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& 201.2 Appearance and practice before

the Commission. 1 (a) By non-lawyers. An individual may appear in his own behalf, a member of a partnership may represent the partnership, a bona fide officer of a corporation, trust or association may represent the corporation, trust or association, and an officer or employee of a State commission or of a department or political subdivision of a State may represent the State commission or the department or political subdivision of the State, in any proceeding.

(b) By lawyers. A person may be represented in any proceeding by an attorney at law admitted to practice before the Supreme Court of the United States, or the highest court of any State or Territory of the United States, or the Court of Appeals or the District Court of the United States for the District of Columbia.

(c) Representation only as specified. A person shall not be represented at any hearing before the Commission or a hearing officer except as stated in paragraphs (a) and (b) of this section or except as otherwise permitted by the Commission.

(d) Notice of appearance; designation for service; power of attorney. When an individual appears in his own behalf before the Commission or a hearing officer in a particular proceeding which involves a hearing or an opportunity for hearing, he shall file with the Commission or otherwise state on the record an address at which any notice or other written communication required to be served upon him or furnished to him may be sent. When an attorney appears before the Commission or a hearing officer in a representative capacity in a particular proceeding which involves a hearing or an opportunity for hearing, he shall file with the Commission a written notice of such appearance, which shall state his name, address and telephone number and the name and address of the person or persons on whose behalf he appears. Any additional notice or other written communication required to be served or furnished to the client may be sent to the attorney at the attorney's stated address. Any person appearing or prac

ticing before the Commission in a representative capacity may be required to file a power of attorney with the Commission showing his authority to act in such capacity.

(e) Suspension and disbarment. The Commission may deny, temporarily or permanently, the privilege of appearing or practicing before it in any way to any person who is found by the Commission after notice of and opportunity for hearing in the matter (1) not to possess the requisite qualifications to represent others, or (2) to be lacking in character or integrity or to have engaged in unethical or improper professional conduct.

(f) Contemptuous conduct. Contemptuous conduct at any hearing before the Commission or a hearing officer shall be ground for exclusion from said hearing and for summary suspension without a hearing for the duration of the hearing.

(g) Practice defined. For the purposes of this rule, practicing before the Commission shall include, but shall not be limited to (1) transacting any business with the Commission; and (2) the preparation of any statement, opinion or other paper by any attorney, accountant, engineer or other expert, filed with the Commission in any registration statement, notification, application, report or other document with the consent of such attorney, accountant, engineer or other expert.

(h) Service on attorneys. In any proceeding where an attorney has filed an appearance pursuant to paragraph (d) of this section, any notice or other written communication required to be served upon or furnished to the client should also be served upon or furnished to the attorney (or one of such attorneys if the client is represented by more than one attorney) in the same manner as prescribed for his client, regardless of whether such communication is furnished directly to the client. [25 F.R, 6728, July 15, 1960, as amended at 29 F.R. 4966, Apr. 9, 1964; 31 F.R. 5688, Apr. 13, 1966) $ 201.4 Issuance, amendment and re

peal of rules of general application. (a) By petition. Any person desiring the issuance, amendment or repeal of a rule of general application may file a petition therefor with the Secretary of the Commission. Such petition shall include a statement setting forth the text of any proposed rule or amendment de

1 Additional restrictions upon practice by former employees of the Commission are contained in Rule 6 of the Commission's Conduct Regulation ($ 200.735–8 of this chapter).

sired or specifying the rule, the repeal notices issued by the Commission. The of which is desired and stating the nature parties or persons entitled to notice shall of his interest and his reasons for seek- be timely informed of the time, place and ing the issuance, amendment or repeal nature of any hearing and the legal auof the rule. The Secretary shall ac- thority and jurisdiction under which the knowledge receipt of the petition and hearing is to be held, and furnished a refer it to the Commission for such action short and simple statement of the matas the Commission deems appropriate, ters of fact and law to be considered and and shall notify the petitioner of the determined. In proceedings in which an action taken by the Commission.

