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United States Code (Last Updated: May 24, 2014) |
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Title 15. COMMERCE AND TRADE |
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Chapter 2B. SECURITIES EXCHANGES |
§ 78o. Registration and regulation of brokers and dealers
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(a) Registration of all persons utilizing exchange facilities to effect transactions; exemptions (1) It shall be unlawful for any broker or dealer which is either a person other than a natural person or a natural person not associated with a broker or dealer which is a person other than a natural person (other than such a broker or dealer whose business is exclusively intrastate and who does not make use of any facility of a national securities exchange) to make use of the mails or any means or instrumentality of interstate commerce to effect any transactions in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers’ acceptances, or commercial bills) unless such broker or dealer is registered in accordance with subsection (b) of this section. (2) The Commission, by rule or order, as it deems consistent with the public interest and the protection of investors, may conditionally or unconditionally exempt from paragraph (1) of this subsection any broker or dealer or class of brokers or dealers specified in such rule or order. (b) Manner of registration of brokers and dealers (1) A broker or dealer may be registered by filing with the Commission an application for registration in such form and containing such information and documents concerning such broker or dealer and any persons associated with such broker or dealer as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. Within forty-five days of the date of the filing of such application (or within such longer period as to which the applicant consents), the Commission shall— (A) by order grant registration, or (B) institute proceedings to determine whether registration should be denied. Such proceedings shall include notice of the grounds for denial under consideration and opportunity for hearing and shall be concluded within one hundred twenty days of the date of the filing of the application for registration. At the conclusion of such proceedings, the Commission, by order, shall grant or deny such registration. The Commission may extend the time for conclusion of such proceedings for up to ninety days if it finds good cause for such extension and publishes its reasons for so finding or for such longer period as to which the applicant consents. The Commission shall grant such registration if the Commission finds that the requirements of this section are satisfied. The order granting registration shall not be effective until such broker or dealer has become a member of a registered securities association, or until such broker or dealer has become a member of a national securities exchange, if such broker or dealer effects transactions solely on that exchange, unless the Commission has exempted such broker or dealer, by rule or order, from such membership. The Commission shall deny such registration if it does not make such a finding or if it finds that if the applicant were so registered, its registration would be subject to suspension or revocation under paragraph (4) of this subsection. (2) (A) An application for registration of a broker or dealer to be formed or organized may be made by a broker or dealer to which the broker or dealer to be formed or organized is to be the successor. Such application, in such form as the Commission, by rule, may prescribe, shall contain such information and documents concerning the applicant, the successor, and any persons associated with the applicant or the successor, as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. The grant or denial of registration to such an applicant shall be in accordance with the procedures set forth in paragraph (1) of this subsection. If the Commission grants such registration, the registration shall terminate on the forty-fifth day after the effective date thereof, unless prior thereto the successor shall, in accordance with such rules and regulations as the Commission may prescribe, adopt the application for registration as its own. (B) Any person who is a broker or dealer solely by reason of acting as a municipal securities dealer or municipal securities broker, who so acts through a separately identifiable department or division, and who so acted in such a manner on June 4, 1975 , may, in accordance with such terms and conditions as the Commission, by rule, prescribes as necessary and appropriate in the public interest and for the protection of investors, register such separately identifiable department or division in accordance with this subsection. If any such department or division is so registered, the department or division and not such person himself shall be the broker or dealer for purposes of this chapter.