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wise be applicable, and may impose such faith request a hearing officer to withterms and conditions on the participation draw on the grounds of personal bias or of any person in any proceeding as it may other disqualification. The person seekdeem necessary or appropriate in the ing disqualification shall file with the public interest.
hearing officer a timely affidavit setting (Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, forth in detail the facts alleged to con78d-2) (25 F.R. 6730, July 15, 1960, as stitute grounds for disqualification, and amended at 29 F.R. 9487, July 11, 1964; 29 the hearing officer may file a response F.R. 13422, Sept. 29, 1964)
thereto. If the hearing officer believes § 201.10 Consolidation.
himself not disqualified, he shall so rule By order of the Commission, proceed
and proceed with the hearing. If the ings involving a common question of law
person seeking disqualification excepts or fact may be joined for hearing of any
from the ruling of the hearing oficer, the or all the matters in issue in such pro
hearing officer shall certify the question ceedings and such proceedings may be
together with the affidavit and any reconsolidated; and the Commission may
sponse filed in connection with it, to the make such orders concerning the con
Commission. The Commission may rule Quct of such proceedings as may tend
on the question without hearing or it may to avoid unnecessary costs or delay.
require testimony or argument on the
issues raised. The affidavit and response, [25 F.R. 6731, July 15, 1960)
any testimony taken, and the decision 201.11 Hearings for the purpose of thereon shall be part of the record in the
taking evidence; motions and appli- case.
(d) Functions of hearing officer. The (a) When held. Hearings for the pur
hearing officer shall regulate the course pose of taking evidence shall be held as
of the hearing and shall perform the ordered by the Commission.
functions specified in paragraph (e) of (b) Presiding officers; public hearings.
this section. Upon notice to all parties, All such hearings shall be held before
the hearing officer may reopen any hearthe Commission or a hearing officer, who
ing prior to the filing of an initial derishall be a hearing examiner or other
sion therein, or, if no initial decision is officer duly designated by the Commis
to be filed, prior to the time fixed for the sion or shall be one or more members
filing of final briefs with the Commission. of the Commission. The hearings shall
(e) Rulings by hearing officer; excepbe conducted in an impartial and orderly
tions. Except as otherwise directed by manner. All such hearings, except
the Commission, or where these rules hearings on applications for confidential
specifically provide otherwise, all applitreatment filed pursuant to the provisions
cations, motions and objections made of Clause 30 of Schedule A of the Securi
during a proceeding prior to the filing ties Act of 1933, section 24(b) of the
of an initial decision therein, or, if no Securities Exchange Act of 1934, section
initial decision is to be filed, prior to the 22(b) of the Public Utility Holding
time fixed for the filing of final briefs Company Act of 1935, section 45(a) of
with the Commission, shall be made to the Investment Company Act of 1940,
or referred to and decided by the hearing section 210(a) of the Investment Ad
officer, except that where his ruling visers Act of 1940, or the rules and regu
would dispose of the proceeding in whole lations promulgated under such sections,
or in part, it shall be made only in an shall be public unless otherwise ordered
initial decision submitted after the conby the Commission. No hearing shall be
clusion of the hearing. Except where private where all respondents request
the hearing officer prescribes or permits that the hearing be made public.
a different procedure, any application or (c) Disqualification of hearing officer.
motion shall be in writing and shall be In any hearing for the purpose of taking
accompanied by a written brief of the evidence a hearing officer may withdraw
points and authorities relied upon in
support of the same and any party may from a case when he deems himself dis
file an answer within five days after seryqualified. In such event he shall im
ice upon him of such motion or applicamediately notify the Commission of his
tion as provided in § 201.23. Objections withdrawal and inform it of his reasons
to the admission or exclusion of evidence for such action. Any party or any per- must be made on the record and shall be son who has been granted leave to be in short form, stating the grounds of heard pursuant to § 201.9 may in good objections relied upon, and the transcript shall not include argument or de- writing and shall specify the material bate thereon except as ordered by the relevant to the ruling involved. The hearing officer. Rulings by the hearing Commission may decline to consider the oficer on all applications, motions and ruling certified, if it determines that objections shall be part of the record. interlocutory review is not warranted or Exceptions to any ruling thereon by the appropriate under the circumstances. hearing officer need not be noted at the If the hearing officer does not certify a. time of the ruling in order to be urged matter, a party who had requested certibefore the Commission. Such excep- fication may apply to the Commission tions will be deemed waived however, for review, or the Commission on its own. unless raised (1) in accordance with motion may direct that any matter be $201.12(a), (2) in the manner of a pro- submitted to it for review. An applicaposed finding in accordance with $ 201.- tion for review shall be in writing and 16(d), or (3) in a petition for Commis- shall briefly state the grounds relied on. sion review of an initial decision in ac- Review will not be granted unless the cordance with $ 201.17.
