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8000 - Miscellaneous Statutes and Regulations
NATIONAL MARKET SYSTEM FOR SECURITIES;
SECURITIES
INFORMATION PROCESSORS
SEC. 11A (a)(1) The Congress finds that--
(A) The securities markets are an important national asset which
must be preserved and strengthened.
(B) New data processing and communications techniques create the
opportunity for more efficient and effective market operations.
(C) It is in the public interest and appropriate for the
protection of investors and the maintenance of fair and orderly markets
to assure--
(i) economically efficient execution of securities transactions;
(ii) fair competition among brokers and dealers, among exchange
markets, and between exchange markets and markets other than exchange
markets;
(iii) the availability to brokers, dealers, and investors of
information with respect to quotations for and transactions in
securities;
(iv) the practicability of brokers executing investors' orders in
the best market; and
(v) an opportunity, consistent with the provisions of clauses (i)
and (iv) of this subparagraph, for investors' orders to be executed
without the participation of a dealer.
(D) The linking of all markets for qualified securities through
communication and data processing facilities will foster efficiency,
enhance competition, increase the information available to brokers,
dealers, and investors, facilitate the offsetting of investors' orders,
and contribute to best execution of such orders.
(2) The Commission is directed, therefore, having due regard for
the public interest, the protection of investors, and the maintenance
of fair and orderly markets, to use its authority under this title to
facilitate the establishment of a national market system for securities
(which may include subsystems for particular types of securities with
unique trading characteristics) in accordance with the findings and to
carry out the objectives set forth in paragraph (1) of this subsection.
The Commission, by rule, shall designate the securities or classes of
securities qualified for trading in the national market system from
among securities other than exempted securities. (Securities or classes
of securities so designated hereinafter in this section referred to as
"qualified securities".)
(3) The Commission is authorized in furtherance of the directive
in paragraph (2) of this subsection--
(A) to create one or more advisory committees pursuant to the
Federal Advisory Committee Act (which shall be in addition to the
National Market Advisory Board
{{10-31-94 p.9196}}established
pursuant to subsection (d) of this section) and to employ one or more
outside experts;
(B) by rule or order, to authorize or require self-regulatory
organizations to act jointly with respect to matters as to which they
share authority under this title in planning, developing, operating, or
regulating a national market system (or a subsystem thereof) or one or
more facilities thereof; and
(C) to conduct studies and make recommendations to the Congress
from time to time as to the possible need for modifications of the
scheme of self-regulation provided for in this title so as to adapt it
to a national market system.
(b)(1) Except as otherwise provided in this section, it shall be
unlawful for any securities information processor unless registered in
accordance with this subsection, directly or indirectly, to make use of
the mails or any means or instrumentality of interstate commerce to
perform the functions of a securities information processor. The
Commission, by rule or order, upon its own motion or upon application,
may conditionally or unconditionally exempt any securities information
processor or class of securities information processors or security or
class of securities from any provision of this section or the rules or
regulations thereunder, if the Commission finds that such exemption is
consistent with the public interest, the protection of investors, and
the purposes of this section, including the maintenance of fair and
orderly markets in securities and the removal of impediments to and
perfection of the mechanism of a national market system:
Provided, however, That a securities information processor
not acting as the exclusive processor of any information with respect
to quotations for or transactions in securities is exempt from the
requirement to register in accordance with this subsection unless the
Commission, by rule or order, finds that the registration of such
securities information processor is necessary or appropriate in the
public interest, for the protection of investors, or for the
achievement of the purposes of this section.
(2) A securities information processor may be registered by
filing with the Commission an application for registration in such form
as the Commission, by rule, may prescribe containing the address of its
principal office, or offices, the names of the securities and markets
for which it is then acting and for which it proposes to act as a
securities information processor, and such other information and
documents as the Commission, by rule, may prescribe with regard to
performance capability, standards and procedures for the collection,
processing, distribution, and publication of information with respect
to quotations for and transactions in securities, personnel
qualifications, financial condition, and such other matters as the
Commission determines to be germane to the provisions of this title and
the rules and regulations thereunder, or necessary or appropriate in
furtherance of the purposes of this section.
(3) The Commission shall, upon the filing of an application for
registration pursuant to paragraph (2) of this subsection, publish
notice of the filing and afford interested persons an opportunity to
submit written data, views, and arguments concerning such application.
Within ninety days of the date of the publication of such notice (or
within such longer period as to which the applicant consents) the
Commission shall--
(A) by order grant such registration, or
(B) institute proceedings to determine whether registration
should be denied. Such proceedings shall include notice of the grounds
for denial under consideration and opportunity for hearing and shall be
concluded within one hundred eighty days of the date of publication of
notice of the filing of the application for registration. At the
conclusion of such proceedings the Commission, by order, shall grant or
deny such registration. The Commission may extend the time for the
conclusion of such proceedings for up to sixty days if it finds good
cause for such extension and publishes its reasons for so finding or
for such longer periods as to which the applicant consents.
The Commission shall grant the registration of a securities
information processor if the Commission finds that such securities
information processor is so organized, and has the capacity, to be
able to assure the prompt, accurate, and reliable performance of its
functions as a securities information processor, comply with the
provisions of this title and
{{10-31-93 p.9196.01}}the rules and
regulations thereunder, carry out its functions in a manner consistent
with the purposes of this section, and, insofar as it is acting as an
exclusive processor, operate fairly and efficiently. The Commission
shall deny the registration of a securities information processor if
the Commission does not make any such finding.
(4) A registered securities information processor may, upon such
terms and conditions as the Commission deems necessary or appropriate
in the public interest or for the protection of investors, withdraw
from registration by filing a written notice of withdrawal with the
Commission. If the Commission finds that any registered securities
information processor is no longer in existence or has ceased to do
business in the capacity specified in its application for registration,
the Commission, by order, shall cancel the registration.
{{4-29-88 p.9197}}
(5)(A) If any registered securities information processor
prohibits or limits any person in respect of access to services
offered, directly or indirectly, by such securities information
processor, the registered securities information processor shall
promptly file notice thereof with the Commission. The notice shall be
in such form and contain such information as the Commission, by rule,
may prescribe as necessary or appropriate in the public interest or for
the protection of investors. Any prohibition or limitation on access to
services with respect to which a registered securities information
processor is required by this paragraph to file notice shall be subject
to review by the Commission on its own motion, or upon application by
any person aggrieved thereby filed within thirty days after such notice
has been filed with the Commission and received by such aggrieved
person, or within such longer period as the Commission may determine.
Application to the Commission for review, or the institution of review
by the Commission on its own motion, shall not operate as a stay of
such prohibition or limitation, unless the Commission otherwise orders,
summarily or after notice and opportunity for hearing on the question
of a stay (which hearing may consist solely of the submission of
affidavits or presentation of oral arguments). The Commission shall
establish for appropriate cases an expedited procedure for
consideration and determination of the question of a stay.
(B) In any proceeding to review the prohibition or limitation of
any person in respect of access to services offered by a registered
securities information processor, if the Commission finds, after notice
and opportunity for hearing, that such prohibition or limitation is
consistent with the provisions of this title and the rules and
regulations thereunder and that such person has not been discriminated
against unfairly, the Commission, by order, shall dismiss the
proceeding. If the Commission does not make any such finding or if it
finds that such prohibition or limitation imposes any burden on
competition not necessary or appropriate in furtherance of the purposes
of this title, the Commission, by order, shall set aside the
prohibition or limitation and require the registered securities
information processor to permit such person access to services offered
by the registered securities information processor.
(6) The Commission, by order, may censure or place limitations
upon the activities, functions, or operations of any registered
securities information processor or suspend for a period not exceeding
twelve months or revoke the registration of any such processor, if the
Commission finds, on the record after notice and opportunity for
hearing, that such censure, placing of limitations, suspension, or
revocation is in the public interest, necessary or appropriate for the
protection of investors or to assure the prompt, accurate, or reliable
performance of the functions of such securities information processor,
and that such securities information processor has violated or is
unable to comply with any provision of this title or the rules or
regulations thereunder.
(c)(1) No self-regulatory organization, member thereof, securities
information processor, broker, or dealer shall make use of the mails or
any means or instrumentality of interstate commerce to collect,
process, distribute, publish, or prepare for distribution or
publication any information with respect to quotations for or
transactions in any security other than an exempted security, to
assist, participate in, or coordinate the distribution or publication
of such information, or to effect any transaction in, or to induce or
attempt to induce the purchase or sale of, any such security in
contravention of such rules and regulations as the Commission shall
prescribe as necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
this title to--
(A) prevent the use, distribution, or publication of fraudulent,
deceptive, or manipulative information with respect to quotations for
and transactions in such securities;
(B) assure the prompt, accurate, reliable, and fair collection,
processing, distribution, and publication of information with respect
to quotations for and transactions in such securities and the fairness
and usefulness of the form and content of such information;
(C) assure that all securities information processors may, for
purposes of distribution and publication, obtain on fair and reasonable
terms such information with respect to quotations for and transactions
in such securities as is collected, processed, or prepared
for
{{4-29-88 p.9198}}distribution or
publication by any exclusive processor of such information acting in
such capacity;
(D) assure that all exchange members, brokers, dealers,
securities information processors, and, subject to such limitations as
the Commission, by rule, may impose as necessary or appropriate for the
protection of investors or maintenance of fair and orderly markets, all
other persons may obtain on terms which are not unreasonably
discriminatory such information with respect to quotations for and
transactions in such securities as is published or distributed by any
self-regulatory organization or securities information processor;
(E) assure that all exchange members, brokers, and dealers
transmit and direct orders for the purchase or sale of qualified
securities in a manner consistent with the establishment and operation
of a national market system; and
(F) assure equal regulation of all markets for qualified
securities and all exchange members, brokers, and dealers effecting
transactions in such securities.