(C) Within six months of the date of the granting of registration to a broker or dealer, the Commission, or upon the authorization and direction of the Commission, a registered securities association or national securities exchange of which such broker or dealer is a member, shall conduct an inspection of the broker or dealer to determine whether it is operating in conformity with the provisions of this chapter and the rules and regulations thereunder: Provided, however, That the Commission may delay such inspection of any class of brokers or dealers for a period not to exceed six months. (3) Any provision of this chapter (other than section 78e of this title and subsection (a) of this section) which prohibits any act, practice, or course of business if the mails or any means or instrumentality of interstate commerce is used in connection therewith shall also prohibit any such act, practice, or course of business by any registered broker or dealer or any person acting on behalf of such a broker or dealer, irrespective of any use of the mails or any means or instrumentality of interstate commerce in connection therewith. (4) The Commission, by order, shall censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding twelve months, or revoke the registration of any broker or dealer if it finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or revocation is in the public interest and that such broker or dealer, whether prior or subsequent to becoming such, or any person associated with such broker or dealer, whether prior or subsequent to becoming so associated— (A) has willfully made or caused to be made in any application for registration or report required to be filed with the Commission or with any other appropriate regulatory agency under this chapter, or in any proceeding before the Commission with respect to registration, any statement which was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or has omitted to state in any such application or report any material fact which is required to be stated therein. (B) has been convicted within ten years preceding the filing of any application for registration or at any time thereafter of any felony or misdemeanor or of a substantially equivalent crime by a foreign court of competent jurisdiction which the Commission finds— (i) involves the purchase or sale of any security, the taking of a false oath, the making of a false report, bribery, perjury, burglary, any substantially equivalent activity however denominated by the laws of the relevant foreign government, or conspiracy to commit any such offense; (ii) arises out of the conduct of the business of a broker, dealer, municipal securities dealer municipal advisor,, same extent as the Commission prosecutes and sanctions violators of the standard of conduct applicable to an investment advisor under the Investment Advisers Act of 1940 [15 U.S.C. 80b–1 et seq.]. (n) Disclosures to retail investors (1) In general Notwithstanding any other provision of the securities laws, the Commission may issue rules designating documents or information that shall be provided by a broker or dealer to a retail investor before the purchase of an investment product or service by the retail investor.
(2) Considerations In developing any rules under paragraph (1), the Commission shall consider whether the rules will promote investor protection, efficiency, competition, and capital formation.
(3) Form and contents of documents and information Any documents or information designated under a rule promulgated under paragraph (1) shall— (A) be in a summary format; and (B) contain clear and concise information about— (i) investment objectives, strategies, costs, and risks; and (ii) any compensation or other financial incentive received by a broker, dealer, or other intermediary in connection with the purchase of retail investment products. (o) Authority to restrict mandatory pre-dispute arbitration The Commission, by rule, may prohibit, or impose conditions or limitations on the use of, agreements that require customers or clients of any broker, dealer, or municipal securities dealer to arbitrate any future dispute between them arising under the Federal securities laws, the rules and regulations thereunder, or the rules of a self-regulatory organization if it finds that such prohibition, imposition of conditions, or limitations are in the public interest and for the protection of investors.
Amendments
Unless otherwise provided, amendments by subtitle A (§§ 711–754) and subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 effective on the later of 360 days after
References In Text
This chapter, referred to in subsecs. (b)(2)(B), (C), (3), (4)(A), (D), (E), (11)(B), (12)(B), (c)(3)(B), (8), (f), (g), and (i)(1), was in the original “this title”, and this chapter, referred to in subsecs. (k)(1) and (m), was in the original “this Act”. See References in Text note set out under section 78a of this title.
The Commodity Exchange Act, referred to in subsecs. (b)(4)(B)(ii), (C) to (E) and (c)(3)(B), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§ 1 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 1 of Title 7 and Tables.
The Securities Act of 1933, referred to in subsecs. (b)(4)(D), (E), (c)(8), and (d)(1), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, which is classified generally to subchapter 1 (§ 77a et seq.) of chapter 2A of this title. For complete classification of this Act to the Code, see section 77a of this title and Tables.
The Investment Advisers Act of 1940, referred to in subsecs. (b)(4)(D), (E), (k)(1), and (m), is title II of act Aug. 22, 1940, ch. 686, 54 Stat. 847, which is classified generally to subchapter II (§ 80b–1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see section 80b–20 of this title and Tables.
The Investment Company Act of 1940, referred to in subsec. (b)(4)(D), (E), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, which is classified generally to subchapter 1 (§ 80a–1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see section 80a–51 of this title and Tables.