answer is directed pursuant to $201.7, (b) Notice of proposed issuance, the order for proceeding shall set forth amendment or repeal of rules. Except the action proposed and the factual and where the Commision finds that notice legal basis alleged therefor in such detail and public procedure are impracticable, as will permit a specific response thereto. unnecessary, or contrary to the public (b) Notice of hearing; service of nointerest, whenever the Commission pro- tice. The time and place for any hearing poses to issue, amend, or repeal any rule in a proceeding shall be fixed with due or regulation of general application other regard for the public interest and the than an interpretative rule, general convenience and necessity of the parties statement of olicy, or a rule of agency or their representatives. Each party or organization, procedure, or practice, or person entitled to notice shall be given any matter relating to agency manage- notice of hearing a reasonable time in ment or personnel or to public property, advance of the hearing, and such notice loans, grants, benefits, or contracts, there may be given by personal service, by conshall first be published in the FEDERAL firmed telegraphic notice or, in any proREGISTER a notice of the proposed action. ceedings other than those pursuant to Such notice shall include (1) a statement section 8 of the Securities Act of 1933 or of the time, place, and nature of the rule- sections 305 or 307 of the Trust Indenmaking proceeding, with particular ture Act of 1939, by registered mail or reference to the manner in which inter- certified mail, addressed to his last known ested persons shall be afforded the op- business or residence address or to the portunity to participate in such proceed- address of his agent for service. ings; (2) reference to the authority under (c) Publication of notice of hearing. which the rule is proposed; and (3) the Unless otherwise ordered by the Comterms or substance of the proposed rule mission, notice of any public hearing or a description of the subjects and issues

shall be given general circulation by reinvolved.

lease to the public press and, where [25 F.R. 6729, July 15, 1960]

ordered, by publication in the FEDERAL

REGISTER. 8 201.5 Business hours.

(d) Amendment of order for proceedThe principal office of the Commission, ings. In any proceeding amendments to at 500 North Capitol Street, Washington, the matters of fact and law to be conD.C. 20549, is open each except Sat- sidered may be authorized, for cause urdays, Sundays, and holidays, from 9 shown, by the hearing officer during the a.m. to 5:30 p.m., eastern standard time course of the hearing, or by the Commisor eastern daylight-saving time, which- sion at any time. ever is currently in effect in Washington. (e) Effect of failure to appear. If [25 F.R. 6729, July 15, 1960, as amended at any person who is named in an order 33 F.R. 4369, Mar. 9, 1968].

for proceeding as a person against whom 8 201.6 Notice of proceedings and hear

findings may be made or sanctions imings.

posed in the proceeding does not file a (a) Notice of proceedings; order for

notice of appearance in the proceeding proceedings. Whenever an order for

within 15 days after service upon him of proceeding is issued by the Commission,

the order for proceeding (unless a difappropriate notice thereof shall be given

ferent period is specified in the order), by the Secretary or other duly designated

or if he fails to appear at a hearing of officer of the Commission to each party

which he has been duly notified, such to the proceeding and any other person person shall be deemed in default and entitled to notice or to the person desig- the proceeding may be determined nated by any such party or person as against him upon consideration of the being authorized to receive on his behalf order for proceeding, the allegations of 123


which may be deemed to be true. For the purpose of this paragraph an answer shall constitute a notice of appearance. (Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2) (25 F.R. 6729, July 15, 1960, as amended at 29 F.R. 9487, July 11, 1964; 33 F.R. 17683, Nov. 27, 1968] 8 201.7 Answers.

(a) When required. In any order for proceeding issued by the Commission, the Commission may direct that any party respondent shall file an answer to the allegations contained in the order for proceeding, and any party in any proceeding may file an answer.

(b) Time to file answer. Except where a different period is provided by rule or by order, a party respondent directed to file an answer as provided in paragraph (a) of this section shall do so within 15 days after service upon him of the order for proceeding. Any other person admitted to such a proceeding (except a person becoming party under § 201.9(a)) may be required to file an answer within such time as is directed by the hearing officer or the Commission. Where amendments to the matters of fact and law to be considered in such proceeding are authorized subsequent to the institution of the proceeding, the parties may be required to answer within a reasonable time the matters of fact and law to be considered as amended.

(c) Requirements of answer; effect of failure to deny. Unless otherwise directed by the Commission, an answer required by this section shall specifically admit, deny, or state that the party does not have and is unable to obtain sufficient information to admit or deny, each allegation in the order for proceeding. A statement of a lack of information shall have the effect of a denial. Any allegation not denied shall be deemed to be admitted. When a party intends in good faith to deny only a part or a qualification of an allegation, he shall specify so much of it as is true and shall deny only the remainder.

(d) Motion for more definite statement. A party may file, with an answer required by this section, a motion for a more definite statement of specified matters of fact or law to be considered or determined. Such motion shall state the respects in which, and the reasons why, each such matter of fact or law should be required to be made more definite. If the motion is granted, the order granting such motion will set the periods in

which such statement, and any answer thereto, shall be filed.

