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207
SECURITIES EXCHANGE ACT OF 1934
Sec. 15C
(5) The Secretary of the Treasury (hereinafter in this section
referred to as the ‘‘Secretary’’), by rule or order, upon the Secretary’s own motion or upon application, may conditionally or unconditionally exempt any government securities broker or government securities dealer, or class of government securities brokers or
government securities dealers, from any provision of subsection (a),
(b), or (d) of this section, other than subsection (d)(3), or the rules
thereunder, if the Secretary finds that such exemption is consistent
with the public interest, the protection of investors, and the purposes of this title.
(b)(1) The Secretary shall propose and adopt rules to effect the
purposes of this title with respect to transactions in government securities effected by government securities brokers and government
securities dealers as follows:
(A) Such rules shall provide safeguards with respect to the
financial responsibility and related practices of government securities brokers and government securities dealers including,
but not limited to, capital adequacy standards, the acceptance
of custody and use of customers’ securities, the carrying and
use of customers’ deposits or credit balances, and the transfer
and control of government securities subject to repurchase
agreements and in similar transactions.
(B) Such rules shall require every government securities
broker and government securities dealer to make reports to
and furnish copies of records to the appropriate regulatory
agency, and to file with the appropriate regulatory agency, annually or more frequently, a balance sheet and income statement certified by an independent public accountant, prepared
on a calendar or fiscal year basis, and such other financial
statements (which shall, as the Secretary specifies, be certified)
and information concerning its financial condition as required
by such rules.
(C) Such rules shall require records to be made and kept
by government securities brokers and government securities
dealers and shall specify the periods for which such records
shall be preserved.
(2) RISK ASSESSMENT FOR HOLDING COMPANY SYSTEMS.—
(A) OBLIGATIONS TO OBTAIN, MAINTAIN, AND REPORT INFORMATION.— Every person who is registered as a government securities broker or government securities dealer under this section shall obtain such information and make and keep such
records as the Secretary by rule prescribes concerning the registered person’s policies, procedures, or systems for monitoring
and controlling financial and operational risks to it resulting
from the activities of any of its associated persons, other than
a natural person. Such records shall describe, in the aggregate,
each of the financial and securities activities conducted by, and
customary sources of capital and funding of, those of its associated persons whose business activities are reasonably likely to
have a material impact on the financial or operational condition of such registered person, including its capital, its liquidity, or its ability to conduct or finance its operations. The Secretary, by rule, may require summary reports of such informa-
Section 15C of the
Securities Exchange
Act of 1934
211
SECURITIES EXCHANGE ACT OF 1934
Sec. 15C
paragraph shall authorize the Secretary or any appropriate
regulatory agency to withhold information from Congress, or
prevent the Secretary or any appropriate regulatory agency
from complying with a request for information from any other
Federal department or agency requesting the 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, United States Code, this paragraph shall be
considered a statute described in subsection (b)(3)(B) of such
section 552.
(3)(A) With respect to any financial institution that has filed
notice as a government securities broker or government securities
dealer or that is required to file notice under subsection (a)(1)(B),
the appropriate regulatory agency for such government securities
broker or government securities dealer may issue such rules and
regulations with respect to transactions in government securities
as may be necessary to prevent fraudulent and manipulative acts
and practices and to promote just and equitable principles of trade.
If the Secretary of the Treasury determines, and notifies the appropriate regulatory agency, that such rule or regulation, if implemented, would, or as applied does (i) adversely affect the liquidity
or efficiency of the market for government securities; or (ii) impose
any burden on competition not necessary or appropriate in furtherance of the purposes of this section, the appropriate regulatory
agency shall, prior to adopting the proposed rule or regulation, find
that such rule or regulation is necessary and appropriate in furtherance of the purposes of this section notwithstanding the Secretary’s determination.
(B) The appropriate regulatory agency shall consult with and
consider the views of the Secretary prior to approving or amending
a rule or regulation under this paragraph, except where the appropriate regulatory agency determines that an emergency exists requiring expeditious and summary action and publishes its reasons
therefor. If the Secretary comments in writing to the appropriate
regulatory agency on a proposed rule or regulation that has been
published for comment, the appropriate regulatory agency shall respond in writing to such written comment before approving the
proposed rule or regulation.
(C) In promulgating rules under this section, the appropriate
regulatory agency shall consider the sufficiency and appropriateness of then existing laws and rules applicable to government securities brokers, government securities dealers, and persons associated with government securities brokers and government securities
dealers.
(4) Rules promulgated and orders issued under this section
shall—
(A) be designed to prevent fraudulent and manipulative
acts and practices and to protect the integrity, liquidity, and
efficiency of the market for government securities, investors,
and the public interest; and
(B) not be designed to permit unfair discrimination between customers, issuers, government securities brokers, or
government securities dealers, or to impose any burden on
Sec. 15C
SECURITIES EXCHANGE ACT OF 1934
212
competition not necessary or appropriate in furtherance of the
purposes of this title.
