CITE
15 USC Sec. 78m 01/05/2009
EXPCITE
TITLE 15 - COMMERCE AND TRADE
CHAPTER 2B - SECURITIES EXCHANGES
HEAD
Sec. 78m. Periodical and other reports
STATUTE
(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)
(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.
SOURCE
(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]."
ASSIGNMENT OF FUNCTION RELATING TO GRANTING OF AUTHORITY FOR ISSUANCE OF CERTAIN DIRECTIVES
Memorandum of President of the United States, May 5, 2006, 71
F.R. 27943, provided:
Memorandum for the Director of National Intelligence
By virtue of the authority vested in me by the Constitution and
laws of the United States, including section 301 of title 3, United
States Code, I hereby assign to you the function of the President
under section 13(b)(3)(A) of the Securities Exchange Act of 1934,
as amended (15 U.S.C. 78m(b)(3)(A)). In performing such function,
you should consult the heads of departments and agencies, as
appropriate.
You are authorized and directed to publish this memorandum in the
Federal Register.
George W. Bush.
FOOTNOTE
(!1) So in original. Probably should be "account."