Securities Exchange Act Amendments

(LATEST SUMMARY)

Securities Acts Amendments - =Title I: Selection and Administration of the Commission= - Makes changes in the terms of appointment of Securities and Exchange commissioners.

Authorizes the Securities and Exchange Commission (SEC) to conduct its own civil litigation, excluding litigation in the Supreme Court.

Requires the SEC to submit any budget request to the Congress concurrently with transmittal to the Office of Management and Budget. Provides that when the SEC transmits any legislative recommendations, testimony, or comment on legislation to the Executive, it shall concurrently transmit a copy to the Congress.

Authorizes appropriations for carrying out the functions of the SEC.

=Title II: Regulation of Exchanges and Associations= - Includes within the term "member," for purposes of the Act, any person who agrees to be regulated by an exchange and with respect to whom the exchange undertakes to enforce the Federal securities laws and the exchange rules.

Revises the regulatory provisions of the Securities Exchange Act relating to registered national securities exchanges and associations.

States that any registered broker or dealer meeting applicable capital or competency requirements must be allowed to join any registered national securities exchange.

Requires at least half of the governing body of every such exchange to be composed of "public representatives," and requires the exchange to provide adequate resources to permit the public represenatives to employ staff or retain professional personnel independent of the exchange staff.

Allows the SEC to exempt proposed amendments to an exchange's rules from the public comment requirements of this Act.

Provides that any proposed change in exchange rules must be filed with the SEC, which must publish such proposed change and allow interested persons a reasonable opportunity for comment thereon. States that the proposed change shall take effect 45 days after publication by the SEC unless the SEC disapproves it.

Gives persons denied membership on an exchange the right to seek review of such denial by the SEC.

Permits members disciplined by an exchange to appeal such action to the SEC.

Sets forth procedures to be followed in such disciplinary actions. Requires specificity of charges, an opportunity to be heard, and review within 30 days by the SEC. Permits the SEC to confirm, reduce, cancel, or require the remission of sanctions against exchange members.

Grants the SEC power to authorize exchanges to regulate non-member brokers and dealers in specified circumstances.

Describes procedures and conditions under which brokers and dealers registered under this title may become members of national securities exchanges, as well as conditions under which membership may be denied.

States that after May 1, 1975, no national securities exchange may fix or impose any schedule or rate of commission, allowance, or discount, with defined exceptions.

Establishes new procedures to be followed by the SEC in compelling exchanges and registered associations to change their rules.

Authorizes the SEC to suspend for up to 12 months or to revoke the registration of an exchange for failure to comply with this title; to similarly suspend or to expel a member from an exchange who has violated the Securities Act of 1933, this title, or other specified Acts; to remove officers or employees of exchanges or associations who have willfully failed to enforce compliance with this title; and to summarily suspend trading in any registered security on any national securities exchange for ten days, or with the authority of the President to suspend all trading on such an exchange for 30 days.

Grants the SEC investigatory powers in cases of violations or prospective violations of this title. Empowers the SEC to issue subpenas for such purposes. Authorizes it to seek equitable relief to enjoin violations of this title.

Sets forth procedures and conditions under which an association may register with the SEC as a national securities association. Sets forth requirements for such associations relating to rules, composition, fees, disciplinary action, and membership. Provides similar procedures and conditions for amendments to association rules, for discipline and for association membership as were prescribed for exchanges.

=Title III: Financial Responsibility; Regulation of Brokers and Dealers; Reports and Examinations= - Broadens existing prohibitions on improper hypothecation of securities by brokers, dealers and members to embrace improper lending of such securities.

Requires all members of a registered national securities exchange to register with the SEC.

Requires persons registering as broker dealers to file certified financial statements with their application (rather than verified statements).

Requires the SEC to order effective an application for registration as a broker-dealer.

Requires that, within six months of the granting of an application for registration, the SEC, or an exchange or the National Association of Securities Dealers (NASD) as designated by the SEC, examine the new broker-dealer to determine whether it is operating in conformity with the Federal securities laws.

Adds armed robbery and grand larceny to the list of statutory offenses which bar a person from becoming a broker-dealer.

Requires the SEC, in cooperation with the exchanges and the NASD, to devise and administer a uniform examination which, with respect to partners, officers, and supervisory employees shall include questions relating to enumerated matters.

Directs the SEC, by no later than January 1, 1974, to establish minimum capital requirements, providing for ample, liquid and permanent capital for brokers, dealers and members.

Authorizes the SEC to classify brokers, dealers and members for purposes of establishing such requirements.