(5) In promulgating rules and issuing orders under this section, the Secretary—
(A) may appropriately classify government securities brokers and government securities dealers (taking into account
relevant matters, including types of business done, nature of
securities other than government securities purchased or sold,
and character of business organization) and persons associated
with government securities brokers and government securities
dealers;
(B) may determine, to the extent consistent with paragraph (2) of this subsection and with the public interest, the
protection of investors, and the purposes of this title, not to
apply, in whole or in part, certain rules under this section, or
to apply greater, lesser, or different standards, to certain classes of government securities brokers, government securities
dealers, or persons associated with government securities brokers or government securities dealers;
(C) shall consider the sufficiency and appropriateness of
then existing laws and rules applicable to government securities brokers, government securities dealers, and persons associated with government securities brokers and government securities dealers; and
(D) shall consult with and consider the views of the Commission and the Board of Governors of the Federal Reserve
System, except where the Secretary determines that an emergency exists requiring expeditious or summary action and publishes its reasons for such determination.
(6) If the Commission or the Board of Governors of the Federal
Reserve System comments in writing on a proposed rule of the Secretary that has been published for comment, the Secretary shall respond in writing to such written comment before approving the
proposed rule.
(7) No government securities broker or government securities
dealer shall make use of the mails or any means or instrumentality
of interstate commerce to effect any transaction in, or to induce or
attempt to induce the purchase or sale of, any government security
in contravention of any rule under this section.
(c)(1) With respect to any government securities broker or government securities dealer registered or required to register under
subsection (a)(1)(A) of this section—
(A) The Commission, by order, shall censure, place limitations on the activities, functions, or operations of, suspend for
a period not exceeding 12 months, or revoke the registration of
such government securities broker or government securities
dealer, if it finds, on the record after notice and opportunity for
hearing, that such censure, placing of limitations, suspension,
or revocation is in the public interest and that such government securities broker or government securities dealer, or any
person associated with such government securities broker or
government securities dealer (whether prior or subsequent to
becoming so associated), has committed or omitted any act, or
is subject to an order or finding, enumerated in subparagraph
Attachment B
Page 13
(2) the impact of the guarantee provision of such section 3(a)(2) on competition between banks and insurance
companies and between domestic and foreign guarantors;
(3) whether, and under what circumstances, debt securities guaranteed by insurance policies should be exempt from
registration under the Securities Act of 1933; (15 USC 77a)
(4) an analysis of the impact of such an exemption on investor protection and the public interest; and
(5) such other issues as the Commission deems relevant.
(b) CONSULTATION. -- In conducting the study required by subsection (a), the Commission shall consult with
and solicit comment from the Secretary of the Treasury, the Board of Governors of the Federal Reserve System, and
other Federal bank regulatory agencies.
(c) REPORT. -- The Securities and Exchange Commission shall, on or before 6 months after the date of enactment
of this Act, submit a report to the Congress containing -(1) the results of its study under this section;
(2) the actions it proposes to take on the basis of its study; and
(3) recommendations for legislation.
TITLE II -- DEPOSITORY INSTITUTIONS
SEC. 201. DEPOSITORY INSTITUTIONS.
(a) AMENDMENT TO CHAPTER 31 OF TITLE 31, UNITED STATES CODE. -- Section 3121 of title 31,
United States Code, is amended by adding at the end thereof the following:
"(h)(1) The Secretary shall prescribe by regulation standards for the safeguarding and use of obligations issued
under this chapter, and obligations otherwise issued or guaranteed as to principal or interest by the United States.
Such regulations shall apply only to a depository institution that is not a government securities broker or a
government securities dealer and that holds such obligations as fiduciary, custodian, or otherwise for the account of
a customer and not for its own account. Such regulations shall provide for the adequate segregation of obligations so
held, including obligations which are purchased or sold subject to resale or repurchase.
"(2) Violation of a regulation prescribed under paragraph (1) shall constitute adequate basis for the issuance of an
order under section 5239(a) or (b) (12 USC 1818) of the Revised Statutes (12 U.S.C. 93(a) or (b)), section 8(b) or
8(c) (12 USC 1464) of the Federal Deposit Insurance Act, section 5(d)(2) or 5(d)(3) (12 USC 1730) of the Home
Owners' Loan Act of 1933, section 407(e) or 407(f) of the National Housing Act, or section 206(e) or 206(f) of the
Federal Credit Union Act. (12 USC 1786) Such an order may be issued with respect to a depository institution by its
appropriate regulatory agency and with respect to a federally insured credit union by the National Credit Union
Administration Board.
"(3) Nothing in this subsection shall be construed to affect in any way the powers of such agencies under any other
provision of law.
