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U.S. Code as of:
01/19/04
Section 78o-5. Government securities brokers and dealers
(a) Registration requirements; notice to regulatory agencies;
manner of registration; exemption from registration requirements
(1)(A) It shall be unlawful for any government securities broker
or government securities dealer (other than a registered broker or
dealer or a financial institution) to make use of the mails or any
means or instrumentality of interstate commerce to effect any
transaction in, or to induce or attempt to induce the purchase or
sale of, any government security unless such government securities
broker or government securities dealer is registered in accordance
with paragraph (2) of this subsection.
(B)(i) It shall be unlawful for any government securities broker
or government securities dealer that is a registered broker or
dealer or a financial institution to make use of the mails or any
means or instrumentality of interstate commerce to effect any
transaction in, or to induce or attempt to induce the purchase or
sale of, any government security unless such government securities
broker or government securities dealer has filed with the
appropriate regulatory agency written notice that it is a
government securities broker or government securities dealer. When
such a government securities broker or government securities dealer
ceases to act as such it shall file with the appropriate regulatory
agency a written notice that it is no longer acting as a government
securities broker or government securities dealer.
(ii) Such notices shall be in such form and contain such
information concerning a government securities broker or government
securities dealer that is a financial institution and any persons
associated with such government securities broker or government
securities dealer as the Board of Governors of the Federal Reserve
System shall, by rule, after consultation with each appropriate
regulatory agency (including the Commission), prescribe as
necessary or appropriate in the public interest or for the
protection of investors. Such notices shall be in such form and
contain such information concerning a government securities broker
or government securities dealer that is a registered broker or
dealer and any persons associated with such government securities
broker or government securities dealer as the Commission shall, by
rule, prescribe as necessary or appropriate in the public interest
or for the protection of investors.
(iii) Each appropriate regulatory agency (other than the
Commission) shall make available to the Commission the notices
which have been filed with it under this subparagraph, and the
Commission shall maintain and make available to the public such
notices and the notices it receives under this subparagraph.
(2) A government securities broker or a government securities
dealer subject to the registration requirement of paragraph (1)(A)
of this subsection may be registered by filing with the Commission
an application for registration in such form and containing such
information and documents concerning such government securities
broker or government securities dealer and any persons associated
with such government securities broker or government securities
dealer as the Commission, by rule, may prescribe as necessary or
appropriate in the public interest or for the protection of
investors. Within 45 days of the date of filing of such application
(or within such longer period as to which the applicant consents),
the Commission shall -
(i) by order grant registration, or
(ii) 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 120 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 order granting registration shall not be
effective until such government securities broker or government
securities dealer has become a member of a national securities
exchange registered under section 78f of this title, or a
securities association registered under section 78o-3 of this
title, unless the Commission has exempted such government
securities broker or government securities dealer, by rule or
order, from such membership. The Commission may extend the time
for the conclusion of such proceedings for up to 90 days if it
finds good cause for such extension and publishes its reasons for
so finding or for such longer period as to which the applicant
consents.
The Commission shall grant the registration of a government
securities broker or a government securities dealer if the
Commission finds that the requirements of this section are
satisfied. The Commission shall deny such registration if it does
not make such a finding or if it finds that if the applicant were
so registered, its registration would be subject to suspension or
revocation under subsection (c) of this section.
(3) Any provision of this chapter (other than section 78e of this
title or paragraph (1) of this subsection) which prohibits any act,
practice, or course of business if the mails or any means or
instrumentality of interstate commerce is used in connection
therewith shall also prohibit any such act, practice, or course of
business by any government securities broker or government
securities dealer registered or having filed notice under paragraph
(1) of this subsection or any person acting on behalf of such
government securities broker or government securities dealer,
irrespective of any use of the mails or any means or
instrumentality of interstate commerce in connection therewith.
(4) No government securities broker or government securities
dealer that is required to register under paragraph (1)(A) and that
is not a member of the Securities Investor Protection Corporation
shall effect any transaction in any security in contravention of
such rules as the Commission shall prescribe pursuant to this
subsection to assure that its customers receive complete, accurate,
and timely disclosure of the inapplicability of Securities Investor
Protection Corporation coverage to their accounts.
