Summary: H.R.10784 — 93rd Congress (1973-1974)All Information (Except Text)

There is one summary for H.R.10784. Bill summaries are authored by CRS.

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Introduced in House (10/04/1973)

Securities Exchange Act Amendments - Title I: Selection and Administration of the Securities and Exchange Commission - Provides that any commissioner of the Securities and Exchange Commission may be removed by the President for neglect of duty or malfeasance in office, but for no other cause.

Sets forth procedures for the appointment of a Commission chairman.

Authorizes the Commission to appoint and fix the compensation of officers and experts as may be necessary to carry out its functions under this Act.

Requires the Commission to submit any budget request to the Congress concurrently with transmittal to the Office of Management and Budget.

Provide that when the Commission transmits any legislative recommendations, testimony, or comment on legislation to the Executive, it shall concurrently transmit a copy to the Congress.

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.

Makes registered national securities exchanges and associations subject to identical regulatory provisions.

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

Specifies the eligibility criteria for a netuional securities exchange, including, that the rules of the exchange include provisions for discipling members, for fair representation of its members, for fair orderly procedures with respect to discipling of its members, and for matters which are necessary to permit the exchange to comply with the provisions of this Act.

Prohibits registered national securities exchanges from imposing any schedule of prices or fixing rates of commissions, allowances, discounts, or other charges subject to a statutory timetable for the elimination of the current fixed minimum commission rate system.

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

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

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 sixty days after publication by the SEC unless the SEC disapproves it.

Allows registered national securities exchanges, with the concurrence of the SEC, to share the cost, functions and responsibility of the conduct of examinations and inspections of members, and to furnish copies of any reports of inspections or examinations to each other.

Establishes new procedures to be followed by the Commission in compelling exchanges and registered associations to change their rules, and in regulating off-floor trading by exchange members.

Provides for a ban on transactions with "affiliated persons," as defined by this Act, to be effective on February 1, 1974.

Gives the SEC the authority to suspend or expel exchange members who have violated exchange rules.

Requires a national securities association to furnish copies of any reports of its members to any other national securities exchange of which such member is a member.

Prohibits national securities exchanges and national securities associations from preventing their members from executing transactions for customers in other markets whenever those markets offer a better price to such customers.

Requires the SEC to adopt rules to assure that customers are getting best price from their brokers.

Prohibits national securities exchanges and national securities associations from preventing its members from participating in any registered clearing agency or securities depository.

Gives the SEC authority to investigate and bring injunctive actions for violations of National Association of Securities Distributors rules and exchange rules, and to bring injunctive actions to compel a registered national securities exchange or association to enforce compliance with the rules of such exchange or association.

Title III: Financial Responsibility; Regulation of Brokers,-Dealers and Members; 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 Commission 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 Commission, or an exchange or the NASD as designated by the Commission, 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 Commission, 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.

Requires the Commission and the Board of Governors of the Federal Reserve System to make such rules and regulations as may be necessary for the execution of the functions vested in them by this Act.

Authorizes the Commission 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 Commission 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: Security Processing - Authorizes the Commission 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 Commission shall not affect the authority of the Board of Governors of the Federal Reserve System to regulate securities credit.

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

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

Authorizes the Commission to establish terms and conditions under which a clearing agency, securities depository or transfer agent may withdraw from registration.

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

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 Commission disciplinary powers with respect to clearing agencies, securities depositories and transfer agents.

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 Commission 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 Commission 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.

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

Directs the Securities and Exchange 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.

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 the SEC to order the registration of an investment adviser effective. (Amends 15 U.S.C. 78d-78w)