"(4) The Secretary shall, prior to adopting regulations under this subsection, determine with respect to each
appropriate regulatory agency and the National Credit Union Administration Board, whether its rules and standards
adequately meet the purposes of regulations to be promulgated under this subsection, and if the Secretary so
determines, shall exempt any depository institution subject to such rules or standards from the regulations
promulgated under this subsection.
Page 14
"(5) As used in this subsection -"(A) 'depository institution' has the meaning stated in clauses (i) through (vi) of section 19(b)(1)(A) (12 USC 461)
of the Federal Reserve Act and also includes a foreign bank, an agency or branch of a foreign bank, and a
commercial lending company owned or controlled by a foreign bank (as such terms are defined in the International
Banking Act of 1978).
"(B) 'government securities broker' has the meaning prescribed in section 3(a)(43) of the Securities Exchange Act
of 1934. (15 USC 78c)
"(C) 'government securities dealer' has the meaning prescribed in section 3(a)(44) of the Securities Exchange Act
of 1934.
"(D) 'appropriate regulatory agency' has the meaning prescribed in section 3(a)(34)(G) of the Securities Exchange
Act of 1934.".
(b) AMENDMENTS TO CHAPTER 91 OF TITLE 31, UNITED STATES CODE. -- Chapter 91 of title 31, United
States Code, is amended -(1) by adding at the end thereof the following:
"Section 9110. Standards for depository institutions holding securities of a Government-sponsored corporation for
customers. (31 USC 9110)
"(a) The Secretary shall prescribe by regulation standards for the safeguarding and use of obligations that are
government securities described in subparagraph (B) or (C) of section 3(a)(42) of the Securities Exchange Act of
1934. Such regulations shall apply only to a depository institution that is not a government securities broker or a
government securities dealer and that holds such obligations as fiduciary, custodian, or otherwise for the account of
a customer and not for its own account. Such regulations shall provide for the adequate segregation of obligations so
held, including obligations which are purchased or sold subject to resale or repurchase.
"(b) Violation of a regulation prescribed under subsection (a) shall constitute adequate basis for the issuance of an
order under section 5239(a) or (b) of the Revised Statutes (12 U.S.C. 93(a) or (b)), section 8(b) or 8(c) of the Federal
Deposit Insurance Act, section 5( d)(2) (12 USC 1818) or 5(d)(3) of the Home Owners' Loan Act of 1933, section
407(e) or 407(f) (12 USC 1464) of the National Housing Act, or section 206(e) or 206(f) (12 USC 1730) of the
Federal Credit Union Act. (12 USC 1786) Such an order may be issued with respect to a depository institution by its
appropriate regulatory agency and with respect to a federally insured credit union by the National Credit Union
Administration.
"(c) Nothing in this section shall be construed to affect in any way the powers of such agencies under any other
provision of law.
"(d) The Secretary shall, prior to adopting regulations under this section, determine with respect to each appropriate
regulatory agency and the National Credit Union Administration Board, whether its rules and standards adequately
meet the purposes of regulations to be promulgated under this section, and if the Secretary so determines, shall
exempt any depository institution subject to such rules or standards from the regulations promulgated under this
section.
"(e) As used in this subsection -"(1) 'depository institution' has the meaning stated in clauses (i) through (vi) of subparagraph 19(b)(1)(A) of the
Federal Reserve Act (12 USC 461) and also includes a foreign bank, an agency or branch of a foreign bank, and a
commercial lending company owned or controlled by a foreign bank (as such terms are defined in the International
Banking Act of 1978). (12 USC 3101 note)
"(2) 'government securities broker' has the meaning prescribed in section 3(a)(43) of the Securities Exchange Act
Page 15
of 1934.
"(3) 'government securities dealer' has the meaning prescribed in section 3(a)(44) of the Securities Exchange Act of
1934.
"(4) 'appropriate regulatory agency' has the meaning prescribed in section 3(a)(34)(G) of the Securities Exchange
Act of 1934."; and
(2) by adding at the end of the chapter analysis the following:
"9110. Standards for depository institutions holding securities of a Government-sponsored corporation for
customers.".
TITLE III -- TRANSITIONAL AND SAVINGS PROVISIONS
SEC. 301. TRANSITIONAL AND SAVINGS PROVISIONS.
(a) EFFECT ON PENDING ADMINISTRATIVE PROCEEDINGS. -- The provisions of this Act (15 USC 78o-5
note) shall not affect any proceedings pending on the effective date of this Act.
(b) EFFECT ON PENDING JUDICIAL PROCEEDINGS. -- The provisions of this Act shall not affect suits
commenced prior to the effective date of this Act, and in all such suits, proceedings shall be and, appeals taken, and
judgments rendered in the same manner and effect as if this Act had not been enacted.
(c) DISCRETION OF THE FEDERAL RESERVE BANK OF NEW YORK. -- Nothing in this Act shall be
construed to limit or impair the discretion or authority of the Federal Reserve Bank of New York to require reports
or establish terms and conditions in connection with the Bank's relationship with any government securities broker
or government securities dealer, including a primary dealer.