Subsection (i) of section 78q of this title, referred to in subsec. (b)(11)(B)(vi), (12)(B)(vi), was struck out and subsec. (j) was redesignated (i) by Pub. L. 111–203, title VI, § 617(a),
Section 206 of the Gramm-Leach-Bliley Act, referred to in subsec. (j)(6)(A)(ii), (iii), is section 206 of Pub. L. 106–102, which is set out as a note under section 78c of this title.
Amendments
2012—Subsec. (d)(1). Pub. L. 112–106, § 601(b), substituted “300 persons, or, in the case of bank or a bank holding company, as such term is defined in section 1841 of title 12, 1,200 persons” for “three hundred”.
Subsec. (i)(2) to (4). Pub. L. 112–106, § 305(d)(1), added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively.
2010—Subsec. (b)(1). Pub. L. 111–203, § 985(b)(5)(A)(ii), in concluding provisions, inserted “The order granting registration shall not be effective until such broker or dealer has become a member of a registered securities association, or until such broker or dealer has become a member of a national securities exchange, if such broker or dealer effects transactions solely on that exchange, unless the Commission has exempted such broker or dealer, by rule or order, from such membership.” after “are satisfied.”
Subsec. (b)(1)(B). Pub. L. 111–203, § 985(b)(5)(A)(i), struck out “The order granting registration shall not be effective until such broker or dealer has become a member of a registered securities association, or until such broker or dealer has become a member of a national securities exchange if such broker or dealer effects transactions solely on that exchange, unless the Commission has exempted such broker or dealer, by rule or order, from such membership.” after “grant or deny such registration.”
Subsec. (b)(4). Pub. L. 111–203, § 975(g)(1), inserted “municipal advisor,” after “municipal securities dealer” in subpars. (B)(ii) and (C).
Subsec. (b)(4)(C). Pub. L. 111–203, § 766(d)(1), inserted “security-based swap dealer, major security-based swap participant,” after “government securities dealer,”.
Subsec. (b)(4)(F). Pub. L. 111–203, § 766(d)(2), substituted “broker, dealer, security-based swap dealer, or a major security-based swap participant” for “broker or dealer”.
Subsec. (b)(6)(A). Pub. L. 111–203, § 925(a)(1), substituted “, or bar any such person from being associated with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization,” for “, or bar such person from being associated with a broker or dealer,” in introductory provisions.
Subsec. (c). Pub. L. 111–203, § 975(g)(2), inserted “broker, dealer, or” before “municipal securities dealer” in par. (1)(B) and in two places in par. (2)(B).
Subsec. (c)(1)(A). Pub. L. 111–203, § 929L(3), struck out “otherwise than on a national securities exchange of which it is a member” after “commercial bills)”.
Pub. L. 111–203, § 762(d)(4)(A), struck out “(as defined in section 206B of the Gramm-Leach-Bliley Act),” after “security-based swap agreement”.
Subsec. (c)(1)(B), (C). Pub. L. 111–203, § 762(d)(4)(B), struck out “(as defined in section 206B of the Gramm-Leach-Bliley Act)” after “security-based swap agreement”.
Subsec. (c)(3)(C). Pub. L. 111–203, § 713(a), added subpar. (C).
Subsec. (d). Pub. L. 111–203, § 942(a), inserted subsec. heading, designated existing provisions as par. (1), inserted par. heading, inserted “, other than any class of asset-backed securities,” after “securities of each class”, and added par. (2).
Subsecs. (e) to (h). Pub. L. 111–203, § 929X(c), added subsec. (e) and redesignated former subsecs. (e) to (g) as (f) to (h), respectively. Former subsec. (h) redesignated (i) relating to limitations on State law.
Subsec. (i). Pub. L. 111–203, § 929X(c)(1), redesignated subsec. (h) as (i). Former subsec. (i), relating to rulemaking to extend requirements to new hybrid products, redesignated (j).
Subsec. (j). Pub. L. 111–203, § 929X(c)(1), redesignated subsec. (i), relating to rulemaking to extend requirements to new hybrid products, as (j).