(e) Effect of failure to file answer. If a party fails to file an answer required by this rule within the time provided, such person shall be deemed in default and the proceeding may be determined against him by the Commission upon consideration of the order for proceeding, the allegations of which may be deemed to be true.

(f) Signature on answer; requirement and effect. Every answer filed pursuant to this section shall be signed by the party filing it or by at least one attorney, in his individual name, who represents such party. The signature constitutes a certificate by the signer that he has read the answer; that to the best of his knowledge, information and belief there is good ground to support it; and that it is not interposed for delay. (Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2) (25 F.R. 6730, July 15, 1960, as amended at 29 F.R. 9487, July 11, 1964] & 201.8 Settlements,

agreements, and conferences. (a) Offers of settlement. (1) Parties may propose in writing offers of settlement which shall be submitted to and considered by the interested division of the Commission where time, the nature of the proceeding, and the public interest permit. Such offers may be made at any time during the course of the proceeding; and (2) the interested division shall present an offer of settlement to the Commission with its recommendation, except that where the division's recommendation is unfavorable, the offer shall not be presented to the Commission by the division unless the party making the offer so requests. Where the Commission deems it appropriate, it may also give the party making the offer an opportunity to make an oral presentation to the Commission. Where the Commission rejects an offer of settlement, the party making the offer shall be notified of the Commission's action and the offer of settlement shall be deemed withdrawn and such offer and any documents relating thereto shall not constitute a part of the record. Final acceptance by the Commission of any offer of settlement will be only by its Findings and Opinion issued in the proceedings.

(b) Specification of procedures. In any proceeding the moving party shall, in the moving papers or the notice of hearing if that is practicable, or, if not,

as early as practicable in the course of tious hearing or aid in the disposition of the hearing, specify the procedures con- the proceeding. At the conclusion of a sidered necessary or appropriate in the conference the hearing officer shall enter proceeding with particular reference to a ruling or order which recites the mat(1) whether their should be an initial ters agreed upon by the parties and any decision by a hearing officer, (2) whether procedural determinations made by the the interested division of the Commis- hearing officer. sion may assist in the preparation of the (Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, Commission's decision, and (3) whether 78d-2) [25 F.R. 6730, July 15, 1960, as there should be a 30-day waiting period amended at 29 F.R. 9487, July 11, 1964; 31 between the issuance of the Commis

F.R. 10573, Aug. 6, 1966) sion's order and the date it is to become

8 201.9 Parties and limited participation. effective. Any other party may object promptly or within such time as shall be (a) Who may become parties; interdesignated by the hearing officer, having

ested division a party. Any interested due regard to the circumstances of the representative, agency, authority or incase and to the procedure so specified,

strumentality of the United States or any and such party may specify such addi

interested State, State commission, tional procedure as he considers neces

municipality or other political subdivisary or appropriate; in the absence of

sion of a State shall become a party to such objection or specification of addi

any proceeding upon the filing of a writtional procedure, such party may be

ten notice of appearance therein. The deemed to have waived objection to the

interested division of the Commission specified procedure and to the omission

shall be deemed a party to all proceedof any procedure not specified, unless

ings. the Commission, for good cause shown

(b) Parties in broker-dealer proceedand upon taking into account any re- ings. (1) In proceedings under sections sulting prejudice to other parties, de- 15(b), 15A(1) (2) or 19(a) (3) of the Setermines the contrary.

curities Exchange Act of 1934, any per(c) Agreement on procedure. Any son associated with a member of a naproposal as to the procedural matters tional securities association, a member of enumerated in paragraph (b) of this sec- a national securities exchange, a broker tion which is agreed upon by all parties or a dealer, whose interests may be present and which is not contrary to any

affected by the proceedings, shall be enspecific provision of this part, shall, sub- titled to participate as a party. If he ject to the approval of the hearing officer, participates generally in the proceedings be embodied in an appropriate stipula- or files a notice of appearance, he shall tion, which shall become part of the be deemed a party of record and will be record, and shall determine the proce- given notices of intermediate developdure in that respect, except that the ments in the proceedings. In any event Commission may order that the hearing he may inform himself of such developoficer prepare an initial decision not- ments by attendance at the hearings or withstanding any waiver by the parties. examination of the record (whether the