(d) JURISDICTION OF THE COMMODITY FUTURES TRADING COMMISSION. -- Nothing in this Act
affects the jurisdiction of the Commodity Futures Trading Commission as set forth in the Commodity Exchange Act
(7 USC 1) over trading of commodity futures contracts and options on such contracts involving government
securities.
TITLE IV -- EFFECTIVE DATES
SEC. 401. GENERAL EFFECTIVE DATES.
Except as provided in section 402, this Act and the amendments made by this Act (15 USC 78o-5 note) shall take
effect 270 days after the date of enactment of this Act.
SEC. 402. EFFECTIVE DATE AND REQUIREMENTS FOR REGULATIONS.
Notwithstanding section 401, (15 USC 78o-5 note) the Secretary of the Treasury and each appropriate regulatory
agency shall, within 120 days after the date of enactment of this Act, publish for notice and public comment such
regulations as are initially required to implement this Act, which regulations shall become effective as temporary
regulations 210 days after the date of enactment of this Act and as final regulations not later than 270 days after the
date of enactment of this Act.
SEC. 403. REGISTRATION DATE.
No person may continue to act as a government securities broker or government securities dealer after 270 days
after the date of enactment of this Act unless such person has been registered or has provided notice to the
Commission or the appropriate regulatory agency as required by the amendment made by section 101 of this Act.
Attachment C
207
SECURITIES EXCHANGE ACT OF 1934
Sec. 15C
(5) The Secretary of the Treasury (hereinafter in this section
referred to as the ‘‘Secretary’’), by rule or order, upon the Secretary’s own motion or upon application, may conditionally or unconditionally exempt any government securities broker or government securities dealer, or class of government securities brokers or
government securities dealers, from any provision of subsection (a),
(b), or (d) of this section, other than subsection (d)(3), or the rules
thereunder, if the Secretary finds that such exemption is consistent
with the public interest, the protection of investors, and the purposes of this title.
(b)(1) The Secretary shall propose and adopt rules to effect the
purposes of this title with respect to transactions in government securities effected by government securities brokers and government
securities dealers as follows:
(A) Such rules shall provide safeguards with respect to the
financial responsibility and related practices of government securities brokers and government securities dealers including,
but not limited to, capital adequacy standards, the acceptance
of custody and use of customers’ securities, the carrying and
use of customers’ deposits or credit balances, and the transfer
and control of government securities subject to repurchase
agreements and in similar transactions.
(B) Such rules shall require every government securities
broker and government securities dealer to make reports to
and furnish copies of records to the appropriate regulatory
agency, and to file with the appropriate regulatory agency, annually or more frequently, a balance sheet and income statement certified by an independent public accountant, prepared
on a calendar or fiscal year basis, and such other financial
statements (which shall, as the Secretary specifies, be certified)
and information concerning its financial condition as required
by such rules.
(C) Such rules shall require records to be made and kept
by government securities brokers and government securities
dealers and shall specify the periods for which such records
shall be preserved.
(2) RISK ASSESSMENT FOR HOLDING COMPANY SYSTEMS.—
(A) OBLIGATIONS TO OBTAIN, MAINTAIN, AND REPORT INFORMATION.— Every person who is registered as a government securities broker or government securities dealer under this section shall obtain such information and make and keep such
records as the Secretary by rule prescribes concerning the registered person’s policies, procedures, or systems for monitoring
and controlling financial and operational risks to it resulting
from the activities of any of its associated persons, other than
a natural person. Such records shall describe, in the aggregate,
each of the financial and securities activities conducted by, and
customary sources of capital and funding of, those of its associated persons whose business activities are reasonably likely to
have a material impact on the financial or operational condition of such registered person, including its capital, its liquidity, or its ability to conduct or finance its operations. The Secretary, by rule, may require summary reports of such informa-
General Rulemaking
Authority Under
Section 15C of the
Securities Exchange
Act of 1934
Risk Assessment
Rulemaking Authority
Under Section 15C of
the Securities
Exchange Act of 1934
Sec. 15C
SECURITIES EXCHANGE ACT OF 1934
208
tion to be filed with the registered person’s appropriate regulatory agency no more frequently than quarterly.
(B) AUTHORITY TO REQUIRE ADDITIONAL INFORMATION.—If,
as a result of adverse market conditions or based on reports
provided pursuant to subparagraph (A) of this paragraph or
other available information, the appropriate regulatory agency
reasonably concludes that it has concerns regarding the financial or operational condition of any government securities
broker or government securities dealer registered under this
section, such agency may require the registered person to
make reports concerning the financial and securities activities
of any of such person’s associated persons, other than a natural
person, whose business activities are reasonably likely to have
a material impact on the financial or operational condition of
such registered person. The appropriate regulatory agency, in
requiring reports pursuant to this subparagraph, shall specify
the information required, the period for which it is required,
the time and date on which the information must be furnished,
and whether the information is to be furnished directly to the
appropriate regulatory agency or to a self-regulatory organization with primary responsibility for examining the registered
person’s financial and operational condition.