Pub. L. 111–203, § 762(d)(4)(C), (D), redesignated subsec. (i), relating to limitation on Commission authority, as (j) and struck out “(as defined in section 206B of the Gramm-Leach-Bliley Act)” after “security-based swap agreements”.
Subsecs. (k), (l). Pub. L. 111–203, § 913(g)(1), added subsec. (k) relating to standard of conduct and subsec. (l) relating to other matters.
Pub. L. 111–203, § 173(c), added subsec. (k) relating to registration or succession to a United States broker or dealer and subsec. (l) relating to termination of a United States broker or dealer.
Subsec. (m). Pub. L. 111–203, § 913(h)(1), added subsec. (m).
Subsec. (n). Pub. L. 111–203, § 919, added subsec. (n).
Subsec. (o). Pub. L. 111–203, § 921(a), added subsec. (o).
2006—Subsec. (b)(4)(B)(ii), (C). Pub. L. 109–291 inserted “nationally recognized statistical rating organization,” after “transfer agent,”.
2002—Subsec. (b)(4)(F). Pub. L. 107–204, § 604(a)(1), added subpar. (F) and struck out former subpar. (F) which read as follows: “is subject to an order of the Commission entered pursuant to paragraph (6) of this subsection (b) barring or suspending the right of such person to be associated with a broker or dealer.”
Subsec. (b)(4)(H). Pub. L. 107–204, § 604(a)(2), added subpar. (H).
Subsec. (b)(6)(A)(i). Pub. L. 107–204, § 604(c)(1)(B)(ii), substituted “, or is subject to an order or finding,” for “or omission”.
2000—Subsec. (b)(11). Pub. L. 106–554, § 1(a)(5) [title II, § 203(a)(1)], added par. (11).
Subsec. (b)(12). Pub. L. 106–554, § 1(a)(5) [title II, § 203(b)], added par. (12).
Subsec. (c)(1). Pub. L. 106–554, § 1(a)(5) [title III, § 303(e)], amended par. (1) generally. Prior to amendment, par. (1) consisted of subpars. (A) to (E) prohibiting use of mails or instrumentality of interstate commerce for transactions in securities by manipulative, deceptive, or other fraudulent device, requiring the Commission, by regulation, to define such devices as manipulative, deceptive or fraudulent, and providing for consultation with the Secretary of the Treasury and other agencies prior to adoption of regulations.
Subsec. (c)(3). Pub. L. 106–554, § 1(a)(5) [title II, § 206(h)], designated existing provisions as subpar. (A) and added subpar. (B).
Subsec. (i). Pub. L. 106–554, § 1(a)(5) [title III, § 303(f)], added subsec. (i) relating to limitation on Commission authority.
1999—Subsec. (i). Pub. L. 106–102 added subsec. (i) relating to rulemaking to extend requirements to new hybrid products.
1998—Subsec. (c)(8). Pub. L. 105–353, § 301(b)(8)(A), realigned margins.
Subsec. (h)(2). Pub. L. 105–353, § 301(b)(8)(B), substituted “effecting” for “affecting” in introductory provisions.
Subsec. (h)(3)(A)(i)(II)(bb). Pub. L. 105–353, § 301(b)(8)(C), inserted “or” after semicolon at end.
Subsec. (h)(3)(A)(ii)(I). Pub. L. 105–353, § 301(b)(8)(D), substituted “maintained” for “maintains”.
Subsec. (h)(3)(B)(ii). Pub. L. 105–353, § 301(b)(8)(E), substituted “associated” for “association”.
1996—Subsec. (h). Pub. L. 104–290 added subsec. (h).
1995—Subsec. (c)(8). Pub. L. 104–67 added par. (8).
1993—Subsec. (b)(1)(B). Pub. L. 103–202, § 109(b)(2), inserted “The order granting registration shall not be effective until such broker or dealer has become a member of a registered securities association, or until such broker or dealer has become a member of a national securities exchange if such broker or dealer effects transactions solely on that exchange, unless the Commission has exempted such broker or dealer, by rule or order, from such membership.” before “The Commission may extend”.