(2) The Commission, by rule, as it deems necessary or appropriate
in the public interest or for the protection of investors, may require
any person who has effected the purchase or sale of any qualified
security by use of the mails or any means or instrumentality of
interstate commerce to report such purchase or sale to a registered
securities information processor, national securities exchange, or
registered securities association and require such processor, exchange,
or association to make appropriate distribution and publication of
information with respect to such purchase or sale.
(3)(A) The Commission, by rule, is authorized to prohibit brokers
and dealers from effecting transactions in securities registered
pursuant to section 12(b)
otherwise than on a national securities exchange, if the Commission
finds, on the record after notice and opportunity for hearing, that--
(i) as a result of transactions in such securities
effected otherwise than on a national securities exchange the fairness
or orderliness of the markets for such securities has been affected in
a manner contrary to the public interest or the protection of
investors;
(ii) no rule of any national securities exchange
unreasonably impairs the ability of any dealer to solicit or effect
transactions in such securities for his own account or unreasonably
restricts competition among dealers in such securities or between
dealers acting in the capacity of market makers who are specialists in
such securities and such dealers who are not specialists in such
securities, and
(iii) the maintenance or restoration of fair and orderly
markets in such securities may not be assured through other lawful
means under this title. The Commission may conditionally or
unconditionally exempt any security or transaction or any class of
securities or transactions from any such prohibition if the Commission
deems such exemption consistent with the public interest, the
protection of investors, and the maintenance of fair and orderly
markets.
(B) For the purposes of subparagraph (A) of this paragraph, the
ability of a dealer to solicit or effect transactions in securities for
his own account shall not be deemed to be unreasonably impaired by any
rule of an exchange fairly and reasonably prescribing the sequence in
which orders brought to the exchange must be executed or which has been
adopted to effect compliance with a rule of the Commission promulgated
under this title.
(4) The Commission is directed to review any and all rules of
national securities exchange which limit or condition the ability of
members to effect transactions in securities otherwise than on such
exchanges.
(5) No national securities exchange or registered securities
association may limit or condition the participation of any member in
any registered clearing agency.
(d)(1) Not later than one hundred eighty days after the date
of enactment of the Securities Acts Amendments of 1975, the Commission
shall establish a National Market Advisory Board (hereinafter in
this section referred to as the "Advisory Board") to be
composed of fifteen members, not all of whom shall be from the same
geographical area of the United States, appointed by the Commission for
a term specified by the Commission of not less than two years or
more than five years. The Advisory Board shall consist of
persons
{{12-31-07 p.9199}}associated with
brokers and dealers (who shall be a majority) and persons not so
associated who are representative of the public and, to the extent
feasible, have knowledge of the securities markets of the United
States.
(2) It shall be the responsibility of the Advisory Board to
formulate and furnish to the Commission its views on significant
regulatory proposals made by the Commission or any self-regulatory
organization concerning the establishment, operation, and regulation of
the markets for securities in the United States.
(3)(A) The Advisory Board shall study and make recommendations to
the Commission as to the steps it finds appropriate to facilitate the
establishment of a national market system. In so doing, the Advisory
Board shall assume the responsibilities of any advisory committee
appointed to advise the Commission with respect to the national market
system which is in existence at the time of the establishment of the
Advisory Board.
(B) The Advisory Board shall study the possible need for
modifications of the scheme of self-regulation provided for in this
title so as to adapt it to a national market system, including the need
for the establishment of a new self-regulatory organization
(hereinafter in this section referred to as a "National Market
Regulatory Board" or "Regulatory Board") to administer the
national market system. In the event the Advisory Board determines a
National Market Regulatory Board should be established, it shall make
recommendations as to:
(i) the point in time at which a Regulatory Board should be
established;
(ii) the composition of a Regulatory Board;
(iii) the scope of the authority of a Regulatory Board;
(iv) the relationship of a Regulatory Board to the Commission and
to existing self-regulatory organizations; and
(v) the manner in which a Regulatory Board should be funded.
The Advisory Board shall report to the Congress, on or before
December 31, 1976, the results of such study and its recommendations,
including such recommendations for legislation as it deems appropriate.
(C) In carrying out its responsibilities under this paragraph,
the Advisory Board shall consult with self-regulatory organizations,
brokers, dealers, securities information processors, issuers,
investors, representatives of Government agencies, and other persons
interested or likely to participate in the establishment, operation, or
regulation of the national market system.
(e) National Markets System for Security Futures
Products.--
(1) CONSULTATION AND COOPERATION REQUIRED.--With respect
to security futures products, the Commission and the Commodity Futures
Trading Commission shall consult and cooperate so that, to the maximum
extent practicable, their respective regulatory responsibilities may be
fulfilled and the rules and regulations applicable to security futures
products may foster a national market system for security futures
products if the Commission and the Commodity Futures Trading Commission
jointly determine that such a system would be consistent with the
congressional findings in subsection (a)(1). In accordance with this
objective, the Commission shall, at least 15 days prior to the issuance
for public comment of any proposed rule or regulation under this
section concerning security futures products, consult and request the
views of the Commodity Futures Trading Commission.
(2) APPLICATION OF RULES BY ORDER OF CFTC.--No rule
adopted pursuant to this section shall be applied to any person with
respect to the trading of security futures products on an exchange that
is registered under section 6(g) unless the Commodity Futures Trading
Commission has issued an order directing that such rule is applicable
to such persons.
[Codified to 15 U.S.C. 78k--1]
[Source: Section 11A of the Act of June 6, 1934 (Pub. L. No. 291),
as added by section 7 of the Act of June 4, 1975 (Pub. L. No. 94--29;
89 Stat. 111), effective June 4, 1975, except section 11A(b) effective
December 1, 1975; as amended by section 402 of title IV of the Act of
November 11, 1984 (Pub. L. No. 98--620; 98 Stat. 3358), effective
November 8, 1984;
{{12-31-07 p.9200}}and sections 313
and 314 of title III of the Act of December 4, 1987 (Pub. L. No.
100--181; 101 Stat. 1256), effective December 4, 1987; section 206(c)
of title II of the Act of December 21, 2000 (Pub. L. No. 106--554; 114
Stat. 2763A--430), effective December 21, 2000]
REGISTRATION REQUIREMENTS FOR SECURITIES
SEC. 12 (a) It shall be unlawful for any member, broker, or dealer
to effect any transaction in any security (other than an exempted
security) on a national securities exchange unless a registration is
effective as to such security for such exchange in accordance with the
provisions of this title and the rules and regulations thereunder. The
provisions of this subsection shall not apply in respect of a security
futures product traded on a national securities exchange.
(b) A security may be registered on a national securities exchange
by the issuer filing an application with the exchange (and filing with
the Commission such duplicate originals thereof as the Commission may
require), which application shall contain--
(1) Such information, in such detail, as to the issuer and any
person directly or indirectly controlling or controlled by, or under
direct or indirect common control with, the issuer, and any guarantor
of the security as to principal or interest or both, as the Commission
may by rules and regulations require, as necessary or appropriate in
the public interest or for the protection of investors, in respect of
the following:
(A) the organization, financial structure and nature of the
business;
(B) the terms, position, rights, and privileges of the different
classes of securities outstanding;
(C) the terms on which their securities are to be, and during the
preceding three years have been, offered to the public or otherwise;
(D) the directors, officers, and underwriters, and each security
holder of record holding more than 10 per centum of any class of any
equity security of the issuer (other than an exempted security), their
remuneration and their interests in the securities of, and their
material contracts with, the issuer and any person directly or
indirectly controlling or controlled by, or under direct or indirect
common control with, the issuer;
(E) remuneration to others than directors and officers exceeding
$20,000 per annum;
(F) bonus and profit-sharing arrangements;
(G) management and service contracts;
(H) options existing or to be created in respect of their
securities;
(I) material contracts, not made in the ordinary course of
business, which are to be executed in whole or in part at or after the
filing of the application or which were made not more than two years
before such filing, and every material patent or contract for a
material patent right shall be deemed a material contract;
(J) balance sheets for not more than the three preceding fiscal
years, certified if required by the rules and regulations of the
Commission by a registered public accounting firm;
(K) profit and loss statements for not more than the three
preceding fiscal years, certified if required by the rules and
regulations of the Commission by a registered public accounting firm;
and
(L) any further financial statements which the Commission may
deem necessary or appropriate for the protection of investors.
(2) Such copies of articles of incorporation, bylaws, trust
indentures, or corresponding documents by whatever name known,
underwriting arrangements, and other similar documents of, and voting
trust agreements with respect to, the issuer and any person directly or
indirectly controlling or controlled by, or under direct or indirect
common control with, the issuer as the Commission may require as
necessary or appropriate for the proper protection of investors and to
insure fair dealing in the security.