(5) The Secretary of the Treasury (hereinafter in this section
referred to as the "Secretary"), by rule or order, upon the
Secretary's own motion or upon application, may conditionally or
unconditionally exempt any government securities broker or
government securities dealer, or class of government securities
brokers or government securities dealers, from any provision of
subsection (a), (b), or (d) of this section, other than subsection
(d)(3) of this section, or the rules thereunder, if the Secretary
finds that such exemption is consistent with the public interest,
the protection of investors, and the purposes of this chapter.
(b) Rules with respect to transactions in government securities
(1) The Secretary shall propose and adopt rules to effect the
purposes of this chapter with respect to transactions in government
securities effected by government securities brokers and government
securities dealers as follows:
(A) Such rules shall provide safeguards with respect to the
financial responsibility and related practices of government
securities brokers and government securities dealers including,
but not limited to, capital adequacy standards, the acceptance of
custody and use of customers' securities, the carrying and use of
customers' deposits or credit balances, and the transfer and
control of government securities subject to repurchase agreements
and in similar transactions.
(B) Such rules shall require every government securities broker
and government securities dealer to make reports to and furnish
copies of records to the appropriate regulatory agency, and to
file with the appropriate regulatory agency, annually or more
frequently, a balance sheet and income statement certified by an
independent public accountant, prepared on a calendar or fiscal
year basis, and such other financial statements (which shall, as
the Secretary specifies, be certified) and information concerning
its financial condition as required by such rules.
(C) Such rules shall require records to be made and kept by
government securities brokers and government securities dealers
and shall specify the periods for which such records shall be
preserved.
(2) Risk Assessment for Holding Company Systems. -
(A) Obligations to obtain, maintain, and report information. -
Every person who is registered as a government securities broker
or government securities dealer under this section shall obtain
such information and make and keep such records as the Secretary
by rule prescribes concerning the registered person's policies,
procedures, or systems for monitoring and controlling financial
and operational risks to it resulting from the activities of any
of its associated persons, other than a natural person. Such
records shall describe, in the aggregate, each of the financial
and securities activities conducted by, and customary sources of
capital and funding of, those of its associated persons whose
business activities are reasonably likely to have a material
impact on the financial or operational condition of such
registered person, including its capital, its liquidity, or its
ability to conduct or finance its operations. The Secretary, by
rule, may require summary reports of such information to be filed
with the registered person's appropriate regulatory agency no
more frequently than quarterly.
(B) Authority to require additional information. - If, as a
result of adverse market conditions or based on reports provided
pursuant to subparagraph (A) of this paragraph or other available
information, the appropriate regulatory agency reasonably
concludes that it has concerns regarding the financial or
operational condition of any government securities broker or
government securities dealer registered under this section, such
agency may require the registered person to make reports
concerning the financial and securities activities of any of such
person's associated persons, other than a natural person, whose
business activities are reasonably likely to have a material
impact on the financial or operational condition of such
registered person. The appropriate regulatory agency, in
requiring reports pursuant to this subparagraph, shall specify
the information required, the period for which it is required,
the time and date on which the information must be furnished, and
whether the information is to be furnished directly to the
appropriate regulatory agency or to a self-regulatory
organization with primary responsibility for examining the
registered person's financial and operational condition.
(C) Special provisions with respect to associated persons
subject to federal banking agency regulation. -
(i) Cooperation in implementation. - In developing and
implementing reporting requirements pursuant to subparagraph
(A) of this paragraph with respect to associated persons
subject to examination by or reporting requirements of a
Federal banking agency, the Secretary shall consult with and
consider the views of each such Federal banking agency. If a
Federal banking agency comments in writing on a proposed rule
of the Secretary under this paragraph that has been published
for comment, the Secretary shall respond in writing to such
written comment before adopting the proposed rule. The
Secretary shall, at the request of a Federal banking agency,
publish such comment and response in the Federal Register at
the time of publishing the adopted rule.
(ii) Use of banking agency reports. - A registered government
securities broker or government securities dealer shall be in
compliance with any recordkeeping or reporting requirement
adopted pursuant to subparagraph (A) of this paragraph
concerning an associated person that is subject to examination
by or reporting requirements of a Federal banking agency if
such government securities broker or government securities
dealer utilizes for such recordkeeping or reporting requirement
copies of reports filed by the associated person with the
Federal banking agency pursuant to section 161 of title 12,
subchapter VIII of chapter 3 of title 12, section 1817(a) of
title 12, section 1467a(b) of title 12, or section 1847 of
title 12. The Secretary may, however, by rule adopted pursuant
to subparagraph (A), require any registered government
securities broker or government securities dealer filing such
reports with the appropriate regulatory agency to obtain,
maintain, or report supplemental information if the Secretary
makes an explicit finding, based on information provided by the
appropriate regulatory agency, that such supplemental
information is necessary to inform the appropriate regulatory
agency regarding potential risks to such government securities
broker or government securities dealer. Prior to requiring any
such supplemental information, the Secretary shall first
request the Federal banking agency to expand its reporting
requirements to include such information.