Subsec. (b)(7). Pub. L. 103–202, § 106(b)(2)(B), inserted “or government securities broker or government securities dealer registered (or required to register) under section 78o–5(a)(1)(A) of this title” after “No registered broker or dealer” in introductory provisions.
Subsec. (c)(1). Pub. L. 103–202, § 105(b), inserted subpar. designation “(A)” after “(1)”, substituted “contrivance.” along with subpar. designation “(B)” and “No municipal securities dealer” for “contrivance, and no municipal securities dealer”, substituted “contrivance.” along with subpar. (C), subpar. designation “(D)” and “The Commission shall” for “contrivance. The Commission shall”, and added subpar. (E).
Subsec. (c)(2). Pub. L. 103–202, § 105(a), inserted subpar. designation “(A)” after “(2)”, substituted “fictitious quotation.” along with subpar. designation “(B)” and “No municipal securities dealer” for “fictitious quotation, and no municipal securities dealer”, substituted “fictitious quotation.” along with subpar. (C), subpar. designation “(D)” and “The Commission shall” for “fictitious quotation. The Commission shall”, and added subpar. (E).
Subsec. (c)(7). Pub. L. 103–202, § 110, added par. (7).
1990—Subsec. (b)(4)(B). Pub. L. 101–550, § 203(a)(1), inserted “or of a substantially equivalent crime by a foreign court of competent jurisdiction” after “misdemeanor”.
Subsec. (b)(4)(B)(i). Pub. L. 101–550, § 203(a)(2), inserted “any substantially equivalent activity however denominated by the laws of the relevant foreign government,” after “burglary,”.
Subsec. (b)(4)(B)(ii). Pub. L. 101–550, § 203(a)(3), inserted “foreign person performing a function substantially equivalent to any of the above,” after “transfer agent,” and “or any substantially equivalent foreign statute or regulation” before semicolon at end.
Subsec. (b)(4)(B)(iii). Pub. L. 101–550, § 203(a)(4), inserted “, or substantially equivalent activity however denominated by the laws of the relevant foreign government” after “securities”.
Subsec. (b)(4)(B)(iv). Pub. L. 101–550, § 203(a)(5), inserted “or a violation of a substantially equivalent foreign statute” after “title 18”.
Subsec. (b)(4)(C). Pub. L. 101–550, § 203(a)(6), inserted “foreign person performing a function substantially equivalent to any of the above,” after “transfer agent,”, “or any substantially equivalent foreign statute or regulation” after “Commodity Exchange Act” wherever appearing, and “foreign entity substantially equivalent to any of the above,” after “insurance company,”.
Subsec. (b)(4)(G). Pub. L. 101–550, § 203(a)(7), added subpar. (G).
Subsec. (b)(6). Pub. L. 101–429, § 504(a), amended par. (6) generally. Prior to amendment, par. (6) read as follows: “The Commission, by order, shall censure or place limitations on the activities or functions of any person associated, seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated with a broker or dealer, or suspend for a period not exceeding twelve months or bar any such person from being associated with a broker or dealer, if the Commission finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or bar is in the public interest and that such person has committed or omitted any act or omission enumerated in subparagraph (A), (D), (E), or (G) of paragraph (4) of this subsection, has been convicted of any offense specified in subparagraph (B) of said paragraph (4) within ten years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of said paragraph (4). It shall be unlawful for any person as to whom such an order suspending or barring him from being associated with a broker or dealer is in effect willfully to become, or to be, associated with a broker or dealer without the consent of the Commission, and it shall be unlawful for any broker or dealer to permit such a person to become, or remain, a person associated with him without the consent of the Commission, if such broker or dealer knew, or in the exercise of reasonable care should have known, of such order.”
Pub. L. 101–550, § 203(c)(1), substituted “(A), (D), (E), or (G)” for “(A), (D), or (E)”.
Subsec. (g). Pub. L. 101–429, § 505, added subsec. (g).
1988—Subsec. (f). Pub. L. 100–704 added subsec. (f).
