Notes on 15 U.S.C. § 78o : US Code - Notes

    (June 6, 1934, ch. 404, title I, Sec. 15, 48 Stat. 895; May 27,
    1936, ch. 462, Sec. 3, 49 Stat. 1377; June 25, 1938, ch. 677, Sec.
    2, 52 Stat. 1075; Pub. L. 88-467, Sec. 6, Aug. 20, 1964, 78 Stat.
    570; Pub. L. 91-598, Sec. 11(d), formerly Sec. 7(d), Dec. 30, 1970,
    84 Stat. 1653, renumbered Sec. 11(d), Pub. L. 95-283, Sec. 9, May
    21, 1978, 92 Stat. 260; Pub. L. 94-29, Sec. 11, June 4, 1975, 89
    Stat. 121; Pub. L. 95-213, title II, Sec. 204, Dec. 19, 1977, 91
    Stat. 1500; Pub. L. 98-38, Sec. 3(a), June 6, 1983, 97 Stat. 206;
    Pub. L. 98-376, Secs. 4, 6(b), Aug. 10, 1984, 98 Stat. 1265; Pub.
    L. 99-571, title I, Sec. 102(e), (f), Oct. 28, 1986, 100 Stat.
    3218; Pub. L. 100-181, title III, Sec. 317, Dec. 4, 1987, 101 Stat.
    1256; Pub. L. 100-704, Sec. 3(b)(1), Nov. 19, 1988, 102 Stat. 4679;
    Pub. L. 101-429, title V, Secs. 504(a), 505, Oct. 15, 1990, 104
    Stat. 952, 953; Pub. L. 101-550, title II, Sec. 203(a), (c)(1),
    Nov. 15, 1990, 104 Stat. 2715, 2718; Pub. L. 103-202, title I,
    Secs. 105, 106(b)(2)(B), 109(b)(2), 110, Dec. 17, 1993, 107 Stat.
    2348, 2350, 2353; Pub. L. 104-67, title I, Sec. 103(a), Dec. 22,
    1995, 109 Stat. 756; Pub. L. 104-290, title I, Sec. 103(a), Oct.
    11, 1996, 110 Stat. 3420; Pub. L. 105-353, title III, Sec.
    301(b)(8), Nov. 3, 1998, 112 Stat. 3236; Pub. L. 106-102, title II,
    Sec. 205, Nov. 12, 1999, 113 Stat. 1391; Pub. L. 106-554, Sec.
    1(a)(5) [title II, Secs. 203(a)(1), (b), 206(h), title III, Sec.
    303(e), (f)], Dec. 21, 2000, 114 Stat. 2763, 2763A-421, 2763A-422,
    2763A-432, 2763A-454, 2763A-455; Pub. L. 107-204, title VI, Sec.
    604(a), (c)(1)(B)(ii), July 30, 2002, 116 Stat. 795, 796; Pub. L.
    109-291, Sec. 4(b)(1)(A), Sept. 29, 2006, 120 Stat. 1337; Pub. L.
    111-203, title I, Sec. 173(c), title VII, Secs. 713(a), 762(d)(4),
    766(d), title IX, Secs. 913(g)(1), (h)(1), 919, 921(a), 925(a)(1),
    929L(3), 929X(c), 942(a), 975(g), 985(b)(5)(A), July 21, 2010, 124
    Stat. 1440, 1646, 1761, 1799, 1828, 1829, 1837, 1841, 1850, 1861,
    1870, 1896, 1923, 1933.)


-STATAMEND-
                           AMENDMENT OF SECTION                       
      Unless otherwise provided, amendments by subtitle A (Secs. 711-
    754) and subtitle B (Secs. 761-774) of title VII of Pub. L. 111-
    203 effective on the later of 360 days after July 21, 2010, or, to
    the extent a provision of either subtitle A or B requires a
    rulemaking, not less than 60 days after publication of the final
    rule or regulation implementing such provision of subtitle A or B,
    see 2010 Amendment notes and Effective Date of 2010 Amendment note
    below.


