WAIS Document RetrievalFrom the U.S. Code Online via GPO Access
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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 15USC78m]

                      TITLE 15--COMMERCE AND TRADE
 
                    CHAPTER 2B--SECURITIES EXCHANGES
 
Sec. 78m. Periodical and other reports

(a) Reports by issuer of security; contents

    Every issuer of a security registered pursuant to section 78l of 
this title shall file with the Commission, in accordance with such rules 
and regulations as the Commission may prescribe as necessary or 
appropriate for the proper protection of investors and to insure fair 
dealing in the security--
        (1) such information and documents (and such copies thereof) as 
    the Commission shall require to keep reasonably current the 
    information and documents required to be included in or filed with 
    an application or registration statement filed pursuant to section 
    78l of this title, except that the Commission may not require the 
    filing of any material contract wholly executed before July 1, 1962.
        (2) such annual reports (and such copies thereof), certified if 
    required by the rules and regulations of the Commission by 
    independent public accountants, and such quarterly reports (and such 
    copies thereof), as the Commission may prescribe.

Every issuer of a security registered on a national securities exchange 
shall also file a duplicate original of such information, documents, and 
reports with the exchange.

(b) Form of report; books, records, and internal accounting; directives

    (1) The Commission may prescribe, in regard to reports made pursuant 
to this chapter, the form or forms in which the required information 
shall be set forth, the items or details to be shown in the balance 
sheet and the earning statement, and the methods to be followed in the 
preparation of reports, in the appraisal or valuation of assets and 
liabilities, in the determination of depreciation and depletion, in the 
differentiation of recurring and nonrecurring income, in the 
differentiation of investment and operating income, and in the 
preparation, where the Commission deems it necessary or desirable, of 
separate and/or consolidated balance sheets or income accounts of any 
person directly or indirectly controlling or controlled by the issuer, 
or any person under direct or indirect common control with the issuer; 
but in the case of the reports of any person whose methods of accounting 
are prescribed under the provisions of any law of the United States, or 
any rule or regulation thereunder, the rules and regulations of the 
Commission with respect to reports shall not be inconsistent with the 
requirements imposed by such law or rule or regulation in respect of the 
same subject matter (except that such rules and regulations of the 
Commission may be inconsistent with such requirements to the extent that 
the Commission determines that the public interest or the protection of 
investors so requires).
    (2) Every issuer which has a class of securities registered pursuant 
to section 78l of this title and every issuer which is required to file 
reports pursuant to section 78o(d) of this title shall--
        (A) make and keep books, records, and accounts, which, in 
    reasonable detail, accurately and fairly reflect the transactions 
    and dispositions of the assets of the issuer;
        (B) devise and maintain a system of internal accounting controls 
    sufficient to provide reasonable assurances that--
            (i) transactions are executed in accordance with 
        management's general or specific authorization;
            (ii) transactions are recorded as necessary (I) to permit 
        preparation of financial statements in conformity with generally 
        accepted accounting principles or any other criteria applicable 
        to such statements, and (II) to maintain accountability for 
        assets;
            (iii) access to assets is permitted only in accordance with 
        management's general or specific authorization; and
            (iv) the recorded accountability for assets is compared with 
        the existing assets at reasonable intervals and appropriate 
        action is taken with respect to any differences; and

        (C) notwithstanding any other provision of law, pay the 
    allocable share of such issuer of a reasonable annual accounting 
    support fee or fees, determined in accordance with section 7219 of 
    this title.

    (3)(A) With respect to matters concerning the national security of 
the United States, no duty or liability under paragraph (2) of this 
subsection shall be imposed upon any person acting in cooperation with 
the head of any Federal department or agency responsible for such 
matters if such act in cooperation with such head of a department or 
agency was done upon the specific, written directive of the head of such 
department or agency pursuant to Presidential authority to issue such 
directives. Each directive issued under this paragraph shall set forth 
the specific facts and circumstances with respect to which the 
provisions of this paragraph are to be invoked. Each such directive 
shall, unless renewed in writing, expire one year after the date of 
issuance.
    (B) Each head of a Federal department or agency of the United States 
who issues a directive pursuant to this paragraph shall maintain a 
complete file of all such directives and shall, on October 1 of each 
year, transmit a summary of matters covered by such directives in force 
at any time during the previous year to the Permanent Select Committee 
on Intelligence of the House of Representatives and the Select Committee 
on Intelligence of the Senate.
    (4) No criminal liability shall be imposed for failing to comply 
with the requirements of paragraph (2) of this subsection except as 
provided in paragraph (5) of this subsection.
    (5) No person shall knowingly circumvent or knowingly fail to 
implement a system of internal accounting controls or knowingly falsify 
any book, record, or account described in paragraph (2).
    (6) Where an issuer which has a class of securities registered 
pursuant to section 78l of this title or an issuer which is required to 
file reports pursuant to section 78o(d) of this title holds 50 per 
centum or less of the voting power with respect to a domestic or foreign 
firm, the provisions of paragraph (2) require only that the issuer 
proceed in good faith to use its influence, to the extent reasonable 
under the issuer's circumstances, to cause such domestic or foreign firm 
to devise and maintain a system of internal accounting controls 
consistent with paragraph (2). Such circumstances include the relative 
degree of the issuer's ownership of the domestic or foreign firm and the 
laws and practices governing the business operations of the country in 
which such firm is located. An issuer which demonstrates good faith 
efforts to use such influence shall be conclusively presumed to have 
complied with the requirements of paragraph (2).
    (7) For the purpose of paragraph (2) of this subsection, the terms 
``reasonable assurances'' and ``reasonable detail'' mean such level of 
detail and degree of assurance as would satisfy prudent officials in the 
conduct of their own affairs.