(d) Conferences. At the opening of proceedings be public or private) or by a hearing or at any other time during arrangement with a party of record so the course of any proceeding, to the ex- that he can determine whether he detent practicable, where time, the nature sires to be heard at any time. The term of the proceeding and the public interest “person associated" as used in this secpermit, the hearing officer shall, at the tion shall niean a person associated with request of any party or upon his own a member, broker or dealer in any of the motion, hold conferences for the purpose capacities specified in sections 15(b) and of clarifying and simplifying issues by 15A (b) (4) of the Securities Exchange consent of the parties, including, where Act of 1934. practical and reasonable, considering (2) Unless the Commission otherwise (1) the possibility of obtaining stipula- directs, subparagraphs (1) of this parations and admissions of facts and of graph shall apply only to proceedings inauthenticity and contents of documents stituted prior to August 20, 1964. The which will avoid unnecessary proof; (2) term “person associated" referred to expedition in the presentation of evi- therein shall mean a person associated dence; (3) the exchange of copies of pro- with a member, broker or dealer in any posed exhibits; and (4) such other mat- of the capacities specified in sections ters as will promote a fair and expedi- 15(b) and 16A (b) (4) of the Securities

Exchange Act of 1934 as in effect prior including continuances, the filing of to August 20, 1964.

amendments, answers, motions, or briefs (c) Limited participation; leave to be by parties to the proceeding, or the fixheard. Any person may, at the discre- ing of time for any such action, and such tion of the hearing officer, be given leave person shall not be entitled as of right to be heard in any proceeding as to any to other notice thereof, or to service of matter affecting his interests. Requests copies of documents. for leave to be heard shall be in writing, (e) When intervention as party shall set forth the nature and extent of granted. Except as provided in parathe applicant's interest in the proceeding, graphs (a) and (b) of this section, no and, except where good cause for late person shall be admitted as a party to filing is shown, shall be filled not later a proceding by intervention unless the than 2 days prior to the date fixed for Commission is satisfied on the basis of the commencement of the hearing, or the written application of such person where a respondent is required to answer, (and any evidence taken in connection requests for leave to be heard shall be therewith) that his participation as a filed within the time provided for the party will be in the public interest, and filing of the answer. The hearing officer that leave to be heard pursuant to paraor the Commission may direct any per- graphs (c) and (d) of this section would son requesting leave to be heard to sub- be inadequate for the protection of his mit himself to examination as to his in- interests. terest in the proceeding.

(f) Permission to state views. Any (d) Rights of participant. Leave to person who has not complied with the be heard pursuant to paragraph (c) of requirements of paragraph (c) of this this section may include such rights of section may, in the discretion of the a party as the hearing officer may deem hearing officer, be permitted to file & appropriate, except that oral argument memorandum or make an oral statement before the Commission may be permitted of his views, and the hearing officer may only by the Commission upon written accept for the record written communirequest therefor. Persons granted leave cations received from any such person. to be heard shall be bound, except as may Unless offered and admitted as evidence be otherwise determined by the hearing of the truth of the statements therein officer, by any stipulation between the made, the memoranda and oral or written parties to the proceeding with respect to communications submitted pursuant to procedure, including submission of evi- the provisions of this paragraph will be dence, substitution of exhibits, correc- considered only to the extent that the tions of the record, the time within which statements therein made are otherwise briefs or exceptions may be filed or pro- supported by the record. posed findings and conclusions may be (g) Certain persons entitled to leave submitted, the filing of initial decisions, to be heard. The hearing officer is dithe procedure to be followed in the prep- rected to grant leave to be heard under aration of decisions, and the effective paragraph (c) or (f) of this section, date of the Commission's order in the whichever may be applicable, to any percase. Where the filing of briefs or ex- son to whom it is proposed to issue any ceptions or the submission of proposed security in exchange for one or more findings and conclusions are waived by bona fide outstanding securities, claims the parties to the proceedings, a person or property interests, or partly in such granted leave to be heard pursuant to exchange and partly for cash, where the paragraph (c) of this section shall not Commission is authorized to approve the be permitted to file a brief or exceptions terms and conditions of such issuance or submit proposed findings and conclu- and exchange after a hearing upon the sions except by leave of the Commission fairness of such terms and conditions. or of the hearing officer, if the hearing

(h) Review by Commission; modificais pending before the hearing officer. tion of participation provisions. Any Except as may otherwise be specifically ruling of the hearing officer as to matdirected by the hearing officer at the re- ters within the scope of this section is quest of any person granted leave to be subject to review by the Commission at heard, such person shall be expected to the close of the proceeding, or at the inform himself by attendance at public

Commission's discretion, in the course of hearings and by examination of the the proceeding. The Commission may public files of the Commission as to the by order in any case, modify the provivarious steps taken in the proceeding sions of this section which would other

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