Commission concludes that the hearing (f) Transcript of hearings. Hearings officer erred in failing to certify the for the purpose of taking evidence shall matter. Unless otherwise ordered by be stenographically reported, and a the hearing officer, the hearing before transcript thereof shall be made.
the hearing officer shall continue whether (Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, or not such certification or application 78d-2) [25 F.R. 6731, July 15, 1960, as is made. Failure to request certification amended at 29 F.R. 3567, Mar. 20, 1964; 29 or to make such application will not F.R. 9488, July 11, 1964)
waive the right to seek review of the 8 201.11.1 Production of witnesses' state
ruling of the hearing officer after the ments.
close of the hearing pursuant to $ $ 201.16
(d) and 201.17. The Commission will After a witness called by the attorney
prescribe the procedure for each applifor the interested Division of the Com
cation hereunder and paragraph (c) of mission has given direct testimony in a
this section shall not apply. hearing, any other party may request
(b) Motions to Commission. All moand obtain the production of any statement, or part thereof, of such witness,
tions and applications not required to be
made to the hearing officer pursuant to pertaining to his direct testimony, in the
$ 201.11 shall be made to and ruled upon possession of the Division, subject, how
by the Commission. ever, to the limitations applicable to the production of witnesses'
(c) Filing of motions to Commission;
statements under the Jencks Act, 18 U.S.C. 3500.
briefs; stays. Motions or applications
calling for determination by the Com(31 F.R. 10573, Aug. 6, 1966)
mission shall be filed with the Secretary 8 201.12 Interlocutory review; motions or other duly authorized officer of the
and applications to Commission. Commission in writing provided that mo(a) Review of hearing officer's rulings.
tions or applications calling for determiThe Commission will not review a ruling
nation by the Commission but made in of the hearing officer prior to its con
the course of a hearing may be filed, in sideration of the entire proceeding in
writing, with the hearing officer, who the absence of extraordinary circum
shall refer such motion or application stances. Except as provided in § 201.11
to the Commission. Any such motion (c), a hearing officer shall not certify a
or application shall be accompanied by ruling for interlocutory review by the
a written brief of the points and auCommission unless a party so requests
thorities relied upon in support of the and (1) the hearing officer finds, either
same. Any party may file an answering on the record or in writing, that in his
brief within five days after service upon opinion a subsequent reversal of his
him of such motion or other application ruling would cause unusual delay or ex
as provided in § 201.23 unless otherwise
directed by the Commission. Motions pense, taking into consideration the
and applications will be considered on probability of such reversal, or (2) his
the briefs filed following the time for ruling would compel testimony of Com
filing the answering brief, unless othermission members, officers or employees wise directed by the Commission. No or the production of documentary evi- oral argument will be heard on such dence in their custody. The certifica- matters unless the Commission so dition by the hearing officer shall be in rects. Unless otherwise ordered by the
Commission or the hearing officer, the by the Commission or by the hearing hearing shall continue pending the de- officer. It is the policy of the Commistermination of the motion or application sion that such adjournments shall be for by the Commission. Where a stay of not more than 30 days and in no event effectiveness of an order of the Com- shall a hearing officer order an adjournmission is sought, application therefor ment for a period in excess of 45 days. shall be made prior to the filing of a (Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, petition to review or, in connection with 78d-2) [29 F.R. 9488, July 11, 1964) a petition pursuant to section 15A (b) (4)
& 201.14 Evidence. of the Securities Exchange Act of 1934, at any time when a petition for review (a) Presentation and admission of eviof the disqualifying order of the Com
dence. All witnesses at a hearing for mission is not pending.
the purpose of taking evidence shall tes(d) Motions to set aside defaults. In tify under oath or affirmation, which order to prevent injustice and on such
shall be administered by the hearing officonditions as may be appropriate, the cer. Every party shall have the right to hearing officer at any time prior to the present such oral or documentary evifiling of his initial decision or the Com- dence and to conduct such cross-examimission at any time, may for good cause, nation as may be required for a full and set aside a default under $201.6(e) or
true disclosure of the facts. The hear8 201.7(e). Any motion to set aside a de- ing officer shall receive relevant and mafault shall be made within a reasonable terial evidence, rule upon offers of proof time, and shall state the reasons for the
and exclude all irrelevant, immaterial or failure to file or appear and specify the
unduly repetitious evidence. nature of the proposed defense in the (b) Subpoenas; motions to quash or proceedings.