(c) Alternative reports

    If in the judgment of the Commission any report required under 
subsection (a) of this section is inapplicable to any specified class or 
classes of issuers, the Commission shall require in lieu thereof the 
submission of such reports of comparable character as it may deem 
applicable to such class or classes of issuers.

(d) Reports by persons acquiring more than five per centum of certain 
        classes of securities

    (1) Any person who, after acquiring directly or indirectly the 
beneficial ownership of any equity security of a class which is 
registered pursuant to section 78l of this title, or any equity security 
of an insurance company which would have been required to be so 
registered except for the exemption contained in section 78l(g)(2)(G) of 
this title, or any equity security issued by a closed-end investment 
company registered under the Investment Company Act of 1940 [15 U.S.C. 
80a-1 et seq.] or any equity security issued by a Native Corporation 
pursuant to section 1629c(d)(6) of title 43, is directly or indirectly 
the beneficial owner of more than 5 per centum of such class shall, 
within ten days after such acquisition, send to the issuer of the 
security at its principal executive office, by registered or certified 
mail, send to each exchange where the security is traded, and file with 
the Commission, a statement containing such of the following 
information, and such additional information, as the Commission may by 
rules and regulations, prescribe as necessary or appropriate in the 
public interest or for the protection of investors--
        (A) the background, and identity, residence, and citizenship of, 
    and the nature of such beneficial ownership by, such person and all 
    other persons by whom or on whose behalf the purchases have been or 
    are to be effected;
        (B) the source and amount of the funds or other consideration 
    used or to be used in making the purchases, and if any part of the 
    purchase price is represented or is to be represented by funds or 
    other consideration borrowed or otherwise obtained for the purpose 
    of acquiring, holding, or trading such security, a description of 
    the transaction and the names of the parties thereto, except that 
    where a source of funds is a loan made in the ordinary course of 
    business by a bank, as defined in section 78c(a)(6) of this title, 
    if the person filing such statement so requests, the name of the 
    bank shall not be made available to the public;
        (C) if the purpose of the purchases or prospective purchases is 
    to acquire control of the business of the issuer of the securities, 
    any plans or proposals which such persons may have to liquidate such 
    issuer, to sell its assets to or merge it with any other persons, or 
    to make any other major change in its business or corporate 
    structure;
        (D) the number of shares of such security which are beneficially 
    owned, and the number of shares concerning which there is a right to 
    acquire, directly or indirectly, by (i) such person, and (ii) by 
    each associate of such person, giving the background, identity, 
    residence, and citizenship of each such associate; and
        (E) information as to any contracts, arrangements, or 
    understandings with any person with respect to any securities of the 
    issuer, including but not limited to transfer of any of the 
    securities, joint ventures, loan or option arrangements, puts or 
    calls, guaranties of loans, guaranties against loss or guaranties of 
    profits, division of losses or profits, or the giving or withholding 
    of proxies, naming the persons with whom such contracts, 
    arrangements, or understandings have been entered into, and giving 
    the details thereof.

    (2) If any material change occurs in the facts set forth in the 
statements to the issuer and the exchange, and in the statement filed 
with the Commission, an amendment shall be transmitted to the issuer and 
the exchange and shall be filed with the Commission, in accordance with 
such rules and regulations as the Commission may prescribe as necessary 
or appropriate in the public interest or for the protection of 
investors.
    (3) When two or more persons act as a partnership, limited 
partnership, syndicate, or other group for the purpose of acquiring, 
holding, or disposing of securities of an issuer, such syndicate or 
group shall be deemed a ``person'' for the purposes of this subsection.
    (4) In determining, for purposes of this subsection, any percentage 
of a class of any security, such class shall be deemed to consist of the 
amount of the outstanding securities of such class, exclusive of any 
securities of such class held by or for the account of the issuer or a 
subsidiary of the issuer.
    (5) The Commission, by rule or regulation or by order, may permit 
any person to file in lieu of the statement required by paragraph (1) of 
this subsection or the rules and regulations thereunder, a notice 
stating the name of such person, the number of shares of any equity 
securities subject to paragraph (1) which are owned by him, the date of 
their acquisition and such other information as the Commission may 
specify, if it appears to the Commission that such securities were 
acquired by such person in the ordinary course of his business and were 
not acquired for the purpose of and do not have the effect of changing 
or influencing the control of the issuer nor in connection with or as a 
participant in any transaction having such purpose or effect.
    (6) The provisions of this subsection shall not apply to--
        (A) any acquisition or offer to acquire securities made or 
    proposed to be made by means of a registration statement under the 
    Securities Act of 1933 [15 U.S.C. 77a et seq.];
        (B) any acquisition of the beneficial ownership of a security 
    which, together with all other acquisitions by the same person of 
    securities of the same class during the preceding twelve months, 
    does not exceed 2 per centum of that class;
        (C) any acquisition of an equity security by the issuer of such 
    security;
        (D) any acquisition or proposed acquisition of a security which 
    the Commission, by rules or regulations or by order, shall exempt 
    from the provisions of this subsection as not entered into for the 
    purpose of, and not having the effect of, changing or influencing 
    the control of the issuer or otherwise as not comprehended within 
    the purposes of this subsection.