(iii) Procedure for requiring additional information. - Prior
to making a request pursuant to subparagraph (B) of this
paragraph for information with respect to an associated person
that is subject to examination by or reporting requirements of
a Federal banking agency, the appropriate regulatory agency
shall -
(I) notify such banking agency of the information required
with respect to such associated person; and
(II) consult with such agency to determine whether the
information required is available from such agency and for
other purposes, unless the appropriate regulatory agency
determines that any delay resulting from such consultation
would be inconsistent with ensuring the financial and
operational condition of the government securities broker or
government securities dealer or the stability or integrity of
the securities markets.
(iv) Exclusion for examination reports. - Nothing in this
subparagraph shall be construed to permit the Secretary or an
appropriate regulatory agency to require any registered
government securities broker or government securities dealer to
obtain, maintain, or furnish any examination report of any
Federal banking agency or any supervisory recommendations or
analysis contained therein.
(v) Confidentiality of information provided. - No information
provided to or obtained by an appropriate regulatory agency
from any Federal banking agency pursuant to a request under
clause (iii) of this subparagraph regarding any associated
person which is subject to examination by or reporting
requirements of a Federal banking agency may be disclosed to
any other person (other than a self-regulatory organization),
without the prior written approval of the Federal banking
agency. Nothing in this clause shall authorize the Secretary or
any appropriate regulatory agency to withhold information from
Congress, or prevent the Secretary or any appropriate
regulatory agency from complying with a request for information
from any other Federal department or agency requesting the
information for purposes within the scope of its jurisdiction,
or complying with an order of a court of the United States in
an action brought by the United States or the Commission.
(vi) Notice to banking agencies concerning financial and
operational condition concerns. - The Secretary or appropriate
regulatory agency shall notify the Federal banking agency of
any concerns of the Secretary or the appropriate regulatory
agency regarding significant financial or operational risks
resulting from the activities of any government securities
broker or government securities dealer to any associated person
thereof which is subject to examination by or reporting
requirements of the Federal banking agency.
(vii) Definition. - For purposes of this subparagraph, the
term "Federal banking agency" shall have the same meaning as
the term "appropriate Federal banking agency" in section
1813(q) of title 12.
(D) Exemptions. - The Secretary by rule or order may exempt any
person or class of persons, under such terms and conditions and
for such periods as the Secretary shall provide in such rule or
order, from the provisions of this paragraph, and the rules
thereunder. In granting such exemptions, the Secretary shall
consider, among other factors -
(i) whether information of the type required under this
paragraph is available from a supervisory agency (as defined in
section 3401(6) (!1) of title 12), a State insurance commission
or similar State agency, the Commodity Futures Trading
Commission, or a similar foreign regulator;
(ii) the primary business of any associated person;
(iii) the nature and extent of domestic or foreign regulation
of the associated person's activities;
(iv) the nature and extent of the registered person's
securities transactions; and
(v) with respect to the registered person and its associated
persons, on a consolidated basis, the amount and proportion of
assets devoted to, and revenues derived from, activities in the
United States securities markets.
(E) Conformity with requirements under section 78q(h). - In
exercising authority pursuant to subparagraph (A) of this
paragraph concerning information with respect to associated
persons of government securities brokers and government
securities dealers who are also associated persons of registered
brokers or dealers reporting to the Commission pursuant to
section 78q(h) of this title, the requirements relating to such
associated persons shall conform, to the greatest extent
practicable, to the requirements under section 78q(h) of this
title.