(3) Such copies of material contracts, referred to in paragraph
(1)(I) above, as the Commission may require as necessary or appropriate
for the proper protection of investors and to insure fair dealing in
the security.
{{6-29-01 p.9200.01}}
(c) If in the judgment of the Commission any information required
under subsection (b) is inapplicable to any specified class or classes
of issuers, the Commission shall require in lieu thereof the submission
of such other information of comparable character as it may deem
applicable to such class of issuers.
(d) If the exchange authorities certify to the Commission that the
security has been approved by the exchange for listing and
registration, the registration shall become effective thirty days after
the receipt of such certification by the Commission or within such
shorter period of time as the Commission may determine. A security
registered with a national securities exchange may be withdrawn or
stricken from listing and registration in accordance with the rules of
the exchange and, upon such terms as the Commission may deem necessary
to impose for the protection of investors, upon application by the
issuer or the exchange to the Commission; whereupon the issuer shall be
relieved from further compliance with the provisions of this section
and section 13 of this title
and any rules or regulations under such sections as to the securities
so withdrawn or stricken. As unissued security may be registered only
in accordance with such rules and regulations as the Commission may
prescribe as necessary or appropriate in the public interest or for the
protection of investors.
(e) Notwithstanding the foregoing provisions of this section, the
Commission may by such rules and regulations as it deems necessary or
appropriate in the public interest or for
{{2-28-95 p.9201}}the
protection of investors permit securities listed on any exchange at the
time the registration of such exchange as a national securities
exchange becomes effective, to be registered for a period ending not
later than July 1, 1935, without complying with the provisions of this
section.
(f)(1)(A) Notwithstanding the preceding subsections of this
section, any national securities exchange, in accordance with the
requirements of this subsection and the rules hereunder, may extend
unlisted trading privileges to--
(i) any security that is listed and registered on a national
securities exchange, subject to subparagraph (B); and
(ii) any security that is otherwise registered pursuant to this
section, or that would be required to be so registered except for the
exemption from registration provided in subparagraph (B) or (G) of
subsection (g)(2), subject to subparagraph (E) of this paragraph.
(B) A national securities exchange may not extend unlisted
trading privileges to a security described in subparagraph (A)(i)
during such interval, if any, after the commencement of an initial
public offering of such security, as is or may be required pursuant to
subparagraph (C).
(C) Not later than 180 days after the date of enactment of the
Unlisted Trading Privileges Act of 1994, the Commission shall
prescribe, by rule or regulation, the duration of the interval referred
to in subparagraph (B), if any, as the Commission determines to be
necessary or appropriate for the maintenance of fair and orderly
markets, the protection of investors and the public interest or
otherwise in furtherance of the purposes of this title. Until the
earlier of the effective date of such rule or regulation or 240 days
after such date of enactment, such interval shall begin at the opening
of trading on the day on which such security commences trading on the
national securities exchange with which such security is registered and
end at the conclusion of the next day of trading.
(D) The Commission may prescribe, by rule or regulation such
additional procedures or requirements for extending unlisted trading
privileges to any security as the Commission deems necessary or
appropriate for the maintenance of fair and orderly markets, the
protection of investors and the public interest, or otherwise in
furtherance of the purposes of this title.
(E) No extension of unlisted trading privileges to securities
described in subparagraph (A)(ii) may occur except pursuant to a rule,
regulation, or order of the Commission approving such extension or
extensions. In promulgating such rule or regulation or in issuing such
order, the Commission--
(i) shall find that such extension or extensions of unlisted
trading privileges is consistent with the maintenance of fair and
orderly markets, the protection of investors and the public interest,
and otherwise in furtherance of the purposes of this title;
(ii) shall take account of the public trading activity in such
securities, the character of such trading, the impact of such extension
on the existing markets for such securities, and the desirability of
removing impediments to and the progress that has been made toward the
development of a national market system; and
(iii) shall not permit a national securities exchange to extend
unlisted trading privileges to such securities if any rule of such
national securities exchange would unreasonably impair the ability of a
dealer to solicit or effect transactions in such securities for its own
account, or would unreasonably restrict competition among dealers in
such securities or between such dealers acting in the capacity of
market makers who are specialists and such dealers who are not
specialists.
(F) An exchange may continue to extend unlisted trading
privileges in accordance with this paragraph only if the exchange and
the subject security continue to satisfy the requirements for
eligibility under this paragraph, including any rules and regulations
issued by the Commission pursuant to this paragraph, except that
unlisted trading privileges may continue with regard to securities
which had been admitted on such exchange prior to July 1, 1964,
notwithstanding the failure to satisfy such requirements. If unlisted
trading privileges in a security are discontinued pursuant to this
subparagraph, the exchange shall
{{2-28-95 p.9202}}cease
trading in that security, unless the exchange and the subject security
thereafter satisfy the requirements of this paragraph and the rules
issued hereunder.
(G) For purposes of this paragraph--
(i) a security is the subject of an initial public offering if--
(I) the offering of the subject security is registered under the
Securities Act of 1933; and
(II) the issuer of the security, immediately prior to filing the
registration statement with respect to the offering, was not subject to
the reporting requirements of section
13 or 15(d) of this
title; and
(ii) an initial public offering of such security commences at the
opening of trading on the day on which such security commences trading
on the national securities exchange with which such security is
registered.
(2)(A) At any time within 60 days of commencement of trading on an
exchange of a security pursuant to unlisted trading privileges, the
Commission may summarily suspend such unlisted trading privileges on
the exchange. Such suspension shall not be reviewable under
section 25 of this title and
shall not be deemed to be a final agency action for purposes of section
704 of title 5, United States Code. Upon such suspension--
(i) the exchange shall cease trading in the security by the close
of business on the date of such suspension, or at such time as the
Commission may prescribe by rule or order for the maintenance of fair
and orderly markets, the protection of investors and the public
interest, or otherwise in furtherance of the purposes of this title;
and
(ii) if the exchange seeks to extend unlisted trading privileges
to the security, the exchange shall file an application to reinstate
its ability to do so with the Commission pursuant to such procedures as
the Commission may prescribe by rule or order for the maintenance of
fair and orderly markets, the protection of investors and the public
interest, or otherwise in furtherance of the purposes of this title.
(B) A suspension under subparagraph (A) shall remain in effect
until the Commission, by order, grants approval of an application to
reinstate, as described in subparagraph (A)(ii).
(C) A suspension under subparagraph (A) shall not affect the
validity or force of an extension of unlisted trading privileges in
effect prior to such suspension.
(D) The Commission shall not approve an application by a national
securities exchange to reinstate its ability to extend unlisted trading
privileges to a security unless the Commission finds, after notice and
opportunity for hearing, that the extension of unlisted trading
privileges pursuant to such application is consistent with the
maintenance of fair and orderly markets, the protection of investors
and the public interest, and otherwise in furtherance of the purposes
of this title. If the application is made to reinstate unlisted trading
privileges to a security described in paragraph (1)(A)(ii), the
Commission--
(i) shall take account of the public trading activity in such
security, the character of such trading, the impact of such extension
on the existing markets for such a security, and the desirability of
removing impediments to and the progress that has been made toward the
development of a national market system; and
(ii) shall not grant any such application if any rule of the
national securities exchange making application under this subsection
would unreasonably impair the ability of a dealer to solicit or effect
transactions in such security for its own account, or would
unreasonably restrict competition among dealers in such security or
between such dealers acting in the capacity of marketmakers who are
specialists and such dealers who are not specialists.
(3) Notwithstanding paragraph (2), the Commission shall by rules
and regulations suspend unlisted trading privileges in whole or in part
for any or all classes of securities for a period not exceeding twelve
months, if it deems such suspension necessary or appropriate in the
public interest or for the protection of investors or to prevent
evasion of the purposes of this title.
(4) On the application of the issuer of any security for which
unlisted trading privileges on any exchange have been continued or
extended pursuant to this subsection, or
{{2-29-96 p.9202.01}}of any
broker or dealer who makes or creates a market for such security, or of
any other person having a bona fide interest in the question of
termination or suspension of such unlisted trading privileges, or on
its own motion, the Commission shall by order terminate, or suspend for
a period not exceeding twelve months, such unlisted trading privileges
for such security if the Commission finds, after appropriate notice and
opportunity for hearing, that such termination or suspension is
necessary or appropriate in the public interest or for the protection
of investors.
(5) In any proceeding under this subsection in which appropriate
notice and opportunity for hearing are required, notice of not less
than ten days to the applicant in such proceeding, to the issuer of the
security involved, to the exchange which is seeking to continue or
extend or has continued or extended unlisted trading privileges for
such security, and to the exchange, if any, on which such security is
listed and registered, shall be deemed adequate notice, and any broker
or dealer who makes or creates a market for such security, and any
other person having a bona fide interest in such proceeding, shall upon
application be entitled to be heard.
(6) Any security for which unlisted trading privileges are
continued or extended pursuant to this subsection shall be deemed to be
registered on a national securities exchange within the meaning of this
title. The powers and duties of the Commission under this title shall
be applicable to the rules of an exchange in respect of any such
security. The Commission may, by such rules and regulations as it deems
necessary or appropriate in the public interest or for the protection
of investors, either unconditionally or upon specified terms and
conditions, or for stated periods, exempt such securities from the
operation of any provision of section
13, 14, or
16 of this title.