(e) Purchase of securities by issuer

    (1) It shall be unlawful for an issuer which has a class of equity 
securities registered pursuant to section 78l of this title, or which is 
a closed-end investment company registered under the Investment Company 
Act of 1940 [15 U.S.C. 80a-1 et seq.], to purchase any equity security 
issued by it if such purchase is in contravention of such rules and 
regulations as the Commission, in the public interest or for the 
protection of investors, may adopt (A) to define acts and practices 
which are fraudulent, deceptive, or manipulative, and (B) to prescribe 
means reasonably designed to prevent such acts and practices. Such rules 
and regulations may require such issuer to provide holders of equity 
securities of such class with such information relating to the reasons 
for such purchase, the source of funds, the number of shares to be 
purchased, the price to be paid for such securities, the method of 
purchase, and such additional information, as the Commission deems 
necessary or appropriate in the public interest or for the protection of 
investors, or which the Commission deems to be material to a 
determination whether such security should be sold.
    (2) For the purpose of this subsection, a purchase by or for the 
issuer or any person controlling, controlled by, or under common control 
with the issuer, or a purchase subject to control of the issuer or any 
such person, shall be deemed to be a purchase by the issuer. The 
Commission shall have power to make rules and regulations implementing 
this paragraph in the public interest and for the protection of 
investors, including exemptive rules and regulations covering situations 
in which the Commission deems it unnecessary or inappropriate that a 
purchase of the type described in this paragraph shall be deemed to be a 
purchase by the issuer for purposes of some or all of the provisions of 
paragraph (1) of this subsection.
    (3) At the time of filing such statement as the Commission may 
require by rule pursuant to paragraph (1) of this subsection, the person 
making the filing shall pay to the Commission a fee at a rate that, 
subject to paragraphs (5) and (6), is equal to $92 per $1,000,000 of the 
value of securities proposed to be purchased. The fee shall be reduced 
with respect to securities in an amount equal to any fee paid with 
respect to any securities issued in connection with the proposed 
transaction under section 6(b) of the Securities Act of 1933 [15 U.S.C. 
77f(b)], or the fee paid under that section shall be reduced in an 
amount equal to the fee paid to the Commission in connection with such 
transaction under this paragraph.
    (4) Offsetting collections.--Fees collected pursuant to this 
subsection for any fiscal year shall be deposited and credited as 
offsetting collections to the account providing appropriations to the 
Commission, and, except as provided in paragraph (9), shall not be 
collected for any fiscal year except to the extent provided in advance 
in appropriation Acts. No fees collected pursuant to this subsection for 
fiscal year 2002 or any succeeding fiscal year shall be deposited and 
credited as general revenue of the Treasury.
    (5) Annual adjustment.--For each of the fiscal years 2003 through 
2011, the Commission shall by order adjust the rate required by 
paragraph (3) for such fiscal year to a rate that is equal to the rate 
(expressed in dollars per million) that is applicable under section 6(b) 
of the Securities Act of 1933 [15 U.S.C. 77f(b)] for such fiscal year.
    (6) Final rate adjustment.--For fiscal year 2012 and all of the 
succeeding fiscal years, the Commission shall by order adjust the rate 
required by paragraph (3) for all of such fiscal years to a rate that is 
equal to the rate (expressed in dollars per million) that is applicable 
under section 6(b) of the Securities Act of 1933 [15 U.S.C. 77f(b)] for 
all of such fiscal years.
    (7) Pro rata application.--The rates per $1,000,000 required by this 
subsection shall be applied pro rata to amounts and balances of less 
than $1,000,000.
    (8) Review and effective date.--In exercising its authority under 
this subsection, the Commission shall not be required to comply with the 
provisions of section 553 of title 5. An adjusted rate prescribed under 
paragraph (5) or (6) and published under paragraph (10) shall not be 
subject to judicial review. Subject to paragraphs (4) and (9)--
        (A) an adjusted rate prescribed under paragraph (5) shall take 
    effect on the later of--
            (i) the first day of the fiscal year to which such rate 
        applies; or
            (ii) five days after the date on which a regular 
        appropriation to the Commission for such fiscal year is enacted; 
        and

        (B) an adjusted rate prescribed under paragraph (6) shall take 
    effect on the later of--
            (i) the first day of fiscal year 2012; or
            (ii) five days after the date on which a regular 
        appropriation to the Commission for fiscal year 2012 is enacted.

