate, 25 percent of the index's weighting,
such securities shall be ranked from lowest to highest dollar value of
average daily trading volume and shall be included in the calculation
based on their ranking starting with the lowest ranked security.
(C) Notwithstanding subparagraph (B), an index is not a
narrow-based security index if--
(i)(I) it has at least nine component securities;
(II) no component security comprises more than 30 percent of the
index's weighting; and
(III) each component security is--
(aa) registered pursuant to section 12 of the Securities Exchange
Act of 1934;
(bb) one of 750 securities with the largest market
capitalization; and
(cc) one of 675 securities with the largest dollar value of
average daily trading volume;
(ii) a board of trade was designated as a contract market by the
Commodity Futures Trading Commission with respect to a contract of sale
for future delivery on the index, before the date of the enactment of
the Commodity Futures Modernization Act of 2000;
(iii)(I) a contract of sale for future delivery on the index
traded on a designated contract market or registered derivatives
transaction execution facility for at least 30 days as a contract of
sale for future delivery on an index that was not a narrow-based
security index; and
(II) it has been a narrow-based security index for no more than
45 business days over 3 consecutive calendar months;
(iv) a contract of sale for future delivery on the index is
traded on or subject to the rules of a foreign board of trade and meets
such requirements as are jointly established by rule or regulation by
the Commission and the Commodity Futures Trading Commission;
(v) no more than 18 months have passed since the date of the
enactment of the Commodity Futures Modernization Act of 2000 and--
(I) it is traded on or subject to the rules of a foreign board of
trade.
(II) the offer and sale in the United States of a contract of
sale for future delivery on the index was authorized before the date of
the enactment of the Commodity Futures Modernization Act of 2000; and
(III) the conditions of such authorization continue to be met; or
(vi) a contract of sale for future delivery on the index is
traded on or subject to the rules of a board of trade and meets such
requirements as are jointly established by rule, regulation, or order
by the Commission and the Commodity Futures Trading Commission.
(D) Within 1 year after the enactment of the Commodity Futures
Modernization Act of 2000, the Commission and the Commodity Futures
Trading Commission jointly shall adopt rules or regulations that set
forth the requirements under clause (iv) of subparagraph (C).
(E) An index that is a narrow-based security index solely because
it was a narrow-based security index for more than 45 business days
over 3 consecutive calendar months pursuant to clause (iii) of
subparagraph (C) shall not be a narrow-based security index for the 3
following calendar months.
(F) For purposes of subparagraphs (B) and (C) of this paragraph--
(i) the dollar value of average daily trading volume and the
market capitalization shall be calculated as of the preceding 6 full
calendar months; and
(ii) the Commission and the Commodity Futures Trading Commission
shall, by rule or regulation, jointly specify the method to be used to
determine market capitalization and dollar value of average daily
trading volume.
(56) The term "security futures product" means a security
future or any put, call, straddle, option, or privilege on any security
future.
{{2-29-08 p.9186.01}}
(57)(A) The term "margin", when used with respect to a
seucrity futures product, means the amount, type, and form of
collateral required to secure any extension or maintenance of credit,
or the amount, type, and form of collateral required as a performance
bond related to the purchase, sale, or carrying of a security futures
product.
(B) The terms "margin level" and "level of margin",
when used with respect to a security futures product, mean the amount
of margin required to secure any extension or maintenance of credit, or
the amount of margin required as a performance bond related to the
purchase, sale, or carrying of a security futures product.
(C) The term "higher margin level" and "higher level of
margin", when used with respect to a security futures product, mean
a margin level established by a national securities exchange registered
pursuant to section 6(g) that is higher than the minimum amount
established and in effect pursuant to section 7(c)(2)(B).
(58) AUDIT COMMITTEE.--The term "audit committee"
means--
(A) a committee (or equivalent body) established by and amongst
the board of directors of an issuer for the purpose of overseeing the
accounting and financial reporting processes of the issuer and audits
of the financial statements of the issuer; and
(B) if no such committee exists with respect to an issuer, the
entire board of directors of the issuer.