                            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 (Sec.
    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 (Sec. 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 (Sec. 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 (Sec. 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, Sec. 617(a),
    July 21, 2010, 124 Stat. 1616.
      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                            
      2010 - Subsec. (b)(1). Pub. L. 111-203, Sec. 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, Sec. 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, Sec. 975(g)(1), inserted
    "municipal advisor," after "municipal securities dealer" in
    subpars. (B)(ii) and (C).
      Subsec. (b)(4)(C). Pub. L. 111-203, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 929L(3), struck out
    "otherwise than on a national securities exchange of which it is a
    member" after "commercial bills)".
      Pub. L. 111-203, Sec. 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, Sec. 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, Sec. 713(a), added subpar.
    (C).
      Subsec. (d). Pub. L. 111-203, Sec. 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, Sec. 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, Sec. 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, Sec. 929X(c)(1), redesignated
    subsec. (i), relating to rulemaking to extend requirements to new
    hybrid products, as (j).
      Pub. L. 111-203, Sec. 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, Sec. 913(g)(1), added subsec.
    (k) relating to standard of conduct and subsec. (l) relating to
    other matters.
      Pub. L. 111-203, Sec. 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, Sec. 913(h)(1), added subsec. (m).
      Subsec. (n). Pub. L. 111-203, Sec. 919, added subsec. (n).
      Subsec. (o). Pub. L. 111-203, Sec. 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, Sec. 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, Sec. 604(a)(2), added subpar.
    (H).
      Subsec. (b)(6)(A)(i). Pub. L. 107-204, Sec. 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, Sec. 1(a)(5) [title II,
    Sec. 203(a)(1)], added par. (11).
      Subsec. (b)(12). Pub. L. 106-554, Sec. 1(a)(5) [title II, Sec.
    203(b)], added par. (12).
      Subsec. (c)(1). Pub. L. 106-554, Sec. 1(a)(5) [title III, Sec.
    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, Sec. 1(a)(5) [title II, Sec.
    206(h)], designated existing provisions as subpar. (A) and added
    subpar. (B).
      Subsec. (i). Pub. L. 106-554, Sec. 1(a)(5) [title III, Sec.
    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, Sec. 301(b)(8)(A),
    realigned margins.
      Subsec. (h)(2). Pub. L. 105-353, Sec. 301(b)(8)(B), substituted
    "effecting" for "affecting" in introductory provisions.
      Subsec. (h)(3)(A)(i)(II)(bb). Pub. L. 105-353, Sec. 301(b)(8)(C),
    inserted "or" after semicolon at end.
      Subsec. (h)(3)(A)(ii)(I). Pub. L. 105-353, Sec. 301(b)(8)(D),
    substituted "maintained" for "maintains".
      Subsec. (h)(3)(B)(ii). Pub. L. 105-353, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 110, added par. (7).
      1990 - Subsec. (b)(4)(B). Pub. L. 101-550, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 203(a)(5), inserted
    "or a violation of a substantially equivalent foreign statute"
    after "title 18".
      Subsec. (b)(4)(C). Pub. L. 101-550, Sec. 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, Sec. 203(a)(7), added subpar.
    (G).
      Subsec. (b)(6). Pub. L. 101-429, Sec. 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, Sec. 203(c)(1), substituted "(A), (D), (E), or
    (G)" for "(A), (D), or (E)".
      Subsec. (g). Pub. L. 101-429, Sec. 505, added subsec. (g).
      1988 - Subsec. (f). Pub. L. 100-704 added subsec. (f).
      1987 - Subsec. (b)(4)(B)(ii). Pub. L. 100-181, Sec. 317(1),
    substituted "fiduciary, transfer agent, or" for "fiduciary, or
    any".
      Subsec. (b)(4)(C). Pub. L. 100-181, Sec. 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, Sec. 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, Sec. 317(4), substituted "78q-
    1(b)(4)(A)" for "78q-1(b)(4)(B)".
      1986 - Subsec. (b)(4)(A). Pub. L. 99-571, Sec. 102(e)(1),
    inserted "or with any other appropriate regulatory agency".
      Subsec. (b)(4)(B)(ii). Pub. L. 99-571, Sec. 102(e)(2), inserted
    "government securities broker, government securities dealer,".
      Subsec. (b)(4)(C). Pub. L. 99-571, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 6(b)(3), inserted
    "the Commodity Exchange Act,".
      Subsec. (c)(4). Pub. L. 98-376, Sec. 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, Sec. 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, Sec. 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, Sec. 11(1), amended section catchline.
      Subsec. (a). Pub. L. 94-29, Sec. 11(2), required registration
    with the Commission of all persons utilizing an exchange's
    facilities to effect transactions.
      Subsec. (b). Pub. L. 94-29, Sec. 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, Sec. 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, Sec. 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, Sec. 11(3), inserted requirement
    that rules and regulations be promulgated no later than Sept. 1,
    1975, establishing minimum financial responsibility requirements
    for all brokers and dealers.
      Subsec. (c)(5). Pub. L. 94-29, Sec. 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, Sec. 11(5), added par. (6).
      Subsec. (e). Pub. L. 94-29, Sec. 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, Sec. 6(a), designated
    existing provisions as par. (1) and added par. (2).
      Subsec. (b)(1). Pub. L. 88-467, Sec. 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, Sec. 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, Sec. 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, Sec. 6(b), added par. (4).
      Subsec. (b)(5). Pub. L. 88-467, Sec. 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, Sec. 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, Sec. 6(b), added pars.
    (7) to (10).
      Subsec. (c)(4), (5). Pub. L. 88-467, Sec. 6(c), added pars. (4)
    and (5).
      Subsec. (d). Pub. L. 88-467, Sec. 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 June 25, 1938, added pars. (2)
    and (3).
      1936 - Act May 27, 1936, amended section generally.