    (9) Lapse of appropriation.--If on the first day of a fiscal year a 
regular appropriation to the Commission has not been enacted, the 
Commission shall continue to collect fees (as offsetting collections) 
under this subsection at the rate in effect during the preceding fiscal 
year, until 5 days after the date such a regular appropriation is 
enacted.
    (10) Publication.--The rate applicable under this subsection for 
each fiscal year is published pursuant to section 6(b)(10) of the 
Securities Act of 1933 [15 U.S.C. 77f(b)(10)].

(f) Reports by institutional investment managers

    (1) Every institutional investment manager which uses the mails, or 
any means or instrumentality of interstate commerce in the course of its 
business as an institutional investment manager and which exercises 
investment discretion with respect to accounts holding equity securities 
of a class described in subsection (d)(1) of this section having an 
aggregate fair market value on the last trading day in any of the 
preceding twelve months of at least $100,000,000 or such lesser amount 
(but in no case less than $10,000,000) as the Commission, by rule, may 
determine, shall file reports with the Commission in such form, for such 
periods, and at such times after the end of such periods as the 
Commission, by rule, may prescribe, but in no event shall such reports 
be filed for periods longer than one year or shorter than one quarter. 
Such reports shall include for each such equity security held on the 
last day of the reporting period by accounts (in aggregate or by type as 
the Commission, by rule, may prescribe) with respect to which the 
institutional investment manager exercises investment discretion (other 
than securities held in amounts which the Commission, by rule, 
determines to be insignificant for purposes of this subsection), the 
name of the issuer and the title, class, CUSIP number, number of shares 
or principal amount, and aggregate fair market value of each such 
security. Such reports may also include for accounts (in aggregate or by 
type) with respect to which the institutional investment manager 
exercises investment discretion such of the following information as the 
Commission, by rule, prescribes--
        (A) the name of the issuer and the title, class, CUSIP number, 
    number of shares or principal amount, and aggregate fair market 
    value or cost or amortized cost of each other security (other than 
    an exempted security) held on the last day of the reporting period 
    by such accounts;
        (B) the aggregate fair market value or cost or amortized cost of 
    exempted securities (in aggregate or by class) held on the last day 
    of the reporting period by such accounts;
        (C) the number of shares of each equity security of a class 
    described in subsection (d)(1) of this section held on the last day 
    of the reporting period by such accounts with respect to which the 
    institutional investment manager possesses sole or shared authority 
    to exercise the voting rights evidenced by such securities;
        (D) the aggregate purchases and aggregate sales during the 
    reporting period of each security (other than an exempted security) 
    effected by or for such accounts; and
        (E) with respect to any transaction or series of transactions 
    having a market value of at least $500,000 or such other amount as 
    the Commission, by rule, may determine, effected during the 
    reporting period by or for such accounts in any equity security of a 
    class described in subsection (d)(1) of this section--
            (i) the name of the issuer and the title, class, and CUSIP 
        number of the security;
            (ii) the number of shares or principal amount of the 
        security involved in the transaction;
            (iii) whether the transaction was a purchase or sale;
            (iv) the per share price or prices at which the transaction 
        was effected;
            (v) the date or dates of the transaction;
            (vi) the date or dates of the settlement of the transaction;
            (vii) the broker or dealer through whom the transaction was 
        effected;
            (viii) the market or markets in which the transaction was 
        effected; and
            (ix) such other related information as the Commission, by 
        rule, may prescribe.

    (2) The Commission, by rule, or order, may exempt, conditionally or 
unconditionally, any institutional investment manager or security or any 
class of institutional investment managers or securities from any or all 
of the provisions of this subsection or the rules thereunder.
    (3) The Commission shall make available to the public for a 
reasonable fee a list of all equity securities of a class described in 
subsection (d)(1) of this section, updated no less frequently than 
reports are required to be filed pursuant to paragraph (1) of this 
subsection. The Commission shall tabulate the information contained in 
any report filed pursuant to this subsection in a manner which will, in 
the view of the Commission, maximize the usefulness of the information 
to other Federal and State authorities and the public. Promptly after 
the filing of any such report, the Commission shall make the information 
contained therein conveniently available to the public for a reasonable 
fee in such form as the Commission, by rule, may prescribe, except that 
the Commission, as it determines to be necessary or appropriate in the 
public interest or for the protection of investors, may delay or prevent 
public disclosure of any such information in accordance with section 552 
of title 5. Notwithstanding the preceding sentence, any such information 
identifying the securities held by the account of a natural person or an 
estate or trust (other than a business trust or investment company) 
shall not be disclosed to the public.
    (4) In exercising its authority under this subsection, the 
Commission shall determine (and so state) that its action is necessary 
or appropriate in the public interest and for the protection of 
investors or to maintain fair and orderly markets or, in granting an 
exemption, that its action is consistent with the protection of 
investors and the purposes of this subsection. In exercising such 
authority the Commission shall take such steps as are within its power, 
including consulting with the Comptroller General of the United States, 
the Director of the Office of Management and Budget, the appropriate 
regulatory agencies, Federal and State authorities which, directly or 
indirectly, require reports from institutional investment managers of 
information substantially similar to that called for by this subsection, 
national securities exchanges, and registered securities associations, 
(A) to achieve uniform, centralized reporting of information concerning 
the securities holdings of and transactions by or for accounts with 
respect to which institutional investment managers exercise investment 
discretion, and (B) consistently with the objective set forth in the 
preceding subparagraph, to avoid unnecessarily duplicative reporting by, 
and minimize the compliance burden on, institutional investment 
managers. Federal authorities which, directly or indirectly, require 
reports from institutional investment managers of information 
substantially similar to that called for by this subsection shall 
cooperate with the Commission in the performance of its responsibilities 
under the preceding sentence. An institutional investment manager which 
is a bank, the deposits of which are insured in accordance with the 
Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.], shall file with 
the appropriate regulatory agency a copy of every report filed with the 
Commission pursuant to this subsection.
    (5)(A) For purposes of this subsection the term ``institutional 
investment manager'' includes any person, other than a natural person, 
investing in or buying and selling securities for its own account, and 
any person exercising investment discretion with respect to the account 
of any other person.
    (B) The Commission shall adopt such rules as it deems necessary or 
appropriate to prevent duplicative reporting pursuant to this subsection 
by two or more institutional investment managers exercising investment 
discretion with respect to the same amount.\1\
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``account.''
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(g) Statement of equity security ownership