(F) Authority to limit disclosure of information. -
Notwithstanding any other provision of law, the Secretary and any
appropriate regulatory agency shall not be compelled to disclose
any information required to be reported under this paragraph, or
any information supplied to the Secretary or any appropriate
regulatory agency by any domestic or foreign regulatory agency
that relates to the financial or operational condition of any
associated person of a registered government securities broker or
a government securities dealer. Nothing in this paragraph shall
authorize the Secretary or any appropriate regulatory agency to
withhold information from Congress, or prevent the Secretary or
any appropriate regulatory agency from complying with a request
for information from any other Federal department or agency
requesting the information for purposes within the scope of its
jurisdiction, or complying with an order of a court of the United
States in an action brought by the United States or the
Commission. For purposes of section 552 of title 5, this
paragraph shall be considered a statute described in subsection
(b)(3)(B) of such section 552.
(3)(A) With respect to any financial institution that has filed
notice as a government securities broker or government securities
dealer or that is required to file notice under subsection
(a)(1)(B) of this section, the appropriate regulatory agency for
such government securities broker or government securities dealer
may issue such rules and regulations with respect to transactions
in government securities as may be necessary to prevent fraudulent
and manipulative acts and practices and to promote just and
equitable principles of trade. If the Secretary of the Treasury
determines, and notifies the appropriate regulatory agency, that
such rule or regulation, if implemented, would, or as applied does
(i) adversely affect the liquidity or efficiency of the market for
government securities; or (ii) impose any burden on competition not
necessary or appropriate in furtherance of the purposes of this
section, the appropriate regulatory agency shall, prior to adopting
the proposed rule or regulation, find that such rule or regulation
is necessary and appropriate in furtherance of the purposes of this
section notwithstanding the Secretary's determination.
(B) The appropriate regulatory agency shall consult with and
consider the views of the Secretary prior to approving or amending
a rule or regulation under this paragraph, except where the
appropriate regulatory agency determines that an emergency exists
requiring expeditious and summary action and publishes its reasons
therefor. If the Secretary comments in writing to the appropriate
regulatory agency on a proposed rule or regulation that has been
published for comment, the appropriate regulatory agency shall
respond in writing to such written comment before approving the
proposed rule or regulation.
(C) In promulgating rules under this section, the appropriate
regulatory agency shall consider the sufficiency and
appropriateness of then existing laws and rules applicable to
government securities brokers, government securities dealers, and
persons associated with government securities brokers and
government securities dealers.
(4) Rules promulgated and orders issued under this section shall
-
(A) be designed to prevent fraudulent and manipulative acts and
practices and to protect the integrity, liquidity, and efficiency
of the market for government securities, investors, and the
public interest; and
(B) not be designed to permit unfair discrimination between
customers, issuers, government securities brokers, or government
securities dealers, or to impose any burden on competition not
necessary or appropriate in furtherance of the purposes of this
chapter.
(5) In promulgating rules and issuing orders under this section,
the Secretary -
(A) may appropriately classify government securities brokers
and government securities dealers (taking into account relevant
matters, including types of business done, nature of securities
other than government securities purchased or sold, and character
of business organization) and persons associated with government
securities brokers and government securities dealers;
(B) may determine, to the extent consistent with paragraph (2)
of this subsection and with the public interest, the protection
of investors, and the purposes of this chapter, not to apply, in
whole or in part, certain rules under this section, or to apply
greater, lesser, or different standards, to certain classes of
government securities brokers, government securities dealers, or
persons associated with government securities brokers or
government securities dealers;
(C) shall consider the sufficiency and appropriateness of then
existing laws and rules applicable to government securities
brokers, government securities dealers, and persons associated
with government securities brokers and government securities
dealers; and
(D) shall consult with and consider the views of the Commission
and the Board of Governors of the Federal Reserve System, except
where the Secretary determines that an emergency exists requiring
expeditious or summary action and publishes its reasons for such
determination.
(6) If the Commission or the Board of Governors of the Federal
Reserve System comments in writing on a proposed rule of the
Secretary that has been published for comment, the Secretary shall
respond in writing to such written comment before approving the
proposed rule.
(7) No government securities broker or government securities
dealer shall make use of the mails or any means or instrumentality
of interstate commerce to effect any transaction in, or to induce
or attempt to induce the purchase or sale of, any government
security in contravention of any rule under this section.