1987—Subsec. (b)(4)(B)(ii). Pub. L. 100–181, § 317(1), substituted “fiduciary, transfer agent, or” for “fiduciary, or any”.
Subsec. (b)(4)(C). Pub. L. 100–181, § 317(2), added subpar. (C) and struck out former subpar. (C) which read as follows: “is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an investment adviser, underwriter, broker, dealer, entity or person required to be registered under the Commodity Exchange Act, municipal securities dealer, government securities broker, or government securities dealer, or as an affiliated person or employee of any investment company, bank, entity or person required to be registered under such Act, or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity, or in connection with the purchase or sale of any security.”
Subsec. (b)(6). Pub. L. 100–181, § 317(3), substituted “seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated” for “or seeking to become associated,” in first sentence.
Subsec. (b)(10). Pub. L. 100–181, § 317(4), substituted “78q–1(b)(4)(A)” for “78q–1(b)(4)(B)”.
1986—Subsec. (b)(4)(A). Pub. L. 99–571, § 102(e)(1), inserted “or with any other appropriate regulatory agency”.
Subsec. (b)(4)(B)(ii). Pub. L. 99–571, § 102(e)(2), inserted “government securities broker, government securities dealer,”.
Subsec. (b)(4)(C). Pub. L. 99–571, § 102(e)(3), substituted “municipal securities dealer, government securities broker, or government securities dealer,” for “or municipal securities dealer,”.
Subsec. (b)(8). Pub. L. 99–571, § 102(e)(4), substituted “any registered broker or dealer” for “any broker or dealer required to register pursuant to this chapter” and struck out “an exempted security” after “other than”.
Subsec. (c)(3). Pub. L. 99–571, § 102(f), inserted “(other than a government securities broker or government securities dealer, except a registered broker or dealer)” and “(except a government security)”.
1984—Subsec. (b)(4)(B)(ii). Pub. L. 98–376, § 6(b)(1), substituted “fiduciary, or any entity or person required to be registered under the Commodity Exchange Act (7 U.S.C. 1 et seq.)” for “or fiduciary”.
Subsec. (b)(4)(C). Pub. L. 98–376, § 6(b)(2), inserted “entity or person required to be registered under the Commodity Exchange Act,” and “entity or person required to be registered under such Act”.
Subsec. (b)(4)(D), (E). Pub. L. 98–376, § 6(b)(3), inserted “the Commodity Exchange Act,”.
Subsec. (c)(4). Pub. L. 98–376, § 4, inserted reference to section 78n of this title and “and any person who was a cause of the failure to comply due to an act or omission the person knew or should have known would contribute to the failure to comply,”.
1983—Subsec. (b)(8). Pub. L. 98–38, § 3(a)(1), added par. (8) and struck out former par. (8), which had directed that, in addition to the fees and charges authorized by par. (7) of this subsection, each registered broker or dealer not a member of a registered securities association pay to the Commission such reasonable fees and charges as necessary to defray the costs of the additional regulatory duties required to be performed by the Commission because such broker or dealer effected transactions in securities otherwise than on a national securities exchange of which it was a member and was not a member of a registered securities association, and that the Commission, by rule, establish such fees and charges.
Subsec. (b)(9). Pub. L. 98–38, § 3(a)(2), added par. (9) and struck out former par. (9), which had provided that no broker or dealer subject to par. (8) of this subsection could effect any transaction in, or induce the purchase or sale of, any security (otherwise than on a national securities exchange of which it was a member) in contravention of such rules and regulations as the Commission might prescribe designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.
1977—Subsec. (d). Pub. L. 95–213 authorized the Commission to define, for purposes of this subsection, term “held of record”.
1975—Pub. L. 94–29, § 11(1), amended section catchline.
Subsec. (a). Pub. L. 94–29, § 11(2), required registration with the Commission of all persons utilizing an exchange’s facilities to effect transactions.