                     EFFECTIVE DATE OF 2010 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 July 21, 2010, except as otherwise
    provided, see section 4 of Pub. L. 111-203, set out as an Effective
    Date note under section 5301 of Title 12, Banks and Banking.
      Amendment by section 713(a) of Pub. L. 111-203 effective on the
    later of 360 days after July 21, 2010, or, to the extent a
    provision of subtitle A (Secs. 711-754) of title VII of Pub. L. 111-
    203 requires a rulemaking, not less than 60 days after publication
    of the final rule or regulation implementing such provision of
    subtitle A, see section 754 of Pub. L. 111-203, set out as a note
    under section 1a of Title 7, Agriculture.
      Amendment by sections 762(d)(4) and 766(d) of Pub. L. 111-203
    effective on the later of 360 days after July 21, 2010, or, to the
    extent a provision of subtitle B (Secs. 761-774) of title VII of
    Pub. L. 111-203 requires a rulemaking, not less than 60 days after
    publication of the final rule or regulation implementing such
    provision of subtitle B, see section 774 of Pub. L. 111-203, set
    out as a note under section 77b of this title.
      Pub. L. 111-203, title IX, Sec. 975(i), July 21, 2010, 124 Stat.
    1923, provided that: "This section [amending this section and
    sections 78o-3, 78o-4, and 78q of this title], and the amendments
    made by this section, shall take effect on October 1, 2010."

                     EFFECTIVE DATE OF 1999 AMENDMENT                 
      Amendment by Pub. L. 106-102 effective at the end of the 18-month
    period beginning on Nov. 12, 1999, see section 209 of Pub. L. 106-
    102, set out as a note under section 1828 of Title 12, Banks and
    Banking.

                     EFFECTIVE DATE OF 1995 AMENDMENT                 
      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
    Dec. 22, 1995, see section 108 of Pub. L. 104-67, set out as a note
    under section 77l of this title.