(59) REGISTERED PUBLIC ACCOUNTING FIRM.--The term
"registered public accounting firm" has the same meaning as in
section 2 of the Sarbanes--Oxley Act of 2002.
(60) CREDIT RATING.--The term "credit rating"
means an assessment of the creditworthiness of an obligor as an entity
or with respect to specific securities or money market instruments.
(61) CREDIT RATING AGENCY.--The term "credit rating
agency" means any person--
(A) engaged in the business of issuing credit ratings on the
Internet or through another readily accessible means, for free or for a
reasonable fee, but does not include a commercial credit reporting
company;
(B) employing either a quantitative or qualitative model, or
both, to determine credit ratings; and
(C) receiving fees from either issuers, investors, or other
market participants, or a combination thereof.
(62) Nationally recognized statistical rating
organization.--The term "nationally recognized statistical
rating organization" means a credit rating agency that--
(A) has been in business as a credit rating agency for at least
the 3 consecutive years immediately preceding the date of its
application for registration under section 15E;
(B) issues credit ratings certified by qualified institutional
buyers, in accordance with section 15E(a)(1)(B)(ix), with respect to--
(i) financial institutions, brokers, or dealers;
(ii) insurance companies;
(iii) corporate issuers;
(iv) issuers of asset-backed securities (as that term is defined
in section 1101(c) of part 229 of title 17, Code of Federal
Regulations, as in effect on the date of enactment of this paragraph);
(v) issuers of government securities, municipal securities, or
securities issued by a foreign government; or
(vi) a combination of one or more categories of obligors
described in any of clauses (i) through (v); and
(C) is registered under section 15E.
(63) Person associated with a nationally recognized
statistical rating organization.--The term "person associated
with" a nationally recognized statistical rating organization means
any partner, officer, director, or branch manager of a nationally
recognized statistical rating organization (or any person occupying a
similar status or performing similar functions), any person directly or
indirectly controlling, controlled by, or
{{2-29-08 p.9186.02}}
under common control with a nationally recognized statistical rating
organization, or any employee of a nationally recognized statistical
rating organization.
(64) QUALIFIED INSTITUTIONAL BUYER.--The term
"qualified institutional buyer" has the meaning given such term
in section 230.144A(a) of title 17, Code of Federal Regulations, or any
successor thereto.
(b) The Commission and the Board of Governors of the Federal
Reserve System, as to matters within their respective jurisdictions,
shall have power by rules and regulations to define technical, trade,
accounting, and other terms used in this title, consistently with the
provisions and purposes of this title.
(c) No provision of this title shall apply to, or be deemed to
include, any executive department or independent establishment of the
United States, or any lending agency which is wholly owned, directly or
indirectly, by the United States, or any officer, agent, or employee of
any such department, establishment, or agency, acting in the course of
his official duty as such, unless such provision makes specific
reference to such department, establishment, or agency.
(d) No issuer of municipal securities or officer or employee
thereof acting in the course of his official duties as such shall be
deemed to be a "broker", "dealer", or "municipal
securities dealer" solely by reason of buying, selling, or effecting
transactions in the issuer's securities.
(e) CHARITABLE ORGANIZATIONS.--
(1) EXEMPTION.--Notwithstanding any other provision of
this title, but subject to paragraph (2) of this subsection, a
charitable organization, as defined in section 3(c)(10)(D) of the
Investment Company Act of 1940, or any trustee, director, officer,
employee, or volunteer of such a charitable organization acting within
the scope of such person's employment or duties with such organization,
shall not be deemed to be a "broker", "dealer",
"municipal securities broker", "municipal securities
dealer", "government securities broker", or "government
securities dealer" for purposes of this title solely because such
organization or person buys, holds, sells, or trades in securities for
its own account in its capacity as trustee or administrator of, or
otherwise on behalf of or for the account of--
(A) such a charitable organization;
(B) a fund that is excluded from the definition of an investment
company under section
3(c)(10)(B) of the Investment Company Act of 1940; or
(C) a trust or other donative instrument described in section
3(c)(10)(B) of the Investment Company Act of 1940, or the settlors (or
potential settlors) or beneficiaries of any such trust or other
instrument.