Prohibits the SEC from exempting from such requirements any broker, dealer or member.

Requires registered national securities exchanges to furnish copies of documents to the SEC upon request.

Requires registered brokers, dealers and members to supply their customers with certified comparative balance sheets and income statements.

Authorizes the SEC to adopt rules concerning a consolidated transactional tape and a composite quotation system and to prescribe uniformity in accounting procedures and systems of brokers and dealers and members.

=Title IV: Development of a National Clearance and Settlement System= - Authorizes the SEC to make rules applicable to brokers or dealers regulating the time and method of making settlements, payments and deliveries and closing of accounts. Provides that, in the exercise of this rulemaking authority, the SEC shall not affect the authority of the Board of Governors of the Federal Reserve System to regulate securities credit.

Requires transfer agents to register with the appropriate regulatory agency, as defined in this title.

Requires clearing agencies and securities depositories to register with the SEC, and establishes appropriate procedures.

Sets forth procedures under which the SEC must grant or deny applications for registration of clearing agencies and securities depositories.

Authorizes the SEC to establish terms and conditions under which a clearing agency or securities depository may withdraw from registration, and for the appropriate regulatory agencies to similarly act for transfer agents.

Gives the SEC direct rulemaking power over clearing agencies and securities depositories.

Empowers the SEC to review clearing agency or securities depository action in the areas of disciplinary action or denial of admission to a participant.

Grants the SEC disciplinary powers with respect to clearing agencies and securities depositories.

Grants such power over transfer agents to the appropriate regulatory agency.

Requires clearing agencies, securities depositories, and transfer agents to keep records as the SEC may require and to keep such records available for inspection by the SEC or the appropriate regulatory agency.

Directs the SEC to, on or before December 31, 1976, take appropriate steps to eliminate the use of the stock certificate as a means of settlement of securities transactions between brokers and dealers.

Authorizes the SEC to grant confidential treatment to material filed with it only under very limited conditions, including a finding that disclosure is not in the public interest.

Empowers the SEC to prescribe rules with respect to the form or format of securities issued by companies, any class of whose securities is registered under the Act, or which would be required to be so registered except for the exemption from registration provided for securities of registered investment companies or insurance companies under certain conditions.

Authorizes every issuer whose securities are registered on a national securites exchange to consolidate in a single person the functions of transfer agent and registrar.

Directs the Commission to conduct a study to consider the public policy implications of the growing practice of registering securities in "street name" and to determine whether steps can be taken to facilitate communications between corporations and their shareholders while, at the same time, retaining benefits of such registration.

Prohibits the imposition of state or local taxes on securities, or on the transfer of securities, solely because the facilities of a registered clearing agency or securities depository are physically located in the taxing jurisdiction.

Requires registered national securities exchanges, associations, brokers, dealers, clearing agencies and securities depositories to: (1) report information about missing, lost or stolen securities to the SEC or such person as the SEC designates; and (2) require the fingerprinting of partners, directors, officers, and employees and the submittal of such fingerprints to the Attorney General of the United States for identification and appropriate processing.

=Title V: Miscellaneous= - Requires the SEC to include in its annual report to Congress certain designated information concerning the Commission's administration of the Freedom of Information Act and information concerning the effects its rules and regulations are having on the viability of small brokers and dealers.

Raises the amount of the registration fee every national securities exchange must pay to the SEC from 1/500th of one percent to 1/100th of one percent of the dollar amount of sales of securities (other than certain Governmental obligations) transacted on that exchange.

Requires registered brokers or dealers to pay to the SEC before March 15 of each year a fee equal to 1/100 of one percent of the amount of the sales of securities listed for trading on a registered national securities exchange pursuant to this title.

=Title VI: Development of a National Securities Market System= - Directs the SEC to take such steps as are within its power to establish a national market system for transactions in securities, which shall include a transactional reporting system, a composite quotation system, and rules and regulations designed to provide fair competition.

Sets restrictions upon the use of the mails or other means of interstate commerce by dealers.

Requires the SEC to prescribe rules and regulations for the protection of investors.

Directs the SEC to study the need for establishing a national regulatory body to administer the national market system. Directs the SEC to study the need for regulation of persons who are not defined as brokers or dealers, but who maintain accounts on behalf of public customers for buying and selling securities.

States that after July 1, 1975, no national securities exchange or national securities association may limit a member's ability to transact business on any other exchange or otherwise than on an exchange, except pursuant to a rule of such exchange or association which is approved as consistent with the purposes of this title and such member's agency obligation to its customer.