                     EFFECTIVE DATE OF 1990 AMENDMENT                 
      Amendment by section 504(a) of Pub. L. 101-429 effective 12
    months after Oct. 15, 1990, with provisions relating to civil
    penalties and accounting and disgorgement, see section 1(c)(2),
    (3)(A) of Pub. L. 101-429, set out in a note under section 77g of
    this title.
      Amendment by section 505 of Pub. L. 101-429 effective 18 months
    after Oct. 15, 1990, with provision to commence rulemaking
    proceedings to implement such amendment not later than 180 days
    after Oct. 15, 1990, and with provisions relating to civil
    penalties and accounting and disgorgement, see section 1(c)(2),
    (3)(B), (C) of Pub. L. 101-429, set out in a note under section 77g
    of this title.

                     EFFECTIVE DATE OF 1988 AMENDMENT                 
      Pub. L. 100-704, Sec. 9, Nov. 19, 1988, 102 Stat. 4684, provided
    that: "The amendments made by this Act [enacting sections 78t-1,
    78u-1, and 80b-4a of this title and amending this section and
    sections 78c, 78u, 78ff, and 78kk of this title], except for
    section 6 [amending sections 78c and 78u of this title], shall not
    apply to any actions occurring before the date of enactment of this
    Act [Nov. 19, 1988]."

                     EFFECTIVE DATE OF 1986 AMENDMENT                 
      Amendment by Pub. L. 99-571 effective 270 days after Oct. 28,
    1986, see section 401 of Pub. L. 99-571, set out as an Effective
    Date note under section 78o-5 of this title.

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment Pub. L. 98-376 effective Aug. 10, 1984, see section 7
    of Pub. L. 98-376, set out as a note under section 78c of this
    title.

                     EFFECTIVE DATE OF 1983 AMENDMENT                 
      Pub. L. 98-38, Sec. 3(b), June 6, 1983, 97 Stat. 207, provided
    that: "The amendments made by subsection (a) [amending this
    section] shall become effective six months after the date of
    enactment of this Act [June 6, 1983]."

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, except for
    amendment of subsec. (a) by Pub. L. 94-29 which is effective 180
    days after June 4, 1975, see section 31(a) of Pub. L. 94-29, set
    out as a note under section 78b of this title.

                     EFFECTIVE DATE OF 1964 AMENDMENT                 
      Amendment by Pub. L. 88-467 of subsec. (a) of this section
    effective July 1, 1964, and of subsecs. (b), (c)(4), (5), and (d)
    of this section effective Aug. 20, 1964, see section 13 of Pub. L.
    88-467, set out as a note under section 78c of this title.

                      CONSTRUCTION OF 1995 AMENDMENT                  
      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.

                      CONSTRUCTION OF 1993 AMENDMENT                  
      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, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.