(C) SPECIAL PROVISIONS WITH RESPECT TO ASSOCIATED PERSONS SUBJECT TO FEDERAL BANKING AGENCY REGULATION.—
(i) COOPERATION IN IMPLEMENTATION.—In developing
and implementing reporting requirements pursuant to
subparagraph (A) of this paragraph with respect to associated persons subject to examination by or reporting requirements of a Federal banking agency, the Secretary
shall consult with and consider the views of each such
Federal banking agency. If a Federal banking agency comments in writing on a proposed rule of the Secretary under
this paragraph that has been published for comment, the
Secretary shall respond in writing to such written comment before adopting the proposed rule. The Secretary
shall, at the request of a Federal banking agency, publish
such comment and response in the Federal Register at the
time of publishing the adopted rule.
(ii) USE OF BANKING AGENCY REPORTS.—A registered
government securities broker or government securities
dealer shall be in compliance with any recordkeeping or reporting requirement adopted pursuant to subparagraph (A)
of this paragraph concerning an associated person that is
subject to examination by or reporting requirements of a
Federal banking agency if such government securities
broker or government securities dealer utilizes for such
recordkeeping or reporting requirement copies of reports
filed by the associated person with the Federal banking
agency pursuant to section 5211 of the Revised Statutes,
section 9 of the Federal Reserve Act, section 7(a) of the
Federal Deposit Insurance Act, section 10(b) of the Home
Owners’ Loan Act, or section 8 of the Bank Holding Company Act of 1956. The Secretary may, however, by rule
adopted pursuant to subparagraph (A), require any reg-
Risk Assessment
Rulemaking Authority
Under Section 15C of
the Securities
Exchange Act of 1934
209
SECURITIES EXCHANGE ACT OF 1934
Sec. 15C
istered government securities broker or government securities dealer filing such reports with the appropriate regulatory agency to obtain, maintain, or report supplemental
information if the Secretary makes an explicit finding,
based on information provided by the appropriate regulatory agency, that such supplemental information is necessary to inform the appropriate regulatory agency regarding potential risks to such government securities broker or
government securities dealer. Prior to requiring any such
supplemental information, the Secretary shall first request
the Federal banking agency to expand its reporting requirements to include such information.
(iii) PROCEDURE FOR REQUIRING ADDITIONAL INFORMATION.—Prior to making a request pursuant to subparagraph (B) of this paragraph for information with respect to
an associated person that is subject to examination by or
reporting requirements of a Federal banking agency, the
appropriate regulatory agency shall—
(I) notify such banking agency of the information
required with respect to such associated person; and
(II) consult with such agency to determine whether the information required is available from such
agency and for other purposes, unless the appropriate
regulatory agency determines that any delay resulting
from such consultation would be inconsistent with ensuring the financial and operational condition of the
government securities broker or government securities
dealer or the stability or integrity of the securities
markets.
(iv) EXCLUSION FOR EXAMINATION REPORTS.—Nothing
in this subparagraph shall be construed to permit the Secretary or an appropriate regulatory agency to require any
registered government securities broker or government securities dealer to obtain, maintain, or furnish any examination report of any Federal banking agency or any supervisory recommendations or analysis contained therein.
(v) CONFIDENTIALITY OF INFORMATION PROVIDED.—No
information provided to or obtained by an appropriate regulatory agency from any Federal banking agency pursuant
to a request under clause (iii) of this subparagraph regarding any associated person which is subject to examination
by or reporting requirements of a Federal banking agency
may be disclosed to any other person (other than a selfregulatory organization), without the prior written approval of the Federal banking agency. Nothing in this
clause shall authorize the Secretary or any appropriate
regulatory agency to withhold information from Congress,
or prevent the Secretary or any appropriate regulatory
agency from complying with a request for information from
any other Federal department or agency requesting the 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.
Risk Assessment
Rulemaking Authority
Under Section 15C of
the Securities
Exchange Act of 1934
Sec. 15C
SECURITIES EXCHANGE ACT OF 1934
210
(vi) NOTICE TO BANKING AGENCIES CONCERNING FINANCIAL AND OPERATIONAL CONDITION CONCERNS.—The Secretary or appropriate regulatory agency shall notify the
Federal banking agency of any concerns of the Secretary or
the appropriate regulatory agency regarding significant financial or operational risks resulting from the activities of
any government securities broker or government securities
dealer to any associated person thereof which is subject to
examination by or reporting requirements of the Federal
banking agency.
