Government Securities Act of 1986 - Title I: Government Securities Brokers and Dealers - Amends the Securities Exchange Act of 1934 to prohibit any Government securities dealer or broker from using the mails or any means of interstate commerce to effect any transaction in Government securities unless: (1) such dealer or broker is registered in accordance with this Act; and (2) if registered, such dealer or broker has given the appropriate regulatory agency written notice that it is a Government securities dealer or broker. Requires a Government securities broker or dealer to notify the appropriate regulatory agency when it is no longer acting as such. Directs each regulatory agency to provide such notices to the Securities and Exchange Commission (SEC) which shall make them available to the public.
Provides that registration shall be accomplished by filing a registration application with the Commission containing such information and documents as the Commission may require. Directs the Commission, within 45 days, to: (1) grant registration; or (2) institute proceedings, to be concluded within 120 days, to determine whether registration should be denied.
Makes unlawful any act or practice or course of business forbidden by the Securities and Exchange Act by a registered Government securities broker or dealer, irrespective of the use of the mails or any means of interstate commerce.
Allows the Secretary of the Treasury to exempt any Government securities broker or dealer from the requirements of this Act upon finding that such an exemption is consistent with the public interest, the protection of investors, and the purposes of this Act. Directs the Secretary to prescribe rules governing such brokers and dealers which establish safeguards for financial responsibility and related practices and set forth reporting and recordkeeping requirements.
Authorizes the Commission to censure or impose restrictions on a registered Government securities broker or dealer or suspend or revoke the registration of such a broker or dealer, or to censure, suspend, or bar a person associated with a Government securities broker or dealer, if after notice and opportunity for hearing the Commission finds that such action would be in the public interest and that such broker, dealer, or associated person violated this Act. Permits a registered broker or dealer to voluntarily withdraw from registration. Authorizes the appropriate regulatory agencies to: (1) impose similar sanctions on a Government securities dealer or broker not required to register and on any associated person; and (2) enforce compliance by such an entity or person with the provisions of this Act. Requires such agencies to notify the Commission of any such sanctions imposed. Directs the Commission to maintain a public record of such sanctions and any sanctions it imposes.
Authorizes the appropriate regulatory agencies to: (1) examine all records of Government securities brokers and dealers at any time as the agency deems necessary or appropriate; and (2) make available information it receives concerning such an entity or associated person to the Commission, the Secretary, other appropriate regulatory agencies, and any self-regulatory organizations.
Requires Government securities brokers and dealers subject to registration under this Act to be members of a registered national securities exchange or a registered securities association, unless specifically exempted by the Commission.
Title II: Conforming Amendments - Part A: Conforming Definitions - Revises certain definitions for purposes of the Securities and Exchange Act of 1934.
Part B: Additional Conforming Amendments - Authorizes the Commission to impose sanctions on a broker or dealer for violations arising from activity as a Government securities broker or dealer.
Authorizes a registered securities association to implement rules governing member brokers and dealers, including rules to prohibit fraudulent, misleading, deceptive, and false advertising and rules to provide for the examination of the records of Government securities brokers and dealers. Authorizes such an association to: (1) deny or condition the membership of a Government securities broker or dealer which does not meet standards for financial responsibility or conduct under the Securities Exchange Act; and (2) bar any person from being associated with a member if such person has engaged in prohibited conduct or refused to provide requested information.
Applies Commission reporting requirements concerning missing, lost, counterfeit, and stolen securities to Government securities brokers and dealers. Directs the Secretary and the Commission to agree that the Commission will receive, store, and disseminate information in the possession of the Treasury concerning such securities.
Applies to the Secretary, with respect to rulemaking for Government securities brokers and dealers, rulemaking requirements concerning competitive effects and recordkeeping imposed on the Commission with respect to securities brokers and dealers.
Amends the Investment Company Act of 1940 to include as persons who are ineligible for service with investment companies: (1) any person who is enjoined from acting as a municipal securities dealer, Government securities broker or dealer, or entity or person required to be registered under the Commodity Exchange Act; and (2) any person who, within ten years, has been convicted of any felony or misdemeanor involving securities activities in such a capacity. Authorizes the Commission, after notice and a hearing, to prohibit any person who has violated or aided in the violation of the Commodity Exchange Act from serving a registered investment company. Amends the Investment Adviser Act to subject such persons to administrative sanctions by the Commission.
Amends the Securities Act of 1933 to include as an exempt security any security guaranteed by an insurance or endowment policy rated triple A by at least one nationally recognized rating agency.
Title III: Depository Institutions - Requires the Secretary to prescribe standards for the safeguarding and use of obligations issued or guaranteed by the United States or by a Government-sponsored corporation. Applies such standards to depository institutions that are not Government securities brokers or dealers and which hold such obligations for customers. Requires such standards to provide for adequate segregation of such obligations. Provides for the enforcement of such standards by the appropriate regulatory agencies which may issue cease and desist orders for violations. Directs the Secretary to determine whether a regulatory agency's rules meet the purposes of such standards and, if so, to exempt from such standards any depository institution subject to such rules.
Title IV: Transitional and Savings Provisions - Provides that the provisions of this Act shall not affect: (1) pending administrative proceedings; (2) suits commenced before the effective date of this Act; (3) the authority of the Federal Reserve Bank of New York to require reports or establish terms and conditions in connection with the Bank's relationship with any Government securities broker or dealer; or (4) the jurisdiction of the Commodity Futures Trading Commission over trading commodities futures contracts and options involving Government securities.
Title V: Report on Transfers of Government Securities - Requires the Commission to report to the Congress within one year on existing capabilities and potential future improvements for the clearance and settlement of transactions in the securities of Government-sponsored enterprises and of Government agencies other than the Department of the Treasury.
Title VI: Effective Dates - Sets forth the effective dates of provisions of, and regulations promulgated pursuant to, this Act.
Prohibits any person from acting as a Government securities broker or dealer after 270 days after enactment of this Act unless such person has been registered or has provided notice to the Commission or the appropriate regulatory agency as required by this Act.
Introduced in Senate
Read twice and referred to the Committee on Banking.
Committee on Banking. Ordered to be reported with an amendment in the nature of a substitute favorably.
Committee on Banking. Reported to Senate by Senator D'Amato under the authority of the order of Aug 16, 86 with an amendment in the nature of a substitute and an amendment to the title. With written report No. 99-426.
Committee on Banking. Reported to Senate by Senator D'Amato under the authority of the order of Aug 16, 86 with an amendment in the nature of a substitute and an amendment to the title. With written report No. 99-426.
Placed on Senate Legislative Calendar under General Orders. Calendar No. 876.
Indefinitely postponed by Senate by Voice Vote.
Measure laid before Senate by unanimous consent.
Senate incorporated this measure in H.R. 2032 as an amendment.
Senate passed companion measure H.R. 2032 in lieu of this measure by Voice Vote.
Star Print ordered report 99-426.
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