(g)(1) Every issuer which is engaged in interstate commerce, or in
a business affecting interstate commerce, or whose securities are
traded by use of the mails or any means or instrumentality of
interestate commerce shall--
(A) within one hundred and twenty days after the last day
of its first fiscal year ended after the effective date of this
subsection on which the issuer has total assets exceeding $1,000,000
and a class of equity security (other than an exempted security) held
of record by seven hundred and fifty or more persons; and
(B) within one hundred and twenty days after the last day
of its first fiscal year ended after two years from the effective date
of this subsection on which the issuer has total assets exceeding
$1,000,000 and a class of equity security (other than an exempted
security) held of record by five hundred or more but less than seven
hundred and fifty persons,
register such security by filing with the Commission a registration
statement (and such copies thereof as the Commission may require) with
respect to such security containing such information and documents as
the Commission may specify comparable to that which is required in an
application to register a security pursuant to subsection (b) of this
section. Each such registration statement shall become effective sixty
days after filing with the Commission or within such shorter period as
the Commission may direct. Until such registration statement becomes
effective it shall not be deemed filed for the purposes of section 18
of this title. Any issuer may register any class of equity security not
required to be registered by filing a registration statement pursuant
to the provisions of this paragraph. The Commission is authorized to
extend the date upon which any issuer or class of issuers is required
to register a security pursuant to the provisions of this paragraph.
(2) The provisions of this subsection shall not apply in respect
of--
(A) any security listed and registered on a national securities
exchange.
(B) any security issued by an investment company registered
pursuant to section 8 of the
Investment Company Act of 1940.
(C) any security, other than permanent stock, guaranty stock,
permanent reserve stock, or any similar certificate evidencing
notwithdrawable capital, issued by a savings and loan association,
building and loan association, cooperative bank, homestead association,
or similar institution, which is supervised and examined by State or
Federal authority having supervision over any such
institution.
{{2-29-96 p.9202.02}}
(D) any security of an issuer organized and operated exclusively
for religious, educational, benevolent, fraternal, charitable, or
reformatory purposes and not for pecuniary profit, and no part of the
net earnings of which inures to the benefit of any private
shareholder or individual; or any security of 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.
(E) any security of an issuer which is a "cooperative
association" as defined in the Agricultural Marketing Act, approved
June 15, 1929, as amended, or a federation of such cooperative
associations, if such federation possesses no greater powers or
purposes than cooperative associations so defined.
(F) any security issued by a mutual or cooperative organization
which supplies a commodity or service primarily for the benefit of its
members and operates not for pecuniary profit, but only if the security
is part of a class issuable only to persons who purchase commodities or
services from the issuer, the security is transferable only to a
successor in interest or occupancy of premises serviced or to be served
by the issuer, and no dividends are payable to the holder of the
security.
{{4-29-05 p.9203}}
(G) any security issued by an insurance company if all of the
following conditions are met:
(i) Such insurance company is required to and does file an annual
statement with the Commissioner of Insurance (or other officer or
agency performing a similar function) of its domiciliary State, and
such annual statement conforms to that prescribed by the National
Association of Insurance Commissioners or in the determination of such
State commissioner, officer or agency substantially conforms to that so
prescribed.
(ii) Such insurance company is subject to regulation by its
domiciliary State of proxies, consents, or authorizations in respect of
securities issued by such company and such regulation conforms to that
prescribed by the National Association of Insurance Commissioners.
(iii) After July 1, 1966, the purchase and sales of securities
issued by such insurance company by beneficial owners, directors, or
officers of such company are subject to regulation (including
reporting) by its domiciliary State substantially in the manner
provided in section 16 of this
title.
(H) any interest or participation in any collective trust funds
maintained by a bank or in a separate account maintained by an
insurance company which interest or participation is issued in
connection with (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 deduction of the employer's contribution under section
404(a)(2) of such Code, or (iii) 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.
(3) The Commission may by rules or regulations or, on its own
motion, after notice and opportunity for hearing, by order, exempt from
this subsection any security of a foreign issuer, including any
certificate of deposit for such a security, if the Commission finds
that such exemption is in the public interest and is consistent with
the protection of investors.
(4) Registration of any class of security pursuant to this
subsection shall be terminated ninety days, or such shorter period as
the Commission may determine, after the issuer files a certification
with the Commission that the number of holders of record of such class
of security is reduced to less than three hundred persons. The
Commission shall after notice and opportunity for hearing deny
termination of registration if it finds that the certification is
untrue. Termination of registration shall be deferred pending final
determination on the question of denial.
(5) For the purposes of this subsection the term "class"
shall include all securities of an issuer which are of substantially
similar character and the holders of which enjoy substantially similar
rights and privileges. The Commission may for the purpose of this
subsection define by rules and regulations the terms "total
assets" and "held of record" as it deems necessary or
appropriate in the public interest or for the protection of investors
in order to prevent circumvention of the provisions of this subsection.
For purposes of this subsection, a security futures product shall not
be considered a class of equity security of the issuer of the
securities underlying the security futures product.
(h) The Commission may by rules and regulations, or upon
application of an interested person, by order, after notice and
opportunity for hearing, exempt in whole or in part any issuer or class
of issuers from the provisions of subsection (g) of this section or
from section 13,
14, or
15(d) or may exempt from
section 16 any officer, director, or beneficial owner of securities of
any issuer, any security of which is required to be registered pursuant
to subsection (g) hereof, upon such terms and conditions and for such
period as it deems necessary or appropriate, if the Commission finds,
by reason of the number of public investors, amount of trading interest
in the securities, the nature and extent of the activities of the
issuer, income or assets of the issuer, or otherwise, that such action
is not inconsistent with the public interest or the protection of
investors. The Commission may, for the purposes of any of the
above-mentioned sections or subsections of this title, classify issuers
and prescribe requirements appropriate for each such class.
(i) In respect of any securities issued by banks the deposits of
which are insured in accordance with the Federal Deposit Insurance
Act the powers, functions, and duties vested in the Commission to
administer and enforce sections 10A(m),
12, 13, 14(a), 14(c), 14(d),
14(f), and 16 of this Act, and
section 302, 303, 304, 306, 401(b), 404, 406, and 407
{{4-29-05 p.9204}}of the
Sarbanes-Oxley Act of 2002, (1) with respect to national banks and
savings associations and are vested in the Comptroller of the Currency,
(2) with respect to all other member banks of the Federal Reserve
System are vested in the Board of Governors of the Federal Reserve
System, (3) with respect to all other insured banks are vested in the
Federal Deposit Insurance Corporation, and (4) with respect to savings
associations the accounts of which are insured by the Federal Deposit
Insurance Corporation are vested in the Office of Thrift Supervision.
The Comptroller of the Currency, the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, and the
Office of Thrift Supervision shall have the power to make such rules
and regulations as may be necessary for the execution of the functions
vested in them as provided in this subsection. In carrying out their
responsibilities under this subsection, the agencies named in the first
sentence of this subsection shall issue substantially similar
regulations to regulations and rules issued by the Commission under
sections 10A(m), 12, 13, 14(a), 14(c), 14(d), 14(f) and 16 of this Act,
and sections 302, 303, 304, 306, 401(b), 404, 406, and 407 of the
Sarbanes-Oxley Act of 2002, unless they find that implementation of
substantially similar regulations with respect to insured banks and
insured institutions are not necessary or appropriate in the public
interest or for protection of investors, and publish such findings, and
the detailed reasons therefor, in the Federal Register. Such
regulations of the above-named agencies, or the reasons for failure to
publish such substantially similar regulations to those of the
Commission, shall be published in the Federal Register within 120 days
of the date of enactment of this subsection, and, thereafter, within 60
days of any changes made by the Commission in its relevant regulations
and rules.
(j) The Commission is authorized, by order, as it deems necessary
or appropriate for the protection of investors to deny, to suspend the
effective date of, to suspend for a period not exceeding twelve months,
or to revoke the registration of a security, if the Commission finds,
on the record after notice and opportunity for hearing, that the issuer
of such security has failed to comply with any provision of this title
or the rules and regulations thereunder. No member of a national
securities exchange, broker, or dealer shall make use of the mails or
any means or instrumentality of interstate commerce to effect any
transaction in, or to induce the purchase or sale of, any security the
registration of which has been and is suspended or revoked pursuant to
the preceding sentence.
(k) TRADING SUSPENSIONS; EMERGENCY AUTHORITY.
(1) TRADING SUSPENSIONS.--If in its opinion the public
interest and the protection of investors so require, the Commission is
authorized by order--
(A) summarily to suspend trading in any security (other than an
exempted security) for a period not exceeding 10 business days, and
(B) summarily to suspend all trading on any national securities
exchange or otherwise, in securities other than exempted securities,
for a period not exceeding 90 calendar days.
The action described in subparagraph (B) shall not take effect unless
the Commission notifies the President of its decision and the President
notifies the Commission that the President does not disapprove of such
decision. If the actions described in subparagraph (A) or (B) involve a
security futures product, the Commission may consult with and consider
the views of the Commodity Futures Trading Commission.