(vii) DEFINITION.—For purposes of this subparagraph,
the term ‘‘Federal banking agency’’ shall have the same
meaning as the term ‘‘appropriate Federal banking agency’’ in section 3(q) of the Federal Deposit Insurance Act (12
U.S.C. 1813(q)).
(D) EXEMPTIONS.—The Secretary by rule or order may exempt any person or class of persons, under such terms and
conditions and for such periods as the Secretary shall provide
in such rule or order, from the provisions of this paragraph,
and the rules thereunder. In granting such exemptions, the
Secretary shall consider, among other factors—
(i) whether information of the type required under this
paragraph is available from a supervisory agency (as defined in section 1101(6) of the Right to Financial Privacy
Act of 1978 (12 U.S.C. 3401(6))), a State insurance commission or similar State agency, the Commodity Futures
Trading Commission, or a similar foreign regulator;
(ii) the primary business of any associated person;
(iii) the nature and extent of domestic or foreign regulation of the associated person’s activities;
(iv) the nature and extent of the registered person’s
securities transactions; and
(v) with respect to the registered person and its associated persons, on a consolidated basis, the amount and proportion of assets devoted to, and revenues derived from,
activities in the United States securities markets.
(E) CONFORMITY WITH REQUIREMENTS UNDER SECTION
17(H).—In exercising authority pursuant to subparagraph (A) of
this paragraph concerning information with respect to associated persons of government securities brokers and government
securities dealers who are also associated persons of registered
brokers or dealers reporting to the Commission pursuant to
section 17(h) of this title, the requirements relating to such associated persons shall conform, to the greatest extent practicable, to the requirements under section 17(h).
(F) AUTHORITY TO LIMIT DISCLOSURE OF INFORMATION.—
Notwithstanding any other provision of law, the Secretary and
any appropriate regulatory agency shall not be compelled to
disclose any information required to be reported under this
paragraph, or any information supplied to the Secretary or any
appropriate regulatory agency by any domestic or foreign regulatory agency that relates to the financial or operational condition of any associated person of a registered government securities broker or a government securities dealer. Nothing in this
Risk Assessment
Rulemaking Authority
Under Section 15C of
the Securities
Exchange Act of
1934
211
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Sec. 15C
paragraph shall authorize the Secretary or any appropriate
regulatory agency to withhold information from Congress, or
prevent the Secretary or any appropriate regulatory agency
from complying with a request for information from any other
Federal department or agency requesting the 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, United States Code, this paragraph shall be
considered a statute described in subsection (b)(3)(B) of such
section 552.
(3)(A) With respect to any financial institution that has filed
notice as a government securities broker or government securities
dealer or that is required to file notice under subsection (a)(1)(B),
the appropriate regulatory agency for such government securities
broker or government securities dealer may issue such rules and
regulations with respect to transactions in government securities
as may be necessary to prevent fraudulent and manipulative acts
and practices and to promote just and equitable principles of trade.
If the Secretary of the Treasury determines, and notifies the appropriate regulatory agency, that such rule or regulation, if implemented, would, or as applied does (i) adversely affect the liquidity
or efficiency of the market for government securities; or (ii) impose
any burden on competition not necessary or appropriate in furtherance of the purposes of this section, the appropriate regulatory
agency shall, prior to adopting the proposed rule or regulation, find
that such rule or regulation is necessary and appropriate in furtherance of the purposes of this section notwithstanding the Secretary’s determination.
(B) The appropriate regulatory agency shall consult with and
consider the views of the Secretary prior to approving or amending
a rule or regulation under this paragraph, except where the appropriate regulatory agency determines that an emergency exists requiring expeditious and summary action and publishes its reasons
therefor. If the Secretary comments in writing to the appropriate
regulatory agency on a proposed rule or regulation that has been
published for comment, the appropriate regulatory agency shall respond in writing to such written comment before approving the
proposed rule or regulation.
(C) In promulgating rules under this section, the appropriate
regulatory agency shall consider the sufficiency and appropriateness of then existing laws and rules applicable to government securities brokers, government securities dealers, and persons associated with government securities brokers and government securities
dealers.
(4) Rules promulgated and orders issued under this section
shall—
(A) be designed to prevent fraudulent and manipulative
acts and practices and to protect the integrity, liquidity, and
efficiency of the market for government securities, investors,
and the public interest; and
(B) not be designed to permit unfair discrimination between customers, issuers, government securities brokers, or
government securities dealers, or to impose any burden on
Risk Assessment
Rulemaking Authority
Under Section 15C of
the Securities
Exchange Act of 1934
Attachment D
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103 P.L. 202, *103; 107 Stat. 2344, **2346;
1993 Enacted S. 422; 103 Enacted S. 422
records expeditiously upon the Commission's request.
"(E) Exclusion for examination reports.----Nothing in this paragraph shall be construed so as to permit the
Commission to require any government securities broker or government securities dealer to obtain, maintain, or
furnish any examination report of any appropriate regulatory agency other than the Commission or any supervisory
recommendations or analysis contained in any such examination report.