(2) LIMITATION ON COMPENSATION.--The exemption provided
under paragraph (1) shall not be available to any charitable
organization, or any trustee, director, officer, employee, or volunteer
of such a charitable organization, unless each person who, on or after
90 days after the date of enactment of this subsection, solicits
donations on behalf of such charitable organization from any donor to a
fund that is excluded from the definition
of an investment company under section 3(c)(10)(B) of the Investment
Company Act of 1940, is either a volunteer or is engaged in the overall
fund raising activities of a charitable organization and receives no
commission or other special compensation based on the number or the
value of donations collected for the fund.
(f) Consideration of Promotion of Efficiency, Competition, and
Capital Formation.--Whenever pursuant to this title the Commission
is engaged in rulemaking, or in the review of a rule of a
self-regulatory organization, and is required to consider or determine
whether an action is necessary or appropriate in the public interest,
the Commission shall also consider, in addition to the protection of
investors, whether the action will promote efficiency, competition, and
capital formation.
(g) CHURCH PLANS.--No church plan described in section
414(e) of the Internal Revenue Code of 1986, no person or entity
eligible to establish and maintain such a plan under the Internal
Revenue Code of 1986, no company or account that is excluded from the
definition of an investment company under
section 3(c)(14) of the
Investment Company Act of 1940, and no trustee, director, officer or
employee of or volunteer for such plan, company, account person, or
entity, acting within the scope of that person's employment
or
{{12-31-07 p.9186.03}}activities with
respect to such plan, shall be deemed to be a "broker",
"dealer", "municipal securities broker", "municipal
securities dealer", "government securities broker",
"government securities dealer", "clearing agency", or
"transfer agent" for purposes of this title--
(1) solely because such plan, company, person, or entity buys,
holds, sells, trades in, or transfers securities or acts as an
intermediary in making payments in connection with transactions in
securities for its own account in its capacity as trustee or
administrator of, or otherwise on behalf of, or for the account of, any
church plan, company, or account that is excluded from the definition
of an investment company under section 3(c)(14) of the Investment
Company Act of 1940; and
(2) if no such person or entity receives a commission or other
transaction-related sales compensation in connection with any
activities conducted in reliance on the exemption provided by this
subsection.
[Codified to 15 U.S.C. 78c]
[Source: Section 3 of the Act of June 6, 1934 (Pub. L.
No. 291; 48 Stat. 882), effective July 1, 1934, as amended by section
203(a) of the Act of August 23, 1935 (Pub. L. No. 305; 49 Stat. 704),
effective August 23, 1935; section 12(b) of the Act of June 25, 1959
(Pub. L. No. 86--70; 73 Stat. 143), effective June 25, 1959; section
7(b) of the Act of July 12, 1960 (Pub. L. No. 86--624; 74 Stat. 412),
effective July 12, 1960; section 2 of the Act of August 20, 1964 (Pub.
L. No. 88--467; 78 Stat. 565), effective August 20, 1964; section
401(b) of title IV of the Act of August 10, 1970 (Pub. L. No. 91--373;
84 Stat. 718), effective January 1, 1970; section 28(a) and (b) of the
Act of December 14, 1970 (Pub. L. No. 91--547; 84 Stat. 1435),
effective December 14, 1970; section 6 of the Act of December 22, 1970
(Pub. L. No. 91--567; 84 Stat. 1498), effective January 1, 1970;
section 3 of the Act of June 4, 1975 (Pub. L. No. 94--29; 89 Stat. 97),
effective June 4, 1975, except amendments to section 3(a)(12) effective
December 1, 1975; section 16 of the Act of May 21, 1978 (Pub. L. No.