(c) Sanctions for violations
(1) With respect to any government securities broker or
government securities dealer registered or required to register
under subsection (a)(1)(A) of this section -
(A) The Commission, by order, shall censure, place limitations
on the activities, functions, or operations of, suspend for a
period not exceeding 12 months, or revoke the registration of
such government securities broker or government securities
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
government securities broker or government securities dealer, or
any person associated with such government securities broker or
government securities dealer (whether prior or subsequent to
becoming so associated), has committed or omitted any act, or is
subject to an order or finding, enumerated in subparagraph (A),
(D), (E), (H), or (G) of paragraph (4) of section 78o(b) of this
title, has been convicted of any offense specified in
subparagraph (B) of such paragraph (4) within 10 years of the
commencement of the proceedings under this paragraph, or is
enjoined from any action, conduct, or practice specified in
subparagraph (C) of such paragraph (4).
(B) Pending final determination whether registration of any
government securities broker or government securities dealer
shall be revoked, the Commission, by order, may suspend such
registration, if such suspension appears to the Commission, after
notice and opportunity for hearing, to be necessary or
appropriate in the public interest or for the protection of
investors. Any registered government securities broker or
registered government securities dealer may, upon such terms and
conditions as the Commission may deem necessary in the public
interest or for the protection of investors, withdraw from
registration by filing a written notice of withdrawal with the
Commission. If the Commission finds that any registered
government securities broker or registered government securities
dealer is no longer in existence or has ceased to do business as
a government securities broker or government securities dealer,
the Commission, by order, shall cancel the registration of such
government securities broker or government securities dealer.
(C) The Commission, by order, shall censure or place
limitations on the activities or functions of any person
associated, or seeking to become associated, with a government
securities broker or government securities dealer registered or
required to register under subsection (a)(1)(A) of this section
or suspend for a period not exceeding 12 months or bar any such
person from being associated with such a government securities
broker or government securities 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 is subject to an order or finding, enumerated in
subparagraph (A), (D), (E), (H), or (G) of paragraph (4) of
section 78o(b) of this title, has been convicted of any offense
specified in subparagraph (B) of such paragraph (4) within 10
years of the commencement of the proceedings under this
paragraph, or is enjoined from any action, conduct, or practice
specified in subparagraph (C) of such paragraph (4).
(2)(A) With respect to any government securities broker or
government securities dealer which is not registered or required to
register under subsection (a)(1)(A) of this section, the
appropriate regulatory agency for such government securities broker
or government securities dealer may, in the manner and for the
reasons specified in paragraph (1)(A) of this subsection, censure,
place limitations on the activities, functions, or operations of,
suspend for a period not exceeding 12 months, or bar from acting as
a government securities broker or government securities dealer any
such government securities broker or government securities dealer,
and may sanction any person associated with such government
securities broker or government securities dealer in the manner and
for the reasons specified in paragraph (1)(C) of this subsection.
(B) In addition, where applicable, such appropriate regulatory
agency may, in accordance with section 1818 of title 12, section
1464 of title 12, or section 1730 (!2) of title 12, enforce
compliance by such government securities broker or government
securities dealer or any person associated with such government
securities broker or government securities dealer with the
provisions of this section and the rules thereunder.
(C) For purposes of subparagraph (B) of this paragraph, any
violation of any such provision shall constitute adequate basis for
the issuance of any order under section 1818(b) or (c) of title 12,
section 1464(d)(2) or (d)(3) (!2) of title 12, or section 1730(e)
or (f) (!2) of title 12, and the customers of any such government
securities broker or government securities dealer shall be deemed,
respectively, "depositors" as that term is used in section 1818(c)
of title 12, "savings account holders" as that term is used in
section 1464(d)(3) (!2) of title 12, or "insured members" as that
term is used in section 1730(f) (!2) of title 12.
(D) Nothing in this paragraph shall be construed to affect in any
way the powers of such appropriate regulatory agency to proceed
against such government securities broker or government securities
dealer under any other provision of law.
(E) Each appropriate regulatory agency (other than the
Commission) shall promptly notify the Commission after it has
imposed any sanction under this paragraph on a government
securities broker or government securities dealer, or a person
associated with a government securities broker or government
securities dealer, and the Commission shall maintain, and make
available to the public, a record of such sanctions and any
sanctions imposed by it under this subsection.
(3) It shall be unlawful for any person as to whom an order
entered pursuant to paragraph (1) or (2) of this subsection
suspending or barring him from being associated with a government
securities broker or government securities dealer is in effect
willfully to become, or to be, associated with a government
securities broker or government securities dealer without the
consent of the appropriate regulatory agency, and it shall be
unlawful for any government securities broker or government
securities dealer to permit such a person to become, or remain, a
person associated with it without the consent of the appropriate
regulatory agency, if such government securities broker or
government securities dealer knew, or, in the exercise of
reasonable care should have known, of such order.