    (1) Any person who is directly or indirectly the beneficial owner of 
more than 5 per centum of any security of a class described in 
subsection (d)(1) of this section shall send to the issuer of the 
security and shall file with the Commission a statement setting forth, 
in such form and at such time as the Commission may, by rule, 
prescribe--
        (A) such person's identity, residence, and citizenship; and
        (B) the number and description of the shares in which such 
    person has an interest and the nature of such interest.

    (2) If any material change occurs in the facts set forth in the 
statement sent to the issuer and filed with the Commission, an amendment 
shall be transmitted to the issuer and shall be filed with the 
Commission, in accordance with such rules and regulations as the 
Commission may prescribe as necessary or appropriate in the public 
interest or for the protection of investors.
    (3) When two or more persons act as a partnership, limited 
partnership, syndicate, or other group for the purpose of acquiring, 
holding, or disposing of securities of an issuer, such syndicate or 
group shall be deemed a ``person'' for the purposes of this subsection.
    (4) In determining, for purposes of this subsection, any percentage 
of a class of any security, such class shall be deemed to consist of the 
amount of the outstanding securities of such class, exclusive of any 
securities of such class held by or for the account of the issuer or a 
subsidiary of the issuer.
    (5) In exercising its authority under this subsection, the 
Commission shall take such steps as it deems necessary or appropriate in 
the public interest or for the protection of investors (A) to achieve 
centralized reporting of information regarding ownership, (B) to avoid 
unnecessarily duplicative reporting by and minimize the compliance 
burden on persons required to report, and (C) to tabulate and promptly 
make available the information contained in any report filed pursuant to 
this subsection in a manner which will, in the view of the Commission, 
maximize the usefulness of the information to other Federal and State 
agencies and the public.
    (6) The Commission may, by rule or order, exempt, in whole or in 
part, any person or class of persons from any or all of the reporting 
requirements of this subsection as it deems necessary or appropriate in 
the public interest or for the protection of investors.

(h) Large trader reporting

          (1) Identification requirements for large traders

        For the purpose of monitoring the impact on the securities 
    markets of securities transactions involving a substantial volume or 
    a large fair market value or exercise value and for the purpose of 
    otherwise assisting the Commission in the enforcement of this 
    chapter, each large trader shall--
            (A) provide such information to the Commission as the 
        Commission may by rule or regulation prescribe as necessary or 
        appropriate, identifying such large trader and all accounts in 
        or through which such large trader effects such transactions; 
        and
            (B) identify, in accordance with such rules or regulations 
        as the Commission may prescribe as necessary or appropriate, to 
        any registered broker or dealer by or through whom such large 
        trader directly or indirectly effects securities transactions, 
        such large trader and all accounts directly or indirectly 
        maintained with such broker or dealer by such large trader in or 
        through which such transactions are effected.

    (2) Recordkeeping and reporting requirements for brokers and 
                                   dealers

        Every registered broker or dealer shall make and keep for 
    prescribed periods such records as the Commission by rule or 
    regulation prescribes as necessary or appropriate in the public 
    interest, for the protection of investors, or otherwise in 
    furtherance of the purposes of this chapter, with respect to 
    securities transactions that equal or exceed the reporting activity 
    level effected directly or indirectly by or through such registered 
    broker or dealer of or for any person that such broker or dealer 
    knows is a large trader, or any person that such broker or dealer 
    has reason to know is a large trader on the basis of transactions in 
    securities effected by or through such broker or dealer. Such 
    records shall be available for reporting to the Commission, or any 
    self-regulatory organization that the Commission shall designate to 
    receive such reports, on the morning of the day following the day 
    the transactions were effected, and shall be reported to the 
    Commission or a self-regulatory organization designated by the 
    Commission immediately upon request by the Commission or such a 
    self-regulatory organization. Such records and reports shall be in a 
    format and transmitted in a manner prescribed by the Commission 
    (including, but not limited to, machine readable form).