    STUDY AND RULEMAKING REGARDING OBLIGATIONS OF BROKERS, DEALERS, AND
                            INVESTMENT ADVISERS
      Pub. L. 111-203, title IX, Sec. 913(a)-(f), July 21, 2010, 124
    Stat. 1824-1827, provided that:
      "(a) Definition. - For purposes of this section, the term 'retail
    customer' means a natural person, or the legal representative of
    such natural person, who - 
        "(1) receives personalized investment advice about securities
      from a broker or dealer or investment adviser; and
        "(2) uses such advice primarily for personal, family, or
      household purposes.
      "(b) Study. - The Commission shall conduct a study to evaluate - 
        "(1) the effectiveness of existing legal or regulatory
      standards of care for brokers, dealers, investment advisers,
      persons associated with brokers or dealers, and persons
      associated with investment advisers for providing personalized
      investment advice and recommendations about securities to retail
      customers imposed by the Commission and a national securities
      association, and other Federal and State legal or regulatory
      standards; and
        "(2) whether there are legal or regulatory gaps, shortcomings,
      or overlaps in legal or regulatory standards in the protection of
      retail customers relating to the standards of care for brokers,
      dealers, investment advisers, persons associated with brokers or
      dealers, and persons associated with investment advisers for
      providing personalized investment advice about securities to
      retail customers that should be addressed by rule or statute.
      "(c) Considerations. - In conducting the study required under
    subsection (b), the Commission shall consider - 
        "(1) the effectiveness of existing legal or regulatory
      standards of care for brokers, dealers, investment advisers,
      persons associated with brokers or dealers, and persons
      associated with investment advisers for providing personalized
      investment advice and recommendations about securities to retail
      customers imposed by the Commission and a national securities
      association, and other Federal and State legal or regulatory
      standards;
        "(2) whether there are legal or regulatory gaps, shortcomings,
      or overlaps in legal or regulatory standards in the protection of
      retail customers relating to the standards of care for brokers,
      dealers, investment advisers, persons associated with brokers or
      dealers, and persons associated with investment advisers for
      providing personalized investment advice about securities to
      retail customers that should be addressed by rule or statute;
        "(3) whether retail customers understand that there are
      different standards of care applicable to brokers, dealers,
      investment advisers, persons associated with brokers or dealers,
      and persons associated with investment advisers in the provision
      of personalized investment advice about securities to retail
      customers;
        "(4) whether the existence of different standards of care
      applicable to brokers, dealers, investment advisers, persons
      associated with brokers or dealers, and persons associated with
      investment advisers is a source of confusion for retail customers
      regarding the quality of personalized investment advice that
      retail customers receive;
        "(5) the regulatory, examination, and enforcement resources
      devoted to, and activities of, the Commission, the States, and a
      national securities association to enforce the standards of care
      for brokers, dealers, investment advisers, persons associated
      with brokers or dealers, and persons associated with investment
      advisers when providing personalized investment advice and
      recommendations about securities to retail customers, including -
      