Subsec. (b). Pub. L. 94–29, § 11(2), expanded coverage to include municipal securities dealers, permitted nonbank municipal securities dealers and brokers to register company departments or divisions conducting municipal securities activities rather than the company of which the department or division is a part, subjected municipal securities and associated persons thereof to the Commission’s enforcement and disciplinary powers, updated the list of statutory offenses which bar a person from becoming a broker-dealer or an associated person of a broker-dealer, expanded Commission regulatory control to include all brokers and dealers executing transactions on exchanges of which such brokers and dealers are not members, required any registered broker-dealer who is not a member of a registered securities association to pay the Commission fees imposed by it to defray the costs of the additional regulatory duties to be performed by the Commission, and clarified the power of national securities exchanges, registered securities associations, and registered clearing agencies to make determinations as to whether a person is subject to statutory disqualification.
Subsec. (c)(1). Pub. L. 94–29, § 11(3), expanded the Commission’s authority to define devices, contrivances, acts, and practices deemed manipulative, deceptive, and otherwise fraudulent for municipal securities dealers as well as for brokers and dealers.
Subsec. (c)(2). Pub. L. 94–29, § 11(3), expanded the Commission’s authority to define quotations deemed to be fictitious for municipal securities dealers as well as for brokers and dealers.
Subsec. (c)(3). Pub. L. 94–29, § 11(3), inserted requirement that rules and regulations be promulgated no later than
Subsec. (c)(5). Pub. L. 94–29, § 11(4), substituted provisions authorizing the Commission to regulate trading activities of market makers other than specialists registered on a national securities exchange for provisions authorizing the Commission summarily to suspend trading, otherwise than on a national securities exchange, in any security other than an exempted security for a period not exceeding 10 days if the public interest and the protection of investors so requires.
Subsec. (c)(6). Pub. L. 94–29, § 11(5), added par. (6).
Subsec. (e). Pub. L. 94–29, § 11(6), added subsec. (e).
1970—Subsec. (c)(3). Pub. L. 91–598 extended Commission’s rulemaking power to both the exchange and the over-the-counter markets, striking out “otherwise than on a national securities exchange” before “in contravention of such rules and regulations” and substituting “shall prescribe” for “may prescribe” and provided for safeguards with respect to the related practices of brokers and dealers, including customers’ securities and customers’ deposits or credit balances, and maintenance of reserves with respect to such deposits or credit balances.
1964—Subsec. (a). Pub. L. 88–467, § 6(a), designated existing provisions as par. (1) and added par. (2).
Subsec. (b)(1). Pub. L. 88–467, § 6(b), designated first par. as (1) and substituted “persons associated with such broker or dealer” for “person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such broker or dealer,”.
Subsec. (b)(2). Pub. L. 88–467, § 6(b), designated second par. as (2) and substituted “associated with the applicant” for “directly or indirectly controlling or controlled by, or under direct or indirect common control with, the applicant”.
Subsec. (b)(3). Pub. L. 88–467, § 6(b), designated third par. as (3) and substituted “effective date of the registration” for “effective date thereof”.
Subsec. (b)(4). Pub. L. 88–467, § 6(b), added par. (4).
Subsec. (b)(5). Pub. L. 88–467, § 6(b), designated first sentence of fourth par, as (5), provided for censure and for suspension for period not exceeding twelve months, substituted the language “that such broker or dealer, whether prior or subsequent to becoming such, or any person associated with such broker or dealer, whether prior or subsequent to becoming so associated” for “that (1) such broker or dealer whether prior or subsequent to becoming such, or (2) any partner, officer, director, or branch manager of such broker or dealer (or any person occupying a similar status or performing similar functions), or any person directly or indirectly controlling or controlled by such broker or dealer, whether prior or subsequent to becoming such”, substituted in clause (A) the provision respecting false or misleading statements in any report required to, be filed with the Commission for such statements in any document supplemental to application for registration and inserted in such clause (A) the material fact omission provision, designated existing provisions of clause (B) as items (i) and (ii), included in item (ii) the business of investment broker, and added items (iii) and (iv), provided in clause (C) for enjoyment from acting as an investment adviser, underwriter, broker, or dealer, or as an affiliated person or employee of any investment company, bank, or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity, made clause (D) applicable to violations of the Investment Advisers Act of 1940 and the Investment Company Act of 1940, and added clauses (E) and (F).