                        (3) Aggregation rules

        The Commission may prescribe rules or regulations governing the 
    manner in which transactions and accounts shall be aggregated for 
    the purpose of this subsection, including aggregation on the basis 
    of common ownership or control.

            (4) Examination of broker and dealer records

        All records required to be made and kept by registered brokers 
    and dealers pursuant to this subsection with respect to transactions 
    effected by large traders are subject at any time, or from time to 
    time, to such reasonable periodic, special, or other examinations by 
    representatives of the Commission as the Commission deems necessary 
    or appropriate in the public interest, for the protection of 
    investors, or otherwise in furtherance of the purposes of this 
    chapter.

         (5) Factors to be considered in Commission actions

        In exercising its authority under this subsection, the 
    Commission shall take into account--
            (A) existing reporting systems;
            (B) the costs associated with maintaining information with 
        respect to transactions effected by large traders and reporting 
        such information to the Commission or self-regulatory 
        organizations; and
            (C) the relationship between the United States and 
        international securities markets.

                           (6) Exemptions

        The Commission, by rule, regulation, or order, consistent with 
    the purposes of this chapter, may exempt any person or class of 
    persons or any transaction or class of transactions, either 
    conditionally or upon specified terms and conditions or for stated 
    periods, from the operation of this subsection, and the rules and 
    regulations thereunder.

         (7) Authority of Commission to limit disclosure of 
                                 information

        Notwithstanding any other provision of law, the Commission shall 
    not be compelled to disclose any information required to be kept or 
    reported under this subsection. Nothing in this subsection shall 
    authorize the Commission to withhold information from Congress, or 
    prevent the Commission from complying with a request for information 
    from any other Federal department or agency requesting information 
    for purposes within the scope of its jurisdiction, or complying with 
    an order of a court of the United States in an action brought by the 
    United States or the Commission. For purposes of section 552 of 
    title 5, this subsection shall be considered a statute described in 
    subsection (b)(3)(B) of such section 552.

                           (8) Definitions

        For purposes of this subsection--
            (A) the term ``large trader'' means every person who, for 
        his own account or an account for which he exercises investment 
        discretion, effects transactions for the purchase or sale of any 
        publicly traded security or securities by use of any means or 
        instrumentality of interstate commerce or of the mails, or of 
        any facility of a national securities exchange, directly or 
        indirectly by or through a registered broker or dealer in an 
        aggregate amount equal to or in excess of the identifying 
        activity level;
            (B) the term ``publicly traded security'' means any equity 
        security (including an option on individual equity securities, 
        and an option on a group or index of such securities) listed, or 
        admitted to unlisted trading privileges, on a national 
        securities exchange, or quoted in an automated interdealer 
        quotation system;
            (C) the term ``identifying activity level'' means 
        transactions in publicly traded securities at or above a level 
        of volume, fair market value, or exercise value as shall be 
        fixed from time to time by the Commission by rule or regulation, 
        specifying the time interval during which such transactions 
        shall be aggregated;
            (D) the term ``reporting activity level'' means transactions 
        in publicly traded securities at or above a level of volume, 
        fair market value, or exercise value as shall be fixed from time 
        to time by the Commission by rule, regulation, or order, 
        specifying the time interval during which such transactions 
        shall be aggregated; and
            (E) the term ``person'' has the meaning given in section 
        78c(a)(9) of this title and also includes two or more persons 
        acting as a partnership, limited partnership, syndicate, or 
        other group, but does not include a foreign central bank.

(i) Accuracy of financial reports

    Each financial report that contains financial statements, and that 
is required to be prepared in accordance with (or reconciled to) 
generally accepted accounting principles under this chapter and filed 
with the Commission shall reflect all material correcting adjustments 
that have been identified by a registered public accounting firm in 
accordance with generally accepted accounting principles and the rules 
and regulations of the Commission.

(j) Off-balance sheet transactions

    Not later than 180 days after July 30, 2002, the Commission shall 
issue final rules providing that each annual and quarterly financial 
report required to be filed with the Commission shall disclose all 
material off-balance sheet transactions, arrangements, obligations 
(including contingent obligations), and other relationships of the 
issuer with unconsolidated entities or other persons, that may have a 
material current or future effect on financial condition, changes in 
financial condition, results of operations, liquidity, capital 
expenditures, capital resources, or significant components of revenues 
or expenses.

(k) Prohibition on personal loans to executives

                           (1) In general

        It shall be unlawful for any issuer (as defined in section 7201 
    of this title), directly or indirectly, including through any 
    subsidiary, to extend or maintain credit, to arrange for the 
    extension of credit, or to renew an extension of credit, in the form 
    of a personal loan to or for any director or executive officer (or 
    equivalent thereof) of that issuer. An extension of credit 
    maintained by the issuer on July 30, 2002, shall not be subject to 
    the provisions of this subsection, provided that there is no 
    material modification to any term of any such extension of credit or 
    any renewal of any such extension of credit on or after July 30, 
    2002.