          "(A) the effectiveness of the examinations of brokers,
        dealers, and investment advisers in determining compliance with
        regulations;
          "(B) the frequency of the examinations; and
          "(C) the length of time of the examinations;
        "(6) the substantive differences in the regulation of brokers,
      dealers, and investment advisers, when providing personalized
      investment advice and recommendations about securities to retail
      customers;
        "(7) the specific instances related to the provision of
      personalized investment advice about securities in which - 
          "(A) the regulation and oversight of investment advisers
        provide greater protection to retail customers than the
        regulation and oversight of brokers and dealers; and
          "(B) the regulation and oversight of brokers and dealers
        provide greater protection to retail customers than the
        regulation and oversight of investment advisers;
        "(8) the existing legal or regulatory standards of State
      securities regulators and other regulators intended to protect
      retail customers;
        "(9) the potential impact on retail customers, including the
      potential impact on access of retail customers to the range of
      products and services offered by brokers and dealers, of imposing
      upon brokers, dealers, and persons associated with brokers or
      dealers - 
          "(A) the standard of care applied under the Investment
        Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) for providing
        personalized investment advice about securities to retail
        customers of investment advisers, as interpreted by the
        Commission and the courts; and
          "(B) other requirements of the Investment Advisers Act of
        1940 (15 U.S.C. 80b-1 et seq.);
        "(10) the potential impact of eliminating the broker and dealer
      exclusion from the definition of 'investment adviser' under
      section 202(a)(11)(C) of the Investment Advisers Act of 1940 (15
      U.S.C. 80b-2(a)(11)(C)), in terms of - 
          "(A) the impact and potential benefits and harm to retail
        customers that could result from such a change, including any
        potential impact on access to personalized investment advice
        and recommendations about securities to retail customers or the
        availability of such advice and recommendations;
          "(B) the number of additional entities and individuals that
        would be required to register under, or become subject to, the
        Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.), and
        the additional requirements to which brokers, dealers, and
        persons associated with brokers and dealers would become
        subject, including - 
            "(i) any potential additional associated person licensing,
          registration, and examination requirements; and
            "(ii) the additional costs, if any, to the additional
          entities and individuals; and
          "(C) the impact on Commission and State resources to - 
            "(i) conduct examinations of registered investment advisers
          and the representatives of registered investment advisers,
          including the impact on the examination cycle; and
            "(ii) enforce the standard of care and other applicable
          requirements imposed under the Investment Advisers Act of
          1940 (15 U.S.C. 80b-1 et seq.);
        "(11) the varying level of services provided by brokers,
      dealers, investment advisers, persons associated with brokers or
      dealers, and persons associated with investment advisers to
      retail customers and the varying scope and terms of retail
      customer relationships of brokers, dealers, investment advisers,
      persons associated with brokers or dealers, and persons
      associated with investment advisers with such retail customers;
        "(12) the potential impact upon retail customers that could
      result from potential changes in the regulatory requirements or
      legal standards of care affecting brokers, dealers, investment
      advisers, persons associated with brokers or dealers, and persons
      associated with investment advisers relating to their obligations
      to retail customers regarding the provision of investment advice,
      including any potential impact on - 
          "(A) protection from fraud;
          "(B) access to personalized investment advice, and
        recommendations about securities to retail customers; or
          "(C) the availability of such advice and recommendations;
        "(13) the potential additional costs and expenses to - 
          "(A) retail customers regarding and the potential impact on
        the profitability of their investment decisions; and
          "(B) brokers, dealers, and investment advisers resulting from
        potential changes in the regulatory requirements or legal
        standards affecting brokers, dealers, investment advisers,
        persons associated with brokers or dealers, and persons
        associated with investment advisers relating to their
        obligations, including duty of care, to retail customers; and
        "(14) any other consideration that the Commission considers
      necessary and appropriate in determining whether to conduct a
      rulemaking under subsection (f).
      "(d) Report. - 
        "(1) In general. - Not later than 6 months after the date of
      enactment of this Act [July 21, 2010], the Commission shall
      submit a report on the study required under subsection (b) to - 
          "(A) the Committee on Banking, Housing, and Urban Affairs of
        the Senate; and
          "(B) the Committee on Financial Services of the House of
        Representatives.
        "(2) Content requirements. - The report required under
      paragraph (1) shall describe the findings, conclusions, and
      recommendations of the Commission from the study required under
      subsection (b), including - 
          "(A) a description of the considerations, analysis, and
        public and industry input that the Commission considered, as
        required under subsection (b), to make such findings,
        conclusions, and policy recommendations; and
          "(B) an analysis of whether [sic] any identified legal or
        regulatory gaps, shortcomings, or overlap in legal or
        regulatory standards in the protection of retail customers
        relating to the standards of care for brokers, dealers,
        investment advisers, persons associated with brokers or
        dealers, and persons associated with investment advisers for
        providing personalized investment advice about securities to
        retail customers.
      "(e) Public Comment. - The Commission shall seek and consider
    public input, comments, and data in order to prepare the report
    required under subsection (d).
      "(f) Rulemaking. - The Commission may commence a rulemaking, as
    necessary or appropriate in the public interest and for the
    protection of retail customers (and such other customers as the
    Commission may by rule provide), to address the legal or regulatory
    standards of care for brokers, dealers, investment advisers,
    persons associated with brokers or dealers, and persons associated
    with investment advisers for providing personalized investment
    advice about securities to such retail customers. The Commission
    shall consider the findings[,] conclusions, and recommendations of
    the study required under subsection (b)."
      [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.]