Subsec. (b)(6). Pub. L. 88–467, § 6(b), designated second through fifth sentences of fourth par. as (6) and, in provision constituting first sentence of par. (6) substituted “any registration under this subsection” for “any such registration” and inserted “(which may consist solely of affidavits and oral argument)” after “opportunity for hearing”.
Subsec. (b)(7) to (10). Pub. L. 88–467, § 6(b), added pars. (7) to (10).
Subsec. (c)(4), (5). Pub. L. 88–467, § 6(c), added pars. (4) and (5).
Subsec. (d). Pub. L. 88–467, § 6(d), substituted provisions which require every issuer filing a registration statement under the Securities Act of 1933 to file for the fiscal year in which the registration statement becomes effective such reports as may be required by the Commission under section 78m of this title and provide for suspension of duty to file reports for any later fiscal years if at the beginning of such fiscal year the securities to which the registration statement relates are held of record by less than three hundred persons for former provisions which required the registration statement filed under the Securities Act to contain an undertaking if the value of the securities offered plus the value of other outstanding securities of the same class amounted to $2,000,000 or more and suspended the duty to file if the value of securities outstanding was reduced to less than $1,000,000 or the issuer had become subject to an equivalent reporting requirement and deleted “or to any other security which the Commission may by rules and regulations exempt as not comprehended within the purposes of this subsection” after “political subdivision thereof”.
1938—Subsec. (c)(2), (3). Act
1936—Act
Effective Date Of Amendment
Amendment by sections 173(c), 913(g)(1), (h)(1), 919, 921(a), 925(a)(1), 929L(3), 929X(c), 942(a), and 985(b)(5)(A) of Pub. L. 111–203 effective 1 day after
Amendment by section 713(a) of Pub. L. 111–203 effective on the later of 360 days after
Amendment by sections 762(d)(4) and 766(d) of Pub. L. 111–203 effective on the later of 360 days after
Pub. L. 111–203, title IX, § 975(i),
Amendment by Pub. L. 106–102 effective at the end of the 18-month period beginning on
Amendment by Pub. L. 104–67 not to affect or apply to any private action arising under this chapter or title I of the Securities Act of 1933 (15 U.S.C. 77a et seq.), commenced before and pending on
Amendment by section 504(a) of Pub. L. 101–429 effective 12 months after
Amendment by section 505 of Pub. L. 101–429 effective 18 months after
Pub. L. 100–704, § 9,
Amendment by Pub. L. 99–571 effective 270 days after
Amendment Pub. L. 98–376 effective
Pub. L. 98–38, § 3(b),
Amendment by Pub. L. 94–29 effective
Amendment by Pub. L. 88–467 of subsec. (a) of this section effective
Miscellaneous
Nothing in amendment by Pub. L. 104–67 to be deemed to create or ratify any implied right of action, or to prevent Commission, by rule or regulation, from restricting or otherwise regulating private actions under this chapter, see section 203 of Pub. L. 104–67, set out as a Construction note under section 78j–1 of this title.
Amendment by sections 105, 106(b)(2)(B), and 109(b)(2) of Pub. L. 103–202 not to be construed to govern initial issuance of any public debt obligation or to grant any authority to (or extend any authority of) the Securities and Exchange Commission, any appropriate regulatory agency, or a self-regulatory organization to prescribe any procedure, term, or condition of such initial issuance, to promulgate any rule or regulation governing such initial issuance, or to otherwise regulate in any manner such initial issuance, see section 111 of Pub. L. 103–202, set out as a note under section 78o–5 of this title.
Transfer Of Functions
For transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff.
Miscellaneous
Pub. L. 111–203, title IX, § 913(a)–(f),
[For definitions of terms used in section 913(a)–(f) of Pub. L. 111–203, set out above, see section 5301 of Title 12, Banks and Banking.]
Pub. L. 104–290, title V, § 510(d),
Pub. L. 101–429, title V, § 502,
Pub. L. 101–429, title V, § 504(b),