                           (2) Limitation

        Paragraph (1) does not preclude any home improvement and 
    manufactured home loans (as that term is defined in section 1464 of 
    title 12), consumer credit (as defined in section 1602 of this 
    title), or any extension of credit under an open end credit plan (as 
    defined in section 1602 of this title), or a charge card (as defined 
    in section 1637(c)(4)(e) of this title), or any extension of credit 
    by a broker or dealer registered under section 78o of this title to 
    an employee of that broker or dealer to buy, trade, or carry 
    securities, that is permitted under rules or regulations of the 
    Board of Governors of the Federal Reserve System pursuant to section 
    78g of this title (other than an extension of credit that would be 
    used to purchase the stock of that issuer), that is--
            (A) made or provided in the ordinary course of the consumer 
        credit business of such issuer;
            (B) of a type that is generally made available by such 
        issuer to the public; and
            (C) made by such issuer on market terms, or terms that are 
        no more favorable than those offered by the issuer to the 
        general public for such extensions of credit.

             (3) Rule of construction for certain loans

        Paragraph (1) does not apply to any loan made or maintained by 
    an insured depository institution (as defined in section 3 of the 
    Federal Deposit Insurance Act (12 U.S.C. 1813)), if the loan is 
    subject to the insider lending restrictions of section 375b of title 
    12.

(l) Real time issuer disclosures

    Each issuer reporting under subsec. (a) of this section or section 
78o(d) of this title shall disclose to the public on a rapid and current 
basis such additional information concerning material changes in the 
financial condition or operations of the issuer, in plain English, which 
may include trend and qualitative information and graphic presentations, 
as the Commission determines, by rule, is necessary or useful for the 
protection of investors and in the public interest.

(June 6, 1934, ch. 404, title I, Sec. 13, 48 Stat. 894; Pub. L. 88-467, 
Sec. 4, Aug. 20, 1964, 78 Stat. 569; Pub. L. 90-439, Sec. 2, July 29, 
1968, 82 Stat. 454; Pub. L. 91-567, Secs. 1, 2, Dec. 22, 1970, 84 Stat. 
1497; Pub. L. 94-29, Sec. 10, June 4, 1975, 89 Stat. 119; Pub. L. 94-
210, title III, Sec. 308(b), Feb. 5, 1976, 90 Stat. 57; Pub. L. 95-213, 
title I, Sec. 102, title II, Secs. 202, 203, Dec. 19, 1977, 91 Stat. 
1494, 1498, 1499; Pub. L. 98-38, Sec. 2(a), June 6, 1983, 97 Stat. 205; 
Pub. L. 100-181, title III, Secs. 315, 316, Dec. 4, 1987, 101 Stat. 
1256; Pub. L. 100-241, Sec. 12(d), Feb. 3, 1988, 101 Stat. 1810; Pub. L. 
100-418, title V, Sec. 5002, Aug. 23, 1988, 102 Stat. 1415; Pub. L. 101-
432, Sec. 3, Oct. 16, 1990, 104 Stat. 964; Pub. L. 107-123, Sec. 5, Jan. 
16, 2002, 115 Stat. 2395; Pub. L. 107-204, title I, Sec. 109(h), title 
IV, Secs. 401(a), 402(a), 409, July 30, 2002, 116 Stat. 771, 785, 787, 
791.)

                       References in Text

    This chapter, referred to in subsecs. (b)(1), (h)(1), (2), (4), (6), 
and (i), was in the original ``this title''. See References in Text note 
set out under section 78a of this title.
    The Investment Company Act of 1940, referred to in subsecs. (d)(1) 
and (e)(1), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, as 
amended, which is classified generally to subchapter I (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.
    The Securities Act of 1933, referred to in subsec. (d)(6)(A), is act 
May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is 
classified generally to subchapter I (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 Federal Deposit Insurance Act, referred to in subsec. (f)(4), is 
act Sept. 21, 1950, ch. 967, Sec. 2, 64 Stat. 873, as amended, which is 
classified generally to chapter 16 (Sec. 1811 et seq.) of Title 12, 
Banks and Banking. For complete classification of this Act to the Code, 
see Short Title note set out under section 1811 of Title 12 and Tables.
    Section 7201 of this title, referred to in subsec. (k)(1), was in 
the original ``section 2 of the Sarbanes-Oxley Act of 2002'', Pub. L. 
107-204, which enacted section 7201 of this title and amended section 
78c of this title.