               STUDY AND REPORT ON BROKER-DEALER UNIFORMITY           
      Pub. L. 104-290, title V, Sec. 510(d), Oct. 11, 1996, 110 Stat.
    3451, provided that:
      "(1) Study. - The Commission, after consultation with registered
    securities associations, national securities exchanges, and States,
    shall conduct a study of the impact of disparate State licensing
    requirements on associated persons of registered brokers or dealers
    and methods for States to attain uniform licensing requirements for
    such persons.
      "(2) Report. - Not later than 1 year after the date of enactment
    of this Act [Oct. 11, 1996], the Commission shall submit to the
    Congress a report on the study conducted under paragraph (1). Such
    report shall include recommendations concerning appropriate methods
    described in paragraph (1)(B), including any necessary legislative
    changes to implement such recommendations."

          PENNY STOCK REFORM; CONGRESSIONAL STATEMENT OF FINDINGS      
      Pub. L. 101-429, title V, Sec. 502, Oct. 15, 1990, 104 Stat. 951,
    provided that: "The Congress finds the following:
        "(1) The maintenance of an honest and healthy primary and
      secondary market for securities offerings is essential to
      enhancing long-term capital formation and economic growth and
      providing legitimate investment opportunities for individuals and
      institutions.
        "(2) Protecting investors in new securities is a critical
      component in the maintenance of an honest and healthy market for
      such securities.
        "(3) Protecting issuers of new securities and promoting the
      capital formation process on behalf of small companies are
      fundamental concerns in maintaining a strong economy and viable
      trading markets.
        "(4) Unscrupulous market practices and market participants have
      pervaded the 'penny stock' market with an overwhelming amount of
      fraud and abuse.
        "(5) Although the Securities and Exchange Commission, State
      securities regulators, and securities self-regulators have made
      efforts to curb these abusive and harmful practices, the penny
      stock market still lacks an adequate and sufficient regulatory
      structure, particularly in comparison to the structure for
      overseeing trading in National Market System securities.
        "(6) Investors in the penny stock market suffer from a serious
      lack of adequate information concerning price and volume of penny
      stock transactions, the nature of this market, and the specific
      securities in which they are investing.
        "(7) Current practices do not adequately regulate the role of
      'promoters' and 'consultants' in the penny stock market, and many
      professionals who have been banned from the securities markets
      have ended up in promoter and consultant roles, contributing
      substantially to fraudulent and abusive schemes.
        "(8) The present regulatory environment has permitted the
      ascendancy of the use of particular market practices, such as
      'reverse mergers' with shell corporations and 'blank check'
      offerings, which are used to facilitate manipulation schemes and
      harm investors.
        "(9) In light of the substantial and continuing problems in the
      penny stock markets, additional legislative measures are
      necessary and appropriate."

       REVISION OF SANCTION AUTHORITY WITH RESPECT TO PENNY STOCKS;
                        RECOMMENDATIONS TO CONGRESS
      Pub. L. 101-429, title V, Sec. 504(b), Oct. 15, 1990, 104 Stat.
    953, provided that: "Within 6 months after the date of enactment of
    this Act [Oct. 15, 1990], the Securities and Exchange Commission
    shall submit to each House of the Congress such recommendations as
    the Commission considers appropriate with respect to further
    revision of section 15(b)(6) of the Securities Exchange Act of 1934
    (15 U.S.C. 78o(b)(6)). In preparing such recommendations, the
    Commission shall consider the desirability and effect of expanding
    the applicability of such section to any promoter, finder,
    consultant, agent or other person who engages in activities with a
    broker, dealer, or issuer for purposes of the issuance of or
    trading in, or inducing or attempting to induce the purchase or
    sale of, any security (and not just penny stock)."


    (footnote 1) So in original.

    (footnote 2) So in original. The word "or" probably should not appear.

    (footnote 3) See References in Text note below.

    (footnote 4) So in original. There are two subsecs. designated (j).

    (footnote 5) Another subsec. (k) is set out after the first subsec. (l).

    (footnote 6) Another subsec. (l) is set out after the second subsec.
         (k).

    (footnote 7) Another subsec. (k) is set out after the second subsec.
         (j).

    (footnote 8) Another subsec. (l) is set out after the first subsec. (k).

    (footnote 9) So in original. Probably should be followed by "the".