"(F) Authority to limit disclosure of information.----Notwithstanding any other provision of law, the Commission
and the appropriate regulatory agencies shall not be compelled to disclose any information required or obtained under this
paragraph. Nothing in this paragraph shall authorize the Commission or any appropriate regulatory agency to withhold
information from Congress, or prevent the Commission or any appropriate regulatory agency 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 from complying with an order of a court of the United States in an action brought by the
United States, the Commission, or the appropriate regulatory agency. For purposes of section 552 of title 5, United States
Code, this subparagraph shall be considered a statute described in subsection (b)(3)(B) of such section 552.".
(b) Conforming Amendments.----(1) Section 15C(a)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78o--5(a)(4))
is amended by inserting ", other than subsection (d)(3)," after "subsection (a), (b), or (d) of this section".
(2) Section 15C(f)(2) of such Act is amended---(A) in the first sentence, by inserting ", other than subsection (d)(3)", after "threatened violation of the provisions
of this section"; and
(B) in the second sentence, by inserting "(except subsection (d)(3))" after "other than this section".
[*104] Sec. 104. LARGE POSITION REPORTING.
Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 78o--5) is amended---[**2347] (1) by redesignating subsection (f) as subsection (g); and
(2) by inserting after subsection (e) the following new subsection:
"(f) Large Position Reporting.---"(1) Reporting requirements.----The Secretary may adopt rules to require specified persons holding, maintaining,
or controlling large positions in to--be--issued or recently issued Treasury securities to file such reports regarding such
positions as the Secretary determines to be necessary and appropriate for the purpose of monitoring the impact in the
Treasury securities market of concentrations of positions in Treasury securities and for the purpose of otherwise assisting
the Commission in the enforcement of this title, taking into account any impact of such rules on the efficiency and liquidity
of the Treasury securities market and the cost to taxpayers of funding the Federal debt. Unless otherwise specified by
the Secretary, reports required under this subsection shall be filed with the Federal Reserve Bank of New York, acting as
agent for the Secretary. Such reports shall, on a timely basis, be provided directly to the Commission by the person with
whom they are filed.
"(2) Recordkeeping requirements.----Rules under this subsection may require persons holding, maintaining, or
controlling large positions in Treasury securities to make and keep for prescribed periods such records as the Secretary
determines are necessary or appropriate to ensure that such persons can comply with reporting requirements under this
subsection.
"(3) Aggregation rules.----Rules under this subsection---"(A) may prescribe the manner in which positions and accounts shall be aggregated for the purpose of this
subsection, including aggregation on the basis of common ownership or control; and
"(B) may define which persons (individually or as a group) hold, maintain, or control large positions.
"(4) Definitional authority; determination of reporting threshold.—"(A) In prescribing rules under this subsection, the Secretary may, consistent with the purpose of this subsection,
define terms used in this subsection that are not otherwise defined in section 3 of this title.
Large
Position
Rulemaking
Authority
Under
Section 15C
of the
Securities
Exchange
Act of 1934
Page 4
103 P.L. 202, *104; 107 Stat. 2344, **2347;
1993 Enacted S. 422; 103 Enacted S. 422
"(B) Rules under this subsection shall specify---"(i) the minimum size of positions subject to reporting under this subsection, which shall be no less than the size
that provides the potential for manipulation or control of the supply or price, or the cost of financing arrangements, of an
issue or the portion thereof that is available for trading;
"(ii) the types of positions (which may include financing arrangements) to be reported;
"(iii) the securities to be covered; and
"(iv) the form and manner in which reports shall be transmitted, which may include transmission in machine
readable form.
"(5) Exemptions.----Consistent with the public interest and the protection of investors, the Secretary by rule or order
may exempt in whole or in part, conditionally or unconditionally, [**2348] any person or class or persons, or any
transaction or class of transactions, from the requirements of this subsection.
"(6) Limitation on disclosure of information.----Notwithstanding any other provision of law, the Secretary and 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 Secretary or the Commission to withhold information from Congress,
or prevent the Secretary or 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 from complying with an
order of a court of the United States in an action brought by the United States, the Secretary, or the Commission. For
purposes of section 552 of title 5, United States Code, this paragraph shall be considered a statute described in subsection
(b)(3)(B) of such section 552.".
[*105] Sec. 105. AUTHORITY OF THE COMMISSION TO REGULATE TRANSACTIONS IN EXEMPTED
SECURITIES.
(a) Prevention of Fraudulent and Manipulative Acts and Practices.----Section 15(c)(2) of the Securities Exchange Act
of 1934 (15 U.S.C. 78o(c)(2)) is amended---(1) by inserting "(A)" after "(2)";
(2) by striking "fictitious quotation, and no municipal securities dealer" and inserting the following:
"fictitious quotation.