(d) Records of brokers and dealers subject to examination
(1) All records of a government securities broker or government
securities dealer are subject at any time, or from time to time, to
such reasonable periodic, special, or other examinations by
representatives of the appropriate regulatory agency for such
government securities broker or government securities dealer as
such appropriate regulatory agency deems necessary or appropriate
in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of this chapter.
(2) Information received by an appropriate regulatory agency, the
Secretary, or the Commission from or with respect to any government
securities broker, government securities dealer, any person
associated with a government securities broker or government
securities dealer, or any other person subject to this section or
rules promulgated thereunder, may be made available by the
Secretary or the recipient agency to the Commission, the Secretary,
the Department of Justice, the Commodity Futures Trading
Commission, any appropriate regulatory agency, any self-regulatory
organization, or any Federal Reserve Bank.
(3) Government Securities Trade Reconstruction. -
(A) Furnishing records. - Every government securities broker
and government securities dealer shall furnish to the Commission
on request such records of government securities transactions,
including records of the date and time of execution of trades, as
the Commission may require to reconstruct trading in the course
of a particular inquiry or investigation being conducted by the
Commission for enforcement or surveillance purposes. In requiring
information pursuant to this paragraph, the Commission shall
specify the information required, the period for which it is
required, the time and date on which the information must be
furnished, and whether the information is to be furnished
directly to the Commission, to the Federal Reserve Bank of New
York, or to an appropriate regulatory agency or self-regulatory
organization with responsibility for examining the government
securities broker or government securities dealer. The Commission
may require that such information be furnished in machine
readable form notwithstanding any limitation in subparagraph (B).
In utilizing its authority to require information in machine
readable form, the Commission shall minimize the burden such
requirement may place on small government securities brokers and
dealers.
(B) Limitation; construction. - The Commission shall not
utilize its authority under this paragraph to develop regular
reporting requirements, except that the Commission may require
information to be furnished under this paragraph as frequently as
necessary for particular inquiries or investigations for
enforcement or surveillance purposes. This paragraph shall not be
construed as requiring, or as authorizing the Commission to
require, any government securities broker or government
securities dealer to obtain or maintain any information for
purposes of this paragraph which is not otherwise maintained by
such broker or dealer in accordance with any other provision of
law or usual and customary business practice. The Commission
shall, where feasible, avoid requiring any information to be
furnished under this paragraph that the Commission may obtain
from the Federal Reserve Bank of New York.
(C) Procedures for requiring information. - At the time the
Commission requests any information pursuant to subparagraph (A)
with respect to any government securities broker or government
securities dealer for which the Commission is not the appropriate
regulatory agency, the Commission shall notify the appropriate
regulatory agency for such government securities broker or
government securities dealer and, upon request, furnish to the
appropriate regulatory agency any information supplied to the
Commission.
(D) Consultation. - Within 90 days after December 17, 1993, and
annually thereafter, or upon the request of any other appropriate
regulatory agency, the Commission shall consult with the other
appropriate regulatory agencies to determine the availability of
records that may be required to be furnished under this paragraph
and, for those records available directly from the other
appropriate regulatory agencies, to develop a procedure for
furnishing such records expeditiously upon the Commission's
request.
(E) Exclusion for examination reports. - Nothing in this
paragraph shall be construed so as to permit the Commission to
require any government securities broker or government securities
dealer to obtain, maintain, or furnish any examination report of
any appropriate regulatory agency other than the Commission or
any supervisory recommendations or analysis contained in any such
examination report.
(F) Authority to limit disclosure of information. -
Notwithstanding any other provision of law, the Commission and
the appropriate regulatory agencies shall not be compelled to
disclose any information required or obtained under this
paragraph. Nothing in this paragraph shall authorize the
Commission or any appropriate regulatory agency to withhold
information from Congress, or prevent the Commission or any
appropriate regulatory agency 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 from complying with an order of a court of the
United States in an action brought by the United States, the
Commission, or the appropriate regulatory agency. For purposes of
section 552 of title 5, this subparagraph shall be considered a
statute described in subsection (b)(3)(B) of such section 552.