95--283; 92 Stat. 274), effective May 21, 1978; section 702 of title
VII of the Act of October 21, 1980 (Pub. L. No. 96--477; 94 Stat.
2295), effective October 21, 1980; section 2 of the Act of October 13,
1982 (Pub. L. No. 97--303; 96 Stat. 1409), effective October 13, 1982;
section 6(a) of the Act of August 10, 1984 (Pub. L. No. 98--376; 98
Stat. 1265), effective August 10, 1984; section 101 of title I of the
Act of October 3, 1984 (Pub. L. No. 98--440; 98 Stat. 1689--1690),
effective October 3, 1984; section 102 of title I of the Act of October
28, 1986 (Pub. L. No. 99--571; 100 Stat. 3214--3216), effective July
25, 1987; sections 301--306 of title III of the Act of December 4, 1987
(Pub. L. No. 100--181; 101 Stat. 1253 and 1254), effective December 4,
1987; section 6(a) of the Act of November 19, 1988 (Pub. L. No.
100--704; 102 Stat. 4681), effective November 19, 1988; section
744(u)(1) of title VII of the Act of August 9, 1989 (Pub. L. No.
101--73; 103 Stat. 441), effective August 9, 1989; sections 203(b) and
204 of title II of the Act of November 15, 1990 (Pub. L. No. 101--550;
104 Stat. 2717 and 2718), effective November 15, 1990; sections
106(b)(2)(A) and 109 of title I of the Act of December 17, 1993 (Pub.
L. No. 103--202; 107 Stat. 2350 and 2352, effective December 17, 1993;
sections 202 of title II and 347(a) of title III of the Act of
September 23, 1994 (Pub. L. No. 103--325; 108 Stat. 2198 and 2241),
effective September 23, 1994; section 4 of the Act of December 8, 1995
(Pub. L. No. 104--62; 109 Stat. 684), effective December 8, 1995;
sections 106(b) of title I and 508(c) of title V of the Act of October
11, 1996 (Pub. L. No. 104--290; 110 Stat. 3424 and 3447), effective
October 11, 1996; section 301(b)(1)--(4) of title III of the Act of
November 3, 1998, (Pub. L. No. 105--353; 112 Stat. 3235 and 3236),
effective November 3, 1998; sections 201, 202, 207, 208 and 221(b) of
title II of the Act of November 12, 1999 (Pub. L. No. 106--102; 113
Stat. 1385, 1390, 1394, 1395 and 1401, respectively effective May 12,
2001; section 201 of title II of the Act of December 21, 2000 (Pub. L.
No. 106--554; 114 Stat. 2763A--413, (effective December 21, 2000;
section 2(b), section 205(a), of title II and section 604(c)(1)(A) of
title III of the Act of July 30, 2002 (Pub. L. No. 107--204; 116 Stat.
749, 773, and 774, respectively), effective July 30, 2002; sections
1(c)(1) of the Act of October 25, 2004 (Pub. L. No. 108--359; 118 Stat.
1666), effective October 25, 2004; Sections 8f(1)--(3) of the Act of
October 30, 2004 (Pub. L. No. 108--386; 118 Stat. 2232), effective
October 30, 2004; section 520(1) of the title V of the Act of December
8, 2004 (Pub. L. No. 108--447; 118 Stat. 3267), effective December 8,
2004; section 3(a) of the Act of September 29, 2006 (Pub. L. No.
109--291; 120 Stat. 1328),
{{12-31-07 p.9186.04}}effective September
29, 2006; section 101(a)(1) of title I of the Act of October 13, 2006
(Pub. L. No. 109--351; 120 Stat. 1968), effective October 13, 2006;
section 401 of title IV of the Act of October 13, 2006 (Pub. L. No.
109--351; 120 Stat. 1972 and 1973), effective October 13,
2006]
1 Presidential Proclamation No. 2695, effective July 4, 1946,
11 Fed. Reg. 7517, 60 Stat. 1352, granted independence to the
Philippine Islands. Go Back to Text
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