"(B) No municipal securities dealer";
(3) by striking "fictitious quotation. The Commission shall" and inserting the following:
"fictitious quotation.
"(C) No government securities broker or government securities dealer shall make use of the mails or any means or
instrumentality of interstate commerce to effect any transaction in, or induce or attempt to induce the purchase or sale of,
any government security in connection with which such government securities broker or government securities dealer
engages in any fraudulent, deceptive, or manipulative act or practice, or makes any fictitious quotation.
"(D) The Commission shall"; and
(4) by adding at the end the following:
"(E) The Commission shall, prior to adopting any rule or regulation under subparagraph (C), consult with and
consider the views of the Secretary of the Treasury and each appropriate regulatory agency. If the Secretary of the Treasury
or any appropriate regulatory agency comments in writing on a proposed rule or regulation of the Commission under
such subparagraph (C) that has been published for comment, the Commission shall respond in writing to such written
comment before adopting the proposed rule. If the Secretary of the Treasury determines, and notifies the Commission,
that such rule or regulation, if implemented, would, or as applied does (i) adversely affect the liquidity or efficiency of the
market for government securities; or (ii) impose any burden on competition not necessary or appropriate in furtherance of
the purposes of this section, the Commission shall, prior to adopting the proposed rule or regulation, find that such rule
or regulation is necessary and appropriate in furtherance of the purposes of this section notwithstanding the Secretary's
determination.".
Large
Position
Rulemaking
Authority
Under
Section 15C
of the
Securities
Exchange
Act of 1934
Attachment E
Updated: 5/13/2021
Attachment
F
2021 Table 1 (OMB# 1530-0064)
ADMINISTRATION OF THE GOVERNMENT SECURITIES ACT REGULATIONS (17 CFR Chapter IV)
PAPERWORK REDUCTION ACT RENEWAL SUPPORTING STATEMENT (QUESTIONS 12, 13 & 14)
ANNUAL REPORTING OR
DISCLOSURE BURDEN
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Number of
Respondents
Number of
Responses Per
Respondent
Total Annual
Responses
Hours Per
Response
Total
Hours
Cost Per Hour
Total Cost
Government
Cost
Section 400.4
Section 400.5
Section 402.2c
Section 402.2(i)
Section 404.2
Section 404.5
Section 405.2(a)
Section 405.2(c)
Section 405.3
Section 405.5
Section 420.3
Section 420.4(a)*
TOTAL REPORTING:
399
54
1
1
0
1
1
1
1
0
20
0
479
1
1
1
2
1
4
16
1000
1
4
1
1
399
54
1
2
0
4
16
1000
1
0
20
0
1,497
2
1
5
0.5
1
25
12
0.02
3
3.5
10
2
798
54
5
1
0
100
192
20
3
0
200
0
1,373
$65
$65
$185
$185
$65
$80
$80
$80
$185
$65
$120
$30
$51,870
$3,510
$925
$185
$0
$8,000
$15,360
$1,600
$555
$0
$24,000
$0
$106,005
* This was a one-time reporting requirement in Fiscal Year 1997.
ANNUAL
RECORDKEEPING
BURDEN
Section 401.7
Section 403.4
Sectiion 403.5(a)-(c)
Section 403.5(d)
Section 403.5(e)
Section 404.2
Section 404.2(b)
Section 404.3
Section 404.4
Section 420.4(b)
Section 420.4(c)
Section 450.4
TOTAL RECORDKEEPING:
(1)
Number of
Recordkeepers
10
1
38
1082
8
1
0
1
38
40
65
907
2,191
TOTAL (COMBINED) ANNUAL BURDEN
RESPONDENTS:
2,670
HOURS:
215,111
COST:
$7,059,760
TAL GOVERNMENT COST:
$126,095
(2)
Annual Hours
Per
Recordkeeper
3
500
50
100
250
249
10
254
125
7
75
100
(3)
Total
Recordkeeping
Hours
30
500
1900
108200
2000
249
0
254
4750
280
4875
90700
213,738
(4)
(5)
Recordkeeping
Cost Per
Hour
Retention Period
3 yrs
3 - 6 yrs
3 yrs
3 - 6 yrs
6 yrs
3 - 6 yrs
6 yrs
$65
$85
$55
$30
$85
$30
$65
$65
$65
$65
$65
$30
(6)
(7)
Total Cost
Government
Cost
$1,950
$42,500
$104,500
$3,246,000
$170,000
$7,470
$0
$16,510
$308,750
$18,200
$316,875
$2,721,000
$6,953,755
$120
$1,805
$2,165
$19,020
$600
$1,805
$0
$600
$2,165
$3,605
$3,605
$17,535
$53,025
$2,925
$820
$165
$0
$0
$1,205
$6,125
$300
$300
$0
$61,230
$0
$73,070
| File Type | application/pdf |
| File Modified | 2021-06-25 |
| File Created | 2021-06-16 |