(2) EMERGENCY ORDERS.--
(A) IN GENERAL.--The Commission, in an emergency, may by
order summarily take such action to alter, supplement, suspend, or
impose requirements or restrictions with respect to any matter or
action subject to regulation by the Commission or a self-regulatory
organization under the securities laws, as the Commission determines is
necessary in the public interest and for the protection of investors--
(i) to maintain or restore fair and orderly securities markets
(other than markets in exempted securities);
(ii) to ensure prompt, accurate, and safe clearance and
settlement of transactions in securities (other than exempted
securities); or
(iii) to reduce, eliminate, or prevent the substantial disruption
by the emergency of--
{{12-31-07 p.9205}}
(I) securities markets (other than markets in exempted
securities), investment companies, or any other significant portion or
segment of such markets; or
(II) the transmission or processing of securities transactions
(other than transactions in exempted securities).
(B) EFFECTIVE PERIOD.--An order of the Commission under
this paragraph shall continue in effect for the period specified by the
Commission, and may be extended. Except as provided in subparagraph
(C), an order of the Commission under this paragraph may not continue
in effect for more than 10 business days, including extensions.
(C) EXTENSION.--An order of the Commission under this
paragraph may be extended to continue in effect for more than 10
business days if, at the time of the extension, the Commission finds
that the emergency still exists and determines that the continuation of
the order beyond 10 business days is necessary in the pubic interest
and for the protection of investors to attain an objective described in
clause (i), (ii), or (iii) of subparagraph (A). In no event shall an
order of the Commission under this paragraph continue in effect for
more than 30 calendar days.
(D) SECURITY FUTURES.--If the actions described in
subparagraph (A) involve a security futures product, the Commission
shall consult with and consider the views of the Commodity Futures
Trading Commission.
(E) EXEMPTION.--In exercising its authority under this
paragraph, the Commission shall not be required to comply with the
provisions of--
(i) section 19(c); or
(ii) section 553 of title 5, United States Code.
(3) TERMINATION OF EMERGENCY ACTIONS BY PRESIDENT.--The
President may direct that action taken by the Commission under
paragraph (1)(B) or paragraph (2) of this subsection shall not continue
in effect.
(4) COMPLIANCE WITH ORDERS.--No member of a national
securities exchange, broker, or dealer shall make use of the mails or
any means or instrumentality of interstate commerce to effect any
transaction in, or to induce the purchase or sale of, any security in
contravention of an order of the Commission under this subsection
unless such order has been stayed, modified, or set aside as provided
in paragraph (5) of this subsection or has ceased to be effective upon
direction of the President as provided in paragraph (3).
(5) LIMITATIONS ON REVIEW OF ORDERS.--An order of the
Commission pursuant to this subsection shall be subject to review only
as provided in section 25(a) of
this title. Review shall be based on an examination of all the
information before the Commission at the time such order was issued.
The reviewing court shall not enter a stay, writ of mandamus, or
similar relief unless the court finds, after notice and hearing before
a panel of the court, that the Commission's action is arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law.
(6) CONSULTATION.--Prior to taking any action described
in paragraph (1)(B), the Commission shall consult with and consider the
views of the Secretary of the Treasury, the Board of Governors of the
Federal Reserve System, and the Commodity Futures Trading Commission,
unless such consultation is impracticable in light of the emergency.
(7) DEFINITIONS.--For purposes of this subsection--
(A) the term emergency' means--
(i) a major market disturbance characterized by or constituting--
(I) sudden and excessive fluctuations of securities prices
generally, or a substantial threat thereof, that threaten fair and
orderly markets; or
(II) a substantial disruption of the safe or efficient operation
of the national system for clearance and settlement of transactions in
securities, or a substantial threat thereof; or
(ii) a major disturbance that substantially disrupts, or
threatens to substantially disrupt--
(I) the functioning of securities markets, investment companies,
or any other significant portion or segment of the securities markets;
or
(II) the transmission or processing of securities transactions;
and
{{12-31-07 p.9206}}
(B) notwithstanding section 3(a)(47), the term securities
laws' does not include the Public Utility Holding Company Act of 1935.
(l) It shall be unlawful for an issuer, any class
of whose securities is registered pursuant to this section or would be
required to be so registered except for the exemption from registration
provided by subsection (g)(2)(B) or (g)(2)(G) of this section, by the
use of any means or instrumentality of interstate commerce, or of the
mails, to issue, either originally or upon transfer, any of such
securities in a form or with a format which contravenes such rules and
regulations as the Commission may prescribe as necessary or appropriate
for the prompt and accurate clearance and settlement of transactions in
securities. The provisions of this subsection shall not apply to
variable annuity contracts or variable life policies issued by an
insurance company or its separate accounts.
(m) [Repealed]
[Codified to 15 U.S.C. 78l]
[Source: Section 12 of the Act of June 6, 1934 (Pub. L.
No. 291; 48 Stat. 892), effective July 1, 1934, October 1, 1934 (as to
section 12(a)), and September 1, 1934 (as to section 12(b), (c). (d)
and (e)), as amended by section 1 of the Act of May 27, 1936 (Pub. L.
No. 621; 49 Stat. 1375), effective May 27, 1936, July 25, 1936 (as to
section 12(f)(2)), and November 27, 1936 (as to section 12(f)(3));
section 202 of title II of the Act of August 10, 1954 (Pub. L. No. 577;
68 Stat. 686), effective October 8, 1954; section 3 of the Act of
August 20, 1964 (Pub. L. No. 88--467; 78 Stat. 565--568), effective
July 1, 1964 and August 20, 1964; section 1 of the Act of July 29, 1968
(Pub. L. No. 90--439; 82 Stat. 454), effective July 29, 1968; section
28(c) of the Act of December 14, 1970 (Pub. L. No. 91--547; 84 Stat.
1435), effective December 14, 1970; section 105(b) of title I of the
Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1503), effective
October 28, 1974; sections 8 and 9 of the Act of June 4, 1975 (Pub. L.
No. 94--29; 89 Stat. 117, 118), effective June 4, 1975; section 314 of
title III of the Act of December 4, 1987 (Pub. L. No. 100--181; 101
Stat. 1256), effective December 4, 1987; section 744(u)(2) of title VII
of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 441),
effective August 9, 1989; and section 2 of the Act of October 16, 1990
(Pub. L. No. 101--432; 104 Stat. 963), effective October 16, 1990;
section 2 of the Act of October 22, 1994 (Pub. L. No. 103--389; 108
Stat. 4081), effective October 22, 1994; section 4(d) of the Act of
December 8, 1995 (Pub. L. No. 104--62; 109 Stat. 685), effective
December 8, 1995; sections 206(e), 208(b)(1), and (2) of title II of
the Act of December 21, 2000 (Pub. L. No. 106--554; 114 Stat.
2763A--431 and 435), effective December 21, 2000; section 3(b)(4) and
sections 205(b)(4) and (c) of title II of the Act of July 30, 2002
(Pub. L. No. 107--204; 116 Stat. 749 and 774), effective July 30, 2002;
section 1(c)(2) of the Act of October 25, 2004 (Pub. L. No. 108--359;
118 Stat. 1666), effective October 25, 2004; section 8(f)(4) of the Act
of October 30, 2004 (Pub. L. No. 108--386; 118 Stat. 2232), effective
October 30, 2004; sections 7803 (b) and (c) of title VII of the Act of
December 17, 2004 (Pub. L. No. 108--458; 118 Stat. 3862 and 3863),
effective December 17, 2004]
NOTE
Implementing Regulations. The regulations issued in
implementation of the authority vested in the FDIC by section 12(i),
entitled "Part 335--Securities of Insured State Nonmember Banks,"
appear in volume 1 under the "FDIC Rules and Regulations"
tabcard.
PERIODICAL AND OTHER REPORTS
SEC. 13. (a) Every issuer of a security registered
pursuant to section 12 of this title shall file with the Commission, in
accordance with such rules and regulations as the Commission may
prescribe as necessary or appropriate for the proper protection of
investors and to insure fair dealing in the security--
(1) such information and documents (and such copies
thereof) as the Commission shall require to keep reasonably current the
information and documents required to be included in or filed with an
application or registration statement filed pursuant to section 12,
except that the Commission may not require the filing of any material
contract wholly executed before July 1, 1962.
{{4-29-05 p.9206.01}}
(2) such annual reports (and such copies thereof),
certified if required by the rules and regulations of the Commission by
independent public accountants, and such quarterly reports (and such
copies thereof), as the Commission may prescribe.
Every issuer of a security registered on a national securities
exchange shall also file a duplicate original of such information,
documents, and reports with the exchange.
(b)(1) The Commission may prescribe, in regard to reports
made pursuant to this title, the form or forms in which the required
information shall be set forth, the items or details to be shown in the
balance sheet and the earning statement, and the methods to be followed
in the preparation of reports, in the appraisal or valuation of assets
and liabilities, in the determination of depreciation and depletion, in
the differentiation of recurring and nonrecurring income, in the
differentiation of investment and operating income, and in the
preparation, where the Commission deems it necessary or desirable, of
separate and/or consolidated balance sheets or income accounts of any
person directly or indirectly controlling or controlled by the issuer,
or any person under direct or indirect common control with the issuer;
but in the case of the reports of any person whose methods of
accounting are prescribed under the provisions of any law of the United
States, or any rule or regulation thereunder, the rules and regulations
of the Commission with respect to reports shall not be inconsistent
with the requirements imposed by such law or rule or regulation in
respect of the same subject matter (except that such rules and
regulations of the Commission may be inconsistent with such
requirements to the extent that the Commission determines that the
public interest or the protection of investors so requires).