modify; service. (1) Issuance of sub(Sec. 15A(b) (4), 52 Stat. 1070, secs. 1, 2, 76
poenas ad testificandum and subpoenas Stat. 394, 395; 15 U.S.C. 780-3, 78d-1, 78d-2)
duces tecum. The hearing officer, or in (25 F.R. 6731, July 15, 1960, as amended at the event he is unavailable, any member 27 F.R. 2399, Mar. 14, 1962; 28 F.R. 4350, of the Commission, or any other officer May 2, 1963; 29 F.R. 3567, Mar. 20, 1964; 29 designated by the Commission for the F.R. 9488, July 11, 1964]
purpose, in connection with any hearing 8 201.13 Extension of time and adjourn- ordered by the Commission, shall issue ments.
subpoenas requiring the attendance and (a) Commission or hearing officer may
testimony of witnesses and subpoenas extend, postpone or adjourn. Except as
requiring the production of documentary
or other tangible evidence at any desigotherwise provided by law, the Commis
nated place of hearing upon request sion at any time, or the hearing officer at any time prior to the filing of his ini
therefor by any party: Provided, how
ever, That, where it appears to the pertial decision or, if no initial decision is
son requested to issue the subpoena that to be filed, at any time prior to the closing of the record, for cause shown, may
the subpoena sought may be unreasonextend or shorten any time limits pre
able, oppressive, excessive in scope, or scribed by these rules for filing any
unduly burdensome, he may in his dispapers and may postpone or adjourn any
cretion, as a condition precedent to the
issuance of the subpoena, require the hearing. (b) Limitation on extensions. In no
person seeking the subpoena to show the
general relevance and reasonable scope event shall any extensions of time for filing papers granted by a hearing officer
of the testimony or other evidence
sought. In the event the person repursuant to this section exceed a total of 30 days.
quested to issue the subpoena shall after (c) Limitations on postponements and
consideration of all the circumstances
determine that the subpoena or any of adjournments. A hearing before a hear
its terms are unreasonable, oppressive, ing officer shall begin at the time and place ordered by the Commission, pro
excessive in scope, or unduly burdenvided that, within the limits provided by
some, he may refuse to issue the substatute, the hearing officer may for good
poena, or issue it only upon such condicause postpone the commencement of
tions as fairness requires. In making the hearing for not more than 30 days
the foregoing determination, where he or change the place of hearing. Any can do so without undue inconvenience convened hearing may be adjourned to to the participants in the proceeding, the such time and place as may be ordered person requested to issue the subpoena may inquire of the other participants age and discretion then residing therein; whether they will concede the facts or mailing them by registered or certisought to be proved; but in this connec- fied mail to him at his last known adtion, except with permission of the per- dress; or by any method whereby actual son seeking the subpoena, he shall not notice is given to him and the fees are disclose the identity of the person sought made available prior to the return date. to be subpoenaed. A person whose re- When the person to be served is not a quest for a subpoena has been denied or natural person, delivery of a copy of the modified may not request any other Com- subpoena and tender of the fees may be mission official to issue the subpoena; but effected by handing them to a registered he may appeal to the Commission from
agent for service, or to any officer, the denial or modification.
director, or agent in charge of any ofice (2) Motions to quash. Any person to of such person, or by mailing them by whom a subpoena is directed may, prior registered or certified mail to such repto the time specified therein for compli- resentative at his last known address; ance, but in no event more than 5 days or by any method whereby actual notice after the date of service of such sub- is given to such representative and the poena, apply to the hearing officer, or if fees are made available prior to the rehe is unavailable, to the Commission, to turn date. The provisions of this subquash or modify such subpoena, accom- paragraph (Rule 14(b) (3)) shall apply panying such application with a brief to investigations as well as hearings. statement of the reasons therefor. The (c) Witness fees and mileage. Withearing officer or the Commission, as the nesses summoned before the Commiscase may be, may deny the application, sion shall be paid the same fees and mileor upon notice to the person upon whose age that are paid to witnesses in the request the subpoena was issued, and op- courts of the United States, and witportunity for reply, may, (i) deny the nesses whose depositions are taken and application, (ii) quash or modify the sub- the persons taking the same shall sevpoena or (iii) condition denial of the ap- erally be entitled to the same fees as are plication to quash or modify the subpoena paid for like services in the courts of the upon just and reasonable conditions, in- United States. Witness fees and milecluding, in the case of a subpoena duces age shall be paid by the party at whose tecum, a requirement that the person in instance the witnesses appear. whose behalf the subpoena was issued (d) Oficial notice. In any proceedshall advance the reasonable cost of
ing official notice may be taken of any transporting documentary or other tan
material fact which might be judicially gible evidence to the designated place of noticed by a district court of the United hearing.
