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81. Investigations; Injunctions and Prosecution of Offenses....


(a) Commission may investigate and publish information..


(b) Witnesses, oaths, affirmations, production of records,


(o) Contumacy, refusal to obey subpena, aid of U. S. Courts and



(d) Privilege against self-incrimination..


(e) Injunctions against violations; criminal proceedings.


Writs of mandamus..

46, 129

22. Hearings by Commission...


May be public; appropriate records shall be kept...


23. Rules and Regulations; Annual Reports:

(a) Commission and Federal Reserve Board may make rules and

46, 129

(b) Annual reports to Congress by Commission and Federal Re-

serve Board shall include information, data and recommenda

tion for further legislation deemed appropriate..


24. Information Filed with the Commission.---


(a) Protection against disclosure of trade secrets in information



(b) Application for confidential treatment.


(o) Unlawful for Commission or employees to disclose or use for

personal benefit information contained in confidential applica-
tions and files.


25. Court Review of Orders...


(a) Review of Commission orders, time for filing and applications

for leave to adduce additional evidence...


(b) Effect on Commission orders of proceedings under subsection (a). 48

26. Unlawful Representations.


Unlawful to represent that action or failure to act by Commission or

Board constitutes approval or finding of truth or accuracy -


27. Jurisdiction of Offenses and Suits.


28. Effect on Existing Law..


(a) Rights and remedies are additional; recovery limited to actual

damages; jurisdiction of State Commissions.


29. Validity of Contracts...


(a) Waiver of compliance with Act or rules and regulations there-

under, or exchange rule required thereby, void..

49, 162

(b) Contracts in violation of Act or rules and regulations void as

to certain persons.

(o) Effect of loans or credit extensions or liens created innocently

in violation of Act; collection of debt or obligation or lien

made in good faith and without knowledge of violation.--- 49

80. Foreign Securities Exchanges.


(a) Circumstances under which transactions by brokers and dealers

on foreign exchanges are unlawful...


(b) Circumstances under which this title is applicable to security

transactions outside U. S..


81. Registration Fees.-


Due date of payments and amount of annual exchange fees.


82. Penalties:

(1) Wilful violations.-

50, 129

Amount of fines, terms and conditions upon which im-

prisonment may be imposed..

50, 129, 163

83. Separability of Provisions.-


Effect of invalidity of any provision or invalidity of application of such

provision to any persons or circumstances.


84. Effective Date --


Different effective dates for certain sections..



201. Amendments to Section 2 of Securities Act of 1933:

(a) Section 2 (1); security -


(b) Section 2 (4); issuer.


Section 2 (10); prospectus..


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202. Additions and amendments to Section 8 (a) of Securities Act of 1933..

Section 3 (a) (2); Government obligations exempt........

Section 3 (a) (4); eleemosynary institutions.

Additions to Section 3 (a)..

Section 3 (a) (9); securities exchanged with existing security

holders exempt.

Section 3 (a) (10); Court approval for issuance of securities in

exchange or by other official body exempt.-

Section 3 (a) (11); Intrastate exemption.

204. Amendment to Section 5 of Securities Act of 1933.

Section 5 (c) repealed..,

206. Amendment to Section 10 of Securities Act of 1933.

Section 10 (b) (1); revisions of prospectus.--

206. Amendments to Section 11 of Securities Act of 1933.-.

(a) Section 11 (a); suitsf or untrue statements or omissions..

(b) Section 11 (b) (3); defenses to action..---

(c) Section 11 (o); standard of reasonableness for determining lla-


(d) Section 11 (e); amount of recovery-
207. Amendment to Section 13 of Securities Act of 1933.

Amendment of limitation of time for bringing suits-

208. Amendment to Section 15 of Securities Act of 1933.

Defense to suit against controlling persons.
209. Amendments to Section 19 of Securities Act of 1933.

(a) Section 19 (a) amended:

(1) Addition of word "technical” in first sentence.--

(2) Addition at end of section of a provision regarding acts

done in good faith..

210. Securities and Exchange Commission to perform functions of Federal

Trade Commission under Securities Act of 1933..

811. Securities and Exchange Commission authorized and directed to

study, investigate and report on work, activities, personnel and

functions of protective and reorganization committees..

(Extract from)

Public, No. 255—74th Cong., Approved, August 9, 1935

214. Amendment to Section 20a of Part I of the Interstate Commerce Act,

as amended..

Amendment of Section 8 (a) (6) of the Seourities Act of 1933.....

Public, No. 333–74th Cong., Public Utility Act of 1935, Approved

August 26, 1935


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Same Territory

9. Acquisition of Securities and Utility Assets and Other Interests...



ment in such form as the Commission may prescribe, containing the agreements, setting forth the information, and accompanied by the documents, below specified:

(1) An agreement (which shall not be construed as a waiver of any constitutional right or any right to contest the validity of any rule or regulation) to comply, and to enforce so far as is within its powers compliance by its members, with the provisions of this title, and any amendment thereto and any rule or regulation made or to be made thereunder:

(2) Such data as to its organization, rules of procedure, and membership, and such other information as the Commission may by rules and regulations require as being necessary or appropriate in the public interest or for the protection of investors;

(3) Copies of its constitution, articles of incorporation with all amendments thereto, and of its existing bylaws or rules or instruments corresponding thereto, whatever the name, which are hereinafter collectively referred to as the “ rules of the exchange"; and

(4) An agreement to furnish to the Commission copies of any amendments to the rules of the exchange forth with upon their adoption.

(b) No registration shall be granted or remain in force unless the rules of the exchange include provision for the expulsion, suspension, or disciplining of a member for conduct or proceeding inconsistent with just and equitable principles of trade, and declare that the willful violation of any provisions of this title or any rule or regulation thereunder shall be considered conduct or proceeding inconsistent with just and equitable principles of trade.

(c) Nothing in this title shall be construed to prevent any exchange from adopting and enforcing any rule not inconsistent with this title and the rules and regulations thereunder and the applicable laws of the State in which it is located.

(d) If it appears to the Commission that the exchange applying for registration is so organized as to be able to comply with the provisions of this title and the rules and regulations thereunder and that the rules of the exchange are just and adequate to insure fair dealing and to protect investors, the Commission shall cause such exchange to be registered as a national securities exchange.

(e) Within thirty days after the filing of the application, the Commission shall enter an order either granting or, after appropriate notice and opportunity for hearing, denying registration as a national securities exchange, unless the exchange applying for registration shall withdraw its application or consent to the Commission's deferring action on its application for a stated longer period after the date of filing. The filing with the Commission of an application for registration by an exchange shall be deemed to have taken place upon the receipt thereof. Amendments to an application may be made upon such terms as the Commission may prescribe.

(f) An exchange may, upon appropriate application in accordance with the rules and regulations of the Commission, and upon such terms as the Commission may deem necessary for the protection of investors, withdraw its registration.


Sec. 7. (a) For the purpose of preventing the excessive use of credit for the purchase or carrying of securities, the Federal Reserve Board shall, prior to the effective date of this section and from time to time thereafter, prescribe rules and regulations with respect to the amount of credit that may be initially extended and subsequently maintained on any security (other than an exempted security) regis. tered on a national securities exchange. For the initial extension of credit, such rules and regulations shall be based upon the following standard: An amount not greater than whichever is the higher of

(1) 55 per centum of the current market price of the security, or

(2) 100 per centum of the lowest market price of the security during the preceding thirty-six calendar months, but not more

than 75 per centum of the current market price. Such rules and regulations may make appropriate provision with respect to the carrying of undermargined accounts for limited periods and under specified conditions; the withdrawal of funds or securities; the substitution or additional purchases of securities; the transfer of accounts from one lender to another; special or different margin requirements for delayed deliveries, short sales, arbitrage transactions, and securities to which paragraph (2) of this subsection does not apply; the bases and the methods to be used in calculating loans, and margins and market prices; and similar administrative adjustments and details. For the purposes of paragraph (2) of this subsection, until July 1, 1936, the lowest price at which a security has sold on or after July 1, 1933, shall be considered as the lowest price at which such security has sold during the preceding thirty-six calendar months.

(b) Notwithstanding the provisions of subsection (a) of this section, the Federal Reserve Board, may, from time to time, with respect to all or specified securities or transactions, or classes of securities, or classes of transactions, by such rules and regulations (1) prescribe such lower margin requirements for