(2) Every issuer which has a class of securities
registered pursuant to section 12 of this title and every issuer which
is required to file reports pursuant to
section 15(d) of this title
shall--
(A) make and keep books, records, and accounts, which,
in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the issuer;
(B) devise and maintain a system of internal accounting
controls sufficient to provide reasonable assurances that--
(i) transactions are executed in accordance with
management's general or specific authorization;
(ii) transactions are recorded as necessary (I) to
permit preparation of financial statements in conformity with generally
accepted accounting principles or any other criteria applicable to such
statements, and (II) to maintain accountability for assets;
(iii) access to assets is permitted only in accordance
with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences; and
(C) notwithstanding any other provision of law, pay the
allocable share of such issuer of a reasonable annual accounting
support fee or fees, determined in accordance with section 109 of the
Sarbanes--Oxley Act of 2002.
{{2-28-91 p.9207}}
(3)(A) With respect to matters concerning the national security
of the United States, no duty or liability under paragraph (2) of this
subsection shall be imposed upon any person acting in cooperation with
the head of any Federal department or agency responsible for such
matters if such act in cooperation with such head of a department or
agency was done upon the specific, written directive of the head of
such department or agency pursuant to Presidential authority to issue
such directives. Each directive issued under this paragraph shall set
forth the specific facts and circumstances with respect to which the
provisions of this paragraph are to be invoked. Each such directive
shall, unless renewed in writing, expire one year after the date of
issuance.
(B) Each head of a Federal department or agency of the United
States who issues a directive pursuant to this paragraph shall maintain
a complete file of all such directives and shall, on October 1 of each
year, transmit a summary of matters covered by such directives in force
at any time during the previous year to the Permanent Select Committee
on Intelligence of the House of Representatives and the Select
Committee on Intelligence of the Senate.
(4) No criminal liability shall be imposed for failing to comply
with the requirements of paragraph (2) of this subsection except as
provided in paragraph (5) of this subsection.
(5) No person shall knowingly circumvent or knowingly fail to
implement a system of internal accounting controls or knowingly falsify
any book, record, or account described in paragraph (2).
(6) Where an issuer which has a class of securities registered
pursuant to section 12 of this title or an issuer which is required to
file reports pursuant to section 15(d) of this title holds 50 per
centum or less of the voting power with respect to a domestic or
foreign firm, the provisions of paragraph (2) require only that the
issuer proceed in good faith to use its influence, to the extent
reasonable under the issuer's circumstances, to cause such domestic or
foreign firm to devise and maintain a system of internal accounting
controls consistent with paragraph (2). Such circumstances include the
relative degree of the issuer's ownership of the domestic or foreign
firm and the laws and practices governing the business operations of
the country in which such firm is located. An issuer which demonstrates
good faith efforts to use such influence shall be conclusively presumed
to have complied with the requirements of paragraph (2).
(7) For the purpose of paragraph (2) of this subsection, the
terms "reasonable assurances" and "reasonable detail" mean
such level of detail and degree of assurance as would satisfy prudent
officials in the conduct of their own affairs.
(c) If in the judgment of the Commission any report required under
subsection (a) is inapplicable to any specified class or classes of
issuers, the Commission shall require in lieu thereof the submission of
such reports of comparable character as it may deem applicable to such
class or classes of issuers.
(d)(1) Any person who, after acquiring directly or indirectly the
beneficial ownershp of any equity security of a class which is
registered pursuant to section 12 of this title, or any equity security
of an insurance company which would have been required to be so
registered except for the exemption contained in section 12(g)(2)(G) of
this title, or any equity security issued by a closed-end investment
company registered under the Investment Company Act of 1940 or any
equity security issued by a Native Corporation pursuant to section
37(d)(6) of the Alaska Native Claims Settlement Act, is directly or
indirectly the beneficial owner of more than 5 per centum of such class
shall, within ten days after such acquisition, send to the issuer of
the security at its principal executive office, by registered or
certified mail, send to each exchange where the security is traded, and
file with the Commission, a statement containing such of the following
information, and such additional information, as the Commission may by
rules and regulations, prescribe as necessary or appropriate in the
public interest or for the protection of investors--
(A) the background, and identity, residence, and citizenship of,
and the nature of such beneficial ownership by, such person and all
other persons by whom or on whose behalf the purchases have been or are
to be effected;
{{2-28-91 p.9208}}
(B) the source and amount of the funds or other consideration
used or to be used in making the purchases, and if any part of the
purchase price is represented or is to be represented by funds or other
consideration borrowed or otherwise obtained for the purpose of
acquiring, holding, or trading such security, a description of the
transaction and the names of the parties thereto, except that where a
source of funds is a loan made in the ordinary course of business by a
bank, as defined in section 3(a)(6) of this title, if the person filing
such statement so requests, the name of the bank shall not be made
available to the public;
(C) if the purpose of the purchases or prospective purchases is
to acquire control of the business of the issuer of the securities, any
plans or proposals which such persons may have to liquidate such
issuer, to sell its assets to or merge it with any other persons, or to
make any other major change in its business or corporate structure;
(D) the number of shares of such security which are beneficially
owned, and the number of shares concerning which there is a right to
acquire, directly or indirectly, by (i) such person, and (ii) by each
associate of such person, giving the background, identity, residence,
and citizenship of each such associate; and
(E) information as to any contracts, arrangements, or
understandings with any person with respect to any securities of the
issuer, including but not limited to transfer of any of the securities,
joint ventures, loan or option arrangements, puts or calls, guaranties
of loans, guaranties against loss or guaranties of profits, division of
losses or profits, or the giving or withholding of proxies, naming the
persons with whom such contracts, arrangements, or understandings have
been entered into, and giving the details thereof.
(2) If any material change occurs in the facts set forth in the
statements to the issuer and the exchange, and in the statement filed
with the Commission, an amendment shall be transmitted to the issuer
and the exchange and shall be filed with the Commission, in accordance
with such rules and regulations as the Commission may prescribe as
necessary or appropriate in the public interest or for the protection
of investors.
(3) When two or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of acquiring,
holding, or disposing of securities of an issuer, such syndicate or
group shall be deemed a "person" for the purposes of this
subsection.
(4) In determining, for purposes of this subsection, any
percentage of a class of any security, such class shall be deemed to
consist of the amount of the outstanding securities of such class,
exclusive of any securities of such class held by or for the account of
the issuer or a subsidiary of the issuer.
(5) The Commission, by rule or regulation or by order, may permit
any person to file in lieu of the statement required by paragraph (1)
of this subsection or the rules and regulations thereunder, a notice
stating the name of such person, the number of shares of any equity
securities subject to paragraph (1) which are owned by him, the date of
their acquisition and such other information as the Commission may
specify, if it appears to the Commission that such securities were
acquired by such person in the ordinary course of his business and were
not acquired for the purpose of and do not have the effect of changing
or influencing the control of the issuer nor in connection with or as a
participant in any transaction having such purpose or effect.
(6) The provisions of this subsection shall not apply to--
(A) any acquisition or offer to acquire securities made or
proposed to be made by means of a registration statement under the
Securities Act of 1933;
(B) any acquisition of the beneficial ownership of a security
which, together with all other acquisitions by the same person of
securities of the same class during the preceding twelve months, does
not exceed 2 per centum of that class;
(C) any acquisition of an equity security by the issuer of such
security;
(D) any acquisition or proposed acquisition of a security which
the Commission, by rules or regulations or by order, shall exempt from
the provisions of this subsection as not entered into for the purpose
of, and not having the effect of, changing or influencing the control
of the issuer or otherwise as not comprehended within the purposes of
this subsection.
{{2-28-91 p.9209}}
(e)(1) It shall be unlawful for an issuer which has a class of
equity securities registered pursuant to section 12 of this title, or
which is a closed-end investment company registered under the
Investment Company Act of 1940, to purchase any equity security issued
by it if such purchase is in contravention of such rules and
regulations as the Commission, in the public interest or for the
protection of investors, may adopt (A) to define acts and practices
which are fraudulent, deceptive, or manipulative, and (B) to prescribe
means reasonably designed to prevent such acts and practices. Such
rules and regulations may require such issuer to provide holders of
equity securities of such class with such information relating to the
reasons for such purchase, the source of funds, the number of shares to
be purchased, the price to be paid for such securities, the method of
purchase, and such additional information, as the Commission deems
necessary or appropriate in the public interest or for the protection
of investors, or which the Commission deems to be material to a
determination whether such security should be sold.