States, any matter in the public official (3) Service of subpoenas. Service of records of the Commission, or any mata subpoena upon a person named therein ter which is peculiarly within the knowlshall be made by delivering a copy of edge of the Commission as an expert the subpoena to such person and by body. If official notice is requested or tendering the fees for one day's attend- taken of a material fact not appearing ance and the mileage as specified by in the evidence in the record, the parties, paragraph (c) of this section (Rule
upon timely request, shall be afforded 14(c)). When the subpoena is issued an opportunity to establish the contrary. at the instance of any officer or agency (Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, of the United States, fees and mileage 78d-2) [25 F.R. 6732, July 15, 1960, as need not be tendered at the time of serv- amended at 28 F.R. 10486, Sept. 28, 1963; 29 ice. Whenever service is to be made F.R. 9488, July 11, 1964; 31 F.R. 5689, Apr. 13, upon a person who is represented in the
1966) pending proceeding by an attorney, the $201.15 Depositions and interrogaservice may be made upon the attorney. tories. Delivery of a copy of a subpoena and tender of the fees to a natural person
(a) Applications and orders for depmay be made by handing them to the
ositions. Any party desiring to take a person; or leaving them at his office with deposition shall make written applicathe person in charge thereof; or, if there
tion therefor, setting forth the reasons is no one in charge, leaving them in a
why such deposition should be taken, conspicuous place therein; or leaving the name and residence of the witness, them at his dwelling place or usual place the matters concerning which it is exof abode with some person of suitable pected to question the witness, and the
time and place proposed for the taking of the deposition. If it appears that a prospective witness may be unable to attend or may be prevented from attending a hearing, that his testimony is material and that it is necessary to take his deposition in the interest of justice, the hearing officer or the Commission, as the case may be, may in his or its discretion, issue an order which will name the witness whose deposition is to be taken, state the scope of the testimony to be taken, and specify the time when, the place where, and the designated officer before whom the witness is to testify. Such order shall be served upon the parties by the Secretary, or other duly designated oficer of the Commission, a reasonable time in advance of the time fixed for taking testimony.
(b) Testimony on depositions. Witnesses whose testimony is taken by deposition shall be sworn or shall affirm before any questions are put to them. Each question propounded shall be recorded and the answers shall be taken down in the words of the witness. Examination and cross-examination of deponents may proceed as permitted at the hearing.
(c) Objections to questions or evidence. Objections to questions or evidence shall be in short form, stating the grounds of objection relied upon, but no transcript filed by the officer shall include argument or debate. Objections to questions or evidence shall be noted by the officer upon the deposition, but he shall not have power to decide on the competency or materiality or relevance of evidence. Failure to object to questions or evidence before the officer shall not be deemed a waiver unless the ground of the objection is one which might have been obviated or removed if presented at that time.
(d) Filing of depositions. The testimony shall be reduced to writing by the officer, or under his direction, after which the deposition shall be subscribed by the witness and certified in usual form by the officer. The original deposition and exhibits shall be forwarded under seal to the Secretary of the Commission with such number of copies as may be requested by the Secretary of the Commission. Upon receipt thereof the Secretary or other duly designated officer shall file the original in the proceeding and shall forward a copy to each party or his attorney of record.
(e) Form of depositions. Such depositions shall conform to the specifications of $201.22 (e), (f) and (g), but deficiencies of form shall not invalidate the deposition if properly executed.
(f) Depositions as part of the record. At a hearing, a part or all of a deposition, so far as otherwise admissible in the proceeding, may be used if it appears: (1) That the witness is dead; (2) that the witness is out of the United States, unless it appears that the absence of the witness was procured by the party offering the deposition; (3) that the witness is unable to attend or testify because of age, sickness, infirmity or imprisonment; (4) that the party offering the deposition has been unable to procure the attendance of the witness by subpoena; or (5) upon application and notice, that such exceptional circumstances exist as to make it desirable, in the interest of justice and with due regard to the importance of presenting the testimony of witnesses orally in open hearing, to allow the deposition to be used. If only part of a deposition is offered in evidence by a party, any other party may require him to introduce all of it which is relevant to the part introduced, and any party may introduce any other parts. Any part of a deposition not received in evidence at a hearing before the Commission or a hearing oficer shall not constitute a part of the record in such proceeding, unless the parties shall so agree or the Commission so orders.
(g) Interrogatories. Depositions may also be taken and submitted on written interrogatories in substantially the same manner as depositions taken by oral examination upon application of any party as provided in paragraph (a) of this section. The interrogatories shall be filed with the application in triplicate. Within ten (10) days after service, any party may file with the Secretary his objections, if any, to such interrogatories, and may file such cross-interrogatories as he desires to submit. Such objections and cross-interrogatories shall be filed in triplicate and all other parties shall have ten (10) days after service to file their objections, if any, to such interrogatories. Objections to interrogatories or cross-interrogatories shall be settled by the hearing officer. Objections to interrogatories shall be made before the order for taking the deposi