(e) Membership in national securities exchange; exemptions
(1) It shall be unlawful for any government securities broker or
government securities dealer registered or required to register
with the Commission under subsection (a)(1)(A) of this section to
effect any transaction in, or induce or attempt to induce the
purchase or sale of, any government security, unless such
government securities broker or government securities dealer is a
member of a national securities exchange registered under section
78f of this title or a securities association registered under
section 78o-3 of this title.
(2) The Commission, after consultation with the Secretary, 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 government
securities broker or government securities dealer or class of
government securities brokers or government securities dealers
specified in such rule or order.
(f) Large position reporting
(1) Reporting requirements
The Secretary may adopt rules to require specified persons
holding, maintaining, or controlling large positions in
to-be-issued or recently issued Treasury securities to file such
reports regarding such positions as the Secretary determines to
be necessary and appropriate for the purpose of monitoring the
impact in the Treasury securities market of concentrations of
positions in Treasury securities and for the purpose of otherwise
assisting the Commission in the enforcement of this chapter,
taking into account any impact of such rules on the efficiency
and liquidity of the Treasury securities market and the cost to
taxpayers of funding the Federal debt. Unless otherwise specified
by the Secretary, reports required under this subsection shall be
filed with the Federal Reserve Bank of New York, acting as agent
for the Secretary. Such reports shall, on a timely basis, be
provided directly to the Commission by the person with whom they
are filed.
(2) Recordkeeping requirements
Rules under this subsection may require persons holding,
maintaining, or controlling large positions in Treasury
securities to make and keep for prescribed periods such records
as the Secretary determines are necessary or appropriate to
ensure that such persons can comply with reporting requirements
under this subsection.
(3) Aggregation rules
Rules under this subsection -
(A) may prescribe the manner in which positions and accounts
shall be aggregated for the purpose of this subsection,
including aggregation on the basis of common ownership or
control; and
(B) may define which persons (individually or as a group)
hold, maintain, or control large positions.
(4) Definitional authority; determination of reporting threshold
(A) In prescribing rules under this subsection, the Secretary
may, consistent with the purpose of this subsection, define terms
used in this subsection that are not otherwise defined in section
78c of this title.
(B) Rules under this subsection shall specify -
(i) the minimum size of positions subject to reporting under
this subsection, which shall be no less than the size that
provides the potential for manipulation or control of the
supply or price, or the cost of financing arrangements, of an
issue or the portion thereof that is available for trading;
(ii) the types of positions (which may include financing
arrangements) to be reported;
(iii) the securities to be covered; and
(iv) the form and manner in which reports shall be
transmitted, which may include transmission in machine readable
form.
(5) Exemptions
Consistent with the public interest and the protection of
investors, the Secretary by rule or order may exempt in whole or
in part, conditionally or unconditionally, any person or class of
persons, or any transaction or class of transactions, from the
requirements of this subsection.
(6) Limitation on disclosure of information
Notwithstanding any other provision of law, the Secretary and
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 Secretary or the Commission
to withhold information from Congress, or prevent the Secretary
or 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
from complying with an order of a court of the United States in
an action brought by the United States, the Secretary, or the
Commission. For purposes of section 552 of title 5, this
paragraph shall be considered a statute described in subsection
(b)(3)(B) of such section 552.
(g) Effect on other laws; authority of Commission
(1) Nothing in this section except paragraph (2) of this
subsection shall be construed to impair or limit the authority
under any other provision of law of the Commission, the Secretary
of the Treasury, the Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, the Director of the Office of Thrift
Supervision, the Federal Savings and Loan Insurance Corporation,
the Secretary of Housing and Urban Development, and the Government
National Mortgage Association.
(2) Notwithstanding any other provision of this chapter, the
Commission shall not have any authority to make investigations of,
require the filing of a statement by, or take any other action
under this chapter against a government securities broker or
government securities dealer, or any person associated with a
government securities broker or government securities dealer, for
any violation or threatened violation of the provisions of this
section, other than subsection (d)(3) of this section (!3) or the
rules or regulations thereunder, unless the Commission is the
appropriate regulatory agency for such government securities broker
or government securities dealer. Nothing in the preceding sentence
shall be construed to limit the authority of the Commission with
respect to violations or threatened violations of any provision of
this chapter other than this section (except subsection (d)(3) of
this section), the rules or regulations under any such other
provision, or investigations pursuant to section 78u(a)(2) of this
title to assist a foreign securities authority.
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