(2) For the purpose of this subsection, a purchase by or for the
issuer or any person controlling, controlled by, or under common
control with the issuer, or a purchase subject to control of the issuer
or any such person, shall be deemed to be a purchase by the issuer. The
Commission shall have power to make rules and regulations implementing
this paragraph in the public interest and for the protection of
investors, including exemptive rules and regulations covering
situations in which the Commission deems it unnecessary or
inappropriate that a purchase of the type described in this paragraph
shall be deemed to be a purchase by the issuer for purposes of some or
all of the provisions of paragraph (1) of this subsection.
(3) At the time of filing such statement as the Commission may
require by rule pursuant to paragraph (1) of this subsection, the
person making the filing shall pay to the Commission a fee of
f of 1 per centum of the value of securities proposed to be
purchased. The fee shall be reduced with respect to securities in an
amount equal to any fee paid with respect to any securities issued in
connection with the proposed transaction under
section 6(b) of the Securities
Act of 1933, or the fee paid under that section shall be reduced in an
amount equal to the fee paid to the Commission in connection with such
transaction under this paragraph.
(f)(1) Every institutional investment manager which uses the mails,
or any means or instrumentality of interstate commerce in the course of
its business as an institutional investment manager and which exercises
investment discretion with respect to accounts holding equity
securities of a class described in section 13(d)(1) of this title
having an aggregate fair market value on the last trading day in any of
the preceding twelve months of at least $100,000,000 or such lesser
amount (but in no case less than $10,000,000) as the Commission, by
rule, may determine, shall file reports with the Commisson in such
form, for such periods, and at such times after the end of such periods
as the Commission, by rule, may prescribe, but in no event shall such
reports be filed for periods longer than one year or shorter than one
quarter. Such reports shall include for each such equity security held
on the last day of the reporting period by accounts (in aggregate or by
type as the Commission, by rule, may prescribe) with respect to which
the institutional investment manager exercises investment discretion
(other than securities held in amounts which the Commission, by rule,
determines to be insignificant for purposes of this subsection), the
name of the issuer and the title, class, CUSIP number, number of shares
or principal amount, and aggregate fair market value of each such
security. Such reports may also include for accounts (in aggregate or
by type) with respect to which the institutional investment manager
exercises investment discretion such of the following information as
the Commission, by rule, prescribes--
(A) the name of the issuer and the title, class, CUSIP number,
number of shares or principal amount, and aggregate fair market value
or cost or amortized cost of each other security (other than an
exempted security) held on the last day of the reporting period by such
accounts;
(B) the aggregate fair market value or cost or amortized
cost of exempted securities (in aggregate or by class) held on the last
day of the reporting period by such accounts;
{{2-28-91 p.9210}}
(C) the number of shares of each equity security of a class
described in section 13(d)(1) of this title held on the last day of the
reporting period by such accounts with respect to which the
institutional investment manager possesses sole or shared authority to
exercise the voting rights evidenced by such securities;
(D) the aggregate purchases and aggregate sales during the
reporting period of each security (other than an exempted security)
effected by or for such accounts; and
(E) with respect to any transaction or series of transactions
having a market value of at least $500,000 or such other amount as the
Commission, by rule, may determine, effected during the reporting
period by or for such accounts in any equity security of a class
described in section 13(d)(1) of this title--
(i) the name of the issuer and the title, class, and CUSIP number
of the security;
(ii) the number of shares or principal amount of the security
involved in the transaction;
(iii) whether the transaction was a purchase or sale;
(iv) the per share price or prices at which the transaction was
effected;
(v) the date or dates of the transaction;
(vi) the date or dates of the settlement of the transaction;
(vii) the broker or dealer through whom the transaction was
effected;
(viii) the market or markets in which the transaction was
effected; and
(ix) such other related information as the Commission, by rule,
may prescribe.
(2) The Commission, by rule or order, may exempt, conditionally
or unconditionally, any institutional investment manager or security or
any class of institutional investment managers or securities from any
or all of the provisions of this subsection or the rules thereunder.
(3) The Commission shall make available to the public for a
reasonable fee a list of all equity securities of a class described in
section 13(d)(1) of this title, updated no less frequently than reports
are required to be filed pursuant to paragraph (1) of this subsection.
The Commission shall tabulate the information contained in any report
filed pursuant to this subsection in a manner which will, in the view
of the Commission, maximize the usefulness of the information to other
Federal and State authorities and the public. Promptly after the filing
of any such report, the Commission shall make the information contained
therein conveniently available to the public for a reasonable fee in
such form as the Commission, by rule, may prescribe, except that the
Commission, as it determines to be necessary or appropriate in the
public interest or for the protection of investors, may delay or
prevent public disclosure of any such information in accordance with
section 552 of title 5, United
States Code. Notwithstanding the preceding sentence, any such
information identifying the securities held by the account of a natural
person or an estate or trust (other than a business trust or investment
company) shall not be disclosed to the public.
(4) In exercising its authority under this subsection, the
Commission shall determine (and so state) that its action is necessary
or appropriate in the public interest and for the protection of
investors or to maintain fair and orderly markets or, in granting an
exemption, that its action is consistent with the protection of
investors and the purposes of this subsection. In exercising such
authority the Commission shall take such steps as are within its power,
including consulting with the Comptroller General of the United States,
the Director of the Office of Management and Budget, the appropriate
regulatory agencies, Federal and State authorities which, directly or
indirectly, require reports from institutional investment managers of
information substantially similar to that called for by this
subsection, national securities exchanges, and registered securities
associations, (A) to achieve uniform, centralized reporting of
information concerning the securities holdings of and transactions
by or for accounts with respect to which institutional investment
managers exercise investment discretion, and (B) consistently with the
objective set forth in the preceding subparagraph, to avoid
unnecessarily duplicative reporting by, and minimize the compliance
burden on, institutional investment managers. Federal authorities
which, directly or indirectly, require reports from institutional
investment managers of information substantially similar to that called
for by this subsection shall cooperate with the
{{2-28-91 p.9211}}Commission in the
performance of its responsibilities under the preceding sentence. An
institutional investment manager which is a bank, the deposits of which
are insured in accordance with the Federal Deposit Insurance Act, shall
file with the appropriate regulatory agency a copy of every report
filed with the Commission pursuant to this subsection.
(5)(A) For purposes of this subsection the term "institutional
investment manager" includes any person, other than a natural
person, investing in or buying and selling securities for its own
account, and any person exercising investment discretion with respect
to the account of any other person.
(B) The Commission shall adopt such rules as it deems necessary
or appropriate to prevent duplicative reporting pursuant to this
subsection by two or more institutional investment managers exercising
investment discretion with respect to the same amount.
(g)(1) Any person who is directly or indirectly the beneficial
owner of more than 5 per centum of any security of a class described in
subsection (d)(1) of this section shall send to the issuer of the
security and shall file with the Commission a statement setting forth,
in such form and at such time as the Commission may, by rule,
prescribe--
(A) such person's identity, residence, and citizenship; and
(B) the number and description of the shares in which such person
has an interest and the nature of such interest.
(2) If any material change occurs in the facts set forth in the
statement sent to the issuer and filed with the Commission, an
amendment shall be transmitted to the issuer and shall be filed with
the Commission, in accordance with such rules and regulations as the
Commission may prescribe as necessary or appropriate in the public
interest or for the protection of investors.
(3) When two or more persons act as a partnership, syndicate, or
other group for the purpose of acquiring, holding, or disposing of
securities of an issuer, such syndicate or group shall be deemed a
person' for the purposes of this subsection.
(4) In determining, for purposes of this subsection, any
percentage of a class of any security, such class shall be deemed to
consist of the amount of the outstanding securities of such class,
exclusive of any securities of such class held by or for the account of
the issuer or a subsidiary of the issuer.
(5) In exercising its authority under this subsection, the
Commission shall take such steps as it deems necessary or appropriate
in the public interest or for the protection of investors (A) to
achieve centralized reporting of information regarding ownership, (B)
to avoid unnecessarily duplicative reporting by and minimize the
compliance burden on persons required to report, and (C) to tabulate
and promptly make available the information contained in any report
filed pursuant to this subsection in a manner which will, in the view
of the Commission, maximize the usefulness of the information to other
Federal and State agencies and the public.
(6) The Commission may, by rule or order, exempt, in whole or in
part, any person or class of persons from any or all of the reporting
requirements of this subsection as it deems necessary or appropriate in
the public interest or for the protection of investors.9210/1
(h) LARGE TRADER REPORTING.--
(1) IDENTIFICATION REQUIREMENTS FOR LARGE TRADERS.--For
the purpose of monitoring the impact on the securities markets of
securities transactions involving a substantial volume or a large fair
market value or exercise value and for the purpose of otherwise
assisting the Commission in the enforcement of this title, each large
trader shall--
(A) provide such information to the Commission as the Commission
may by rule or regulation prescribe as necessary or appropriate,
identifying such large trader and all accounts in or through which such
large trader effects such transactions; and
(B) identify, in accordance with such rules or regulations as the
Commission may prescribe as necessary or appropriate, to any registered
broker or dealer by or through whom such large trader directly or
indirectly effects securities transactions, such large
{{2-28-91 p.9212}}trader and all
accounts directly or indirectly maintained with such broker or dealer
by such large trader in or through which such transactions are
effected.
