15 U.S.C. § 78b : US Code - Section 78B: Necessity for regulation

Search 15 U.S.C. § 78b : US Code - Section 78B: Necessity for regulation

For the reasons hereinafter enumerated, transactions in
securities as commonly conducted upon securities exchanges and over-
the-counter markets are affected with a national public interest
which makes it necessary to provide for regulation and control of
such transactions and of practices and matters related thereto,
including transactions by officers, directors, and principal
security holders, to require appropriate reports to remove
impediments to and perfect the mechanisms of a national market
system for securities and a national system for the clearance and
settlement of securities transactions and the safeguarding of
securities and funds related thereto, and to impose requirements
necessary to make such regulation and control reasonably complete
and effective, in order to protect interstate commerce, the
national credit, the Federal taxing power, to protect and make more
effective the national banking system and Federal Reserve System,
and to insure the maintenance of fair and honest markets in such
transactions:
(1) Such transactions (a) are carried on in large volume by the
public generally and in large part originate outside the States
in which the exchanges and over-the-counter markets are located
and/or are effected by means of the mails and instrumentalities
of interstate commerce; (b) constitute an important part of the
current of interstate commerce; (c) involve in large part the
securities of issuers engaged in interstate commerce; (d) involve
the use of credit, directly affect the financing of trade,
industry, and transportation in interstate commerce, and directly
affect and influence the volume of interstate commerce; and
affect the national credit.
(2) The prices established and offered in such transactions are
generally disseminated and quoted throughout the United States
and foreign countries and constitute a basis for determining and
establishing the prices at which securities are bought and sold,
the amount of certain taxes owing to the United States and to the
several States by owners, buyers, and sellers of securities, and
the value of collateral for bank loans.
(3) Frequently the prices of securities on such exchanges and
markets are susceptible to manipulation and control, and the
dissemination of such prices gives rise to excessive speculation,
resulting in sudden and unreasonable fluctuations in the prices
of securities which (a) cause alternately unreasonable expansion
and unreasonable contraction of the volume of credit available
for trade, transportation, and industry in interstate commerce,
(b) hinder the proper appraisal of the value of securities and
thus prevent a fair calculation of taxes owing to the United
States and to the several States by owners, buyers, and sellers
of securities, and (c) prevent the fair valuation of collateral
for bank loans and/or obstruct the effective operation of the
national banking system and Federal Reserve System.
(4) National emergencies, which produce widespread unemployment
and the dislocation of trade, transportation, and industry, and
which burden interstate commerce and adversely affect the general
welfare, are precipitated, intensified, and prolonged by
manipulation and sudden and unreasonable fluctuations of security
prices and by excessive speculation on such exchanges and
markets, and to meet such emergencies the Federal Government is
put to such great expense as to burden the national credit.