                               Amendments

    2002--Subsec. (b)(2)(C). Pub. L. 107-204, Sec. 109(h), added subpar. 
(C).
    Subsec. (e)(3). Pub. L. 107-123, Sec. 5(1), substituted ``a fee at a 
rate that, subject to paragraphs (5) and (6), is equal to $92 per 
$1,000,000 of the value of securities proposed to be purchased'' for ``a 
fee of \1/50\ of 1 per centum of the value of securities proposed to be 
purchased''.
    Subsec. (e)(4) to (10). Pub. L. 107-123, Sec. 5(2), added pars. (4) 
to (10).
    Subsecs. (i), (j). Pub. L. 107-204, Sec. 401(a), added subsecs. (i) 
and (j).
    Subsec. (k). Pub. L. 107-204, Sec. 402(a), added subsec. (k).
    Subsec. (l). Pub. L. 107-204, Sec. 409, added subsec. (l).
    1990--Subsec. (h). Pub. L. 101-432 added subsec. (h).
    1988--Subsec. (b)(4) to (7). Pub. L. 100-418 added pars. (4) to (7).
    Subsec. (d)(1). Pub. L. 100-241 inserted ``or any equity security 
issued by a Native Corporation pursuant to section 1629c(d)(6) of title 
43''.
    1987--Subsec. (c). Pub. L. 100-181, Sec. 315, struck out ``of'' 
after ``thereof''.
    Subsec. (h). Pub. L. 100-181, Sec. 316, struck out subsec. (h) which 
required Commission to report to Congress within thirty months of Dec. 
19, 1977, with respect to effectiveness of ownership reporting 
requirements contained in this chapter and desirability and feasibility 
of reducing or otherwise modifying the 5 per centum threshold used in 
subsecs. (d)(1) and (g)(1) of this section.
    1983--Subsec. (e)(3). Pub. L. 98-38 added par. (3).
    1977--Subsec. (b). Pub. L. 95-213, Sec. 102, designated existing 
provisions as par. (1) and added pars. (2) and (3).
    Subsec. (d)(1). Pub. L. 95-213, Sec. 202, inserted references to 
residence and citizenship of persons and to nature of beneficial 
ownership of persons in subpar. (A), and inserted references to 
background, identity, residence, and citizenship of associates of 
persons in subpar. (D).
    Subsecs. (g), (h). Pub. L. 95-213, Sec. 203, added subsecs. (g) and 
(h).
    1976--Subsec. (b). Pub. L. 94-210 substituted provisions relating to 
exceptions for inconsistent rules and regulations, for provisions 
relating to reporting requirements for carriers subject to the 
provisions of section 20 of title 49, or other carriers required to make 
reports of the same general character as those required under section 20 
of title 49.
    1975--Subsec. (f). Pub. L. 94-29 added subsec. (f).
    1970--Subsec. (d)(1). Pub. L. 91-567, Sec. 1(a), included equity 
securities of insurance companies which would have been required to be 
registered except for the exemption contained in section 78l(g)(2)(G) of 
this title, and substituted ``5 per centum'' for ``10 per centum''.
    Subsec. (d)(5), (6). Pub. L. 91-567, Sec. 1(b), added par. (5) and 
redesignated former par. (5) as (6).
    Subsec. (e)(2). Pub. L. 91-567, Sec. 2, inserted provisions 
empowering the Commission to make rules and regulations implementing the 
paragraph in the public interest and for the protection of investors.
    1968--Subsecs. (d), (e). Pub. L. 90-439 added subsecs. (d) and (e).
    1964--Subsec. (a). Pub. L. 88-467 substituted provisions which 
require the issuer of a security registered pursuant to section 78l of 
this title to file reports with the Commission rather than with the 
exchange and to furnish the exchange with duplicate originals and 
prohibit the Commission from requiring the filing of any material 
contract wholly executed before July 1, 1962 for former provisions which 
required the issuer of a security registered on a national securities 
exchange to file certain reports with the exchange and to file 
duplicates with the Commission.

                    Effective Date of 2002 Amendment

    Amendment by Pub. L. 107-123 effective Oct. 1, 2001, except that 
authorities provided by subsec. (e)(9) of this section to not apply 
until Oct. 1, 2002, see section 11 of Pub. L. 107-123, set out as a note 
under section 78ee of this title.

                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-210 not applicable to any report by any 
person with respect to a fiscal year of such person which began before 
Feb. 5, 1976, see section 308(d)(2) of Pub. L. 94-210, set out as a note 
under section 80a-3 of this title.

                    Effective Date of 1975 Amendment

    Amendment by Pub. L. 94-29 effective 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 effective Aug. 20, 1964, see section 13 
of Pub. L. 88-467, set out as a note under section 78c 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.

                              Consultation

    Pub. L. 106-102, title II, Sec. 241, Nov. 12, 1999, 113 Stat. 1407, 
provided that:
    ``(a) In General.--The Securities and Exchange Commission shall 
consult and coordinate comments with the appropriate Federal banking 
agency before taking any action or rendering any opinion with respect to 
the manner in which any insured depository institution or depository 
institution holding company reports loan loss reserves in its financial 
statement, including the amount of any such loan loss reserve.
    ``(b) Definitions.--For purposes of subsection (a), the terms 
`insured depository institution', `depository institution holding 
company', and `appropriate Federal banking agency' have the same meaning 
as given in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 
1813].''

                  Section Referred to in Other Sections

    This section is referred to in sections 77f, 77r, 77s, 77z-2, 77nnn, 
78c, 78j-1, 78l, 78n, 78o, 78u-5, 78w, 78hh, 80a-8, 80a-29, 80a-54, 80a-
63, 773, 7201, 7241, 7261, 7262, 7264, 7265, 7266 of this title; title 7 
section 12a; title 11 section 1145; title 12 section 1817; title 16 
section 824c; title 18 section 1350; title 22 section 2197; title 26 
sections 162, 952, 964; title 29 section 1343; title 43 section 1629c.