(2) Recordkeeping and reporting requirements for brokers and
dealers.--Every registered broker or dealer shall make and keep for
prescribed periods such records as the Commission by rule or regulation
prescribes as necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
this title, with respect to securities transactions that equal or
exceed the reporting activity level effected directly or indirectly by
or through such registered broker or dealer of or for any person that
such broker or dealer knows is a large trader, or any person that such
broker or dealer has reason to know is a large trader on the basis of
transactions in securities effected by or through such broker or
dealer. Such records shall be available for reporting to the
Commission, or any self-regulatory organization that the Commission
shall designate to receive such reports, on the morning of the day
following the day the transactions were effected, and shall be reported
to the Commission or a self-regulatory organization designated by the
Commission immediately upon request by the Commission or such a
self-regulatory organization. Such records and reports shall be in a
format and transmitted in a manner prescribed by the Commission
(including, but not limited to, machine readable form).
(3) AGGREGATION RULES.--The Commission may prescribe
rules or regulations governing the manner in which transactions and
accounts shall be aggregated for the purpose of this subsection,
including aggregation on the basis of common ownership or control.
(4) EXAMINATION OF BROKER AND DEALER RECORDS.--All
records required to be made and kept by registered brokers and dealers
pursuant to this subsection with respect to transactions effected by
large traders are subject at any time, or from time to time, to such
reasonable periodic, special, or other examinations by representatives
of the Commission as the Commission deems necessary or appropriate in
the public interest, for the protection of investors, or otherwise in
furtherance of the purposes of this title.
(5) FACTORS TO BE CONSIDERED IN COMMISSION ACTIONS.--In
exercising its authority under this subsection, the Commission shall
take into account--
(A) existing reporting systems;
(B) the costs associated with maintaining information with
respect to transactions effected by large traders and reporting such
information to the Commission or self-regulatory organizations; and
(C) the relationship between the United States and international
securities markets.
(6) EXEMPTIONS.--The Commission, by rule, regulation, or
order, consistent with the purposes of this title, may exempt any
person or class of persons or any transaction or class of transactions,
either conditionally or upon specified terms and conditions or for
stated periods, from the operation of this subsection, and the rules
and regulations thereunder.
(7) Authority of commission to limit disclosure of
information.--Notwithstanding any other provision of law, the
Commission shall not be compelled to disclose any information required
to be kept or reported under this subsection. Nothing in this
subsection shall authorize the Commission to withhold information from
Congress, or prevent the Commission from complying with a request for
information from any other Federal department or agency requesting
information for purposes within the scope of its jurisdiction, or
complying with an order of a court of the United States in an action
brought by the United States or the Commission. For purposes of
section 552 of title 5, United
States Code, this subsection shall be considered a statute described in
subsection (b)(3)(B) of such section 552.
(8) DEFINITIONS.--For purposes of this subsection--
(A) the term "large trader" means every person who, for his
own account or an account for which he exercises investment discretion,
effects transactions for the purchase or sale of any publicly traded
security or securities by use of any means or
instrumentality
{{10-31-07 p.9213}}of interstate
commerce or of the mails, or of any facility of a national securities
exchange, directly or indirectly by or through a registered broker or
dealer in an aggregate amount equal to or in excess of the identifying
activity level;
(B) the term "publicly traded security" means any equity
security (including an option on individual equity securities, and an
option on a group or index of such securities) listed, or admitted to
unlisted trading privileges, on a national securities exchange, or
quoted in an automated interdealer quotation system;
(C) the term "identifying activity level" means
transactions in publicly traded securities at or above a level of
volume, fair market value, or exercise value as shall be fixed from
time to time by the Commission by rule or regulation, specifying the
time interval during which such transactions shall be aggregated;
(D) the term "reporting activity level" means transactions
in publicly traded securities at or above a level of volume, fair
market value, or exercise value as shall be fixed from time to time by
the Commission by rule, regulation, or order, specifying the time
interval during which such transactions shall be aggregated; and
(E) the term "person" has the meaning given in section
3(a)(9) of this title and also includes two or more persons acting as a
partnership, limited partnership, syndicate, or other group, but does
not include a foreign central bank.
(i) ACCURACY OF FINANCIAL REPORTS.--Each financial report
that contains financial statements, and that is required to be prepared
in accordance with (or reconciled to) generally accepted accounting
principles under this title and filed with the Commission shall reflect
all material correcting adjustments that have been identified by a
registered public accounting firm in accordance with generally accepted
accounting principles and the rules and regulations of the Commission.
(j) OFF-BALANCE SHEET TRANSACTIONS.--Not later than 180
days after the date of enactment of the Sarbanes--Oxley Act of 2002,
the Commission shall issue final rules providing that each annual and
quarterly financial report required to be filed with the Commission
shall disclose all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other
relationships of the issuer with unconsolidated entities or other
persons, that may have a material current or future effect on financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses.
(k) PROHIBITION ON PERSONAL LOANS TO EXECUTIVES.--
(1) IN GENERAL.--It shall be unlawful for any issuer (as
defined in section 2 of the Sarbanes--Oxley Act of 2002), directly or
indirectly, including through any subsidiary, to extend or maintain
credit, to arrange for the extension of credit, or to renew an
extension of credit, in the form of a personal loan to or for any
director or executive officer (or equivalent thereof) of that issuer.
An extension of credit maintained by the issuer on the date of
enactment of this subsection shall not be subject to the provisions of
this subsection, provided that there is no material modification to any
term of any such extension of credit or any renewal of any such
extension of credit on or after that date of enactment.
(2) LIMITATION.--Paragraph (1) does not preclude any
home improvement and manufactured home loans (as that term is defined
in section 5 of the Home Owners' Loan Act (12 U.S.C. 1464)), consumer
credit (as defined in section 103 of the Truth in Lending Act (15
U.S.C. 1602)), or any extension of credit under an open end credit plan
(as defined in section 103 of the Truth in Lending Act (15 U.S.C.
1602)), or a charge card (as defined in section 127(c)(4)(e) of the
Truth in Lending Act (15 U.S.C. 1637(c)(4)(e)), or any extension of
credit by a broker or dealer registered under section 15 of this title
to an employee of that broker or dealer to buy, trade, or carry
securities, that is permitted under rules or regulations of the Board
of Governors of the Federal Reserve System pursuant to section 7 of
this title (other than an extension of credit that would be used to
purchase the stock of that issuer), that is--
(A) made or provided in the ordinary course of the consumer
credit business of such issuer;
{{10-31-07 p.9214}}
(B) of a type that is generally made available by such issuer to
the public; and
(C) made by such issuer on market terms, or terms that are no
more favorable than those offered by the issuer to the general public
for such extensions of credit.
(3) RULE OF CONSTRUCTION FOR CERTAIN LOANS.--Paragraph
(1) does not apply to any loan made or maintained by an insured
depository institution (as defined in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)), if the loan is subject to the insider
lending restrictions of section 22(h) of the Federal Reserve Act (12
U.S.C. 375b).
(l) REAL TIME ISSUER DISCLOSURES.--Each issuer
reporting under section 13(a) or 15(d) shall disclose to the public on
a rapid and current basis such additional information concerning
material changes in the financial condition or operations of the
issuer, in plain English, which may include trend and qualitative
information and graphic presentations, as the Commission determines, by
rule, is necessary or useful for the protection of investors and in the
public interest.
[Codified to 15 U.S.C. 78m]
[Source: Section 13 of the Act of June 6, 1934 (Pub. L. No. 291;
48 Stat. 894), effective October 1, 1934, as amended by section 4 of
the Act of August 20, 1964 (Pub. L. No. 88--467; 78 Stat. 569),
effective August 20, 1964; section 2 of the Act of July 29, 1968 (Pub.
L. No. 90--439; 82 Stat. 454), effective July 29, 1968; sections 1 and
2 of the Act of December 22, 1970 (Pub. L. No. 91--567; 84 Stat. 1497),
effective December 22, 1970; section 10 of the Act of June 4, 1975
(Pub. L. No. 94--29; 89 Stat. 119), effective June 4, 1975; section
308(b) of the Act of February 5, 1976 (Pub. L. No. 94--210; 90 Stat.
57), effective February 5, 1976; section 102 of title I of the Act of
December 19, 1977 (Pub. L. No. 95--213; 91 Stat. 1494), effective
December 19, 1977; sections 202 and 203 of title II of the Act of
December 19, 1977 (Pub. L. No. 95--213; 91 Stat. 1498, 1499), effective
December 19, 1977; section 2(a) of the Act of June 6, 1983 (Pub. L. No.
98--38; 97 Stat. 205), effective June 6, 1983; sections 315 and 316 of
title III of the Act of December 4, 1987 (Pub. L. No. 100--181; 101
Stat. 1256), effective December 4, 1987; section 12(d) of the Act of
February 3, 1988 (Pub. L. No. 100--241; 101 Stat. 1810), effective
February 3, 1988; section 5002 of title V of the Act of August 23, 1988
(Pub. L. No. 100--418; 102 Stat. 1415), effective August 23, 1988; and
section 3 of the Act of October 16, 1990; (Pub. L. No. 101--432; 104
Stat. 964), effective October 16, 1990; sections 109(h), 401(9), (402),
and 409 of titles II and IV of the Act of July 30, 2002 (Pub. L. No.
107--204; 116 Stat. 771, 785, 786, 787 and 791, respectively),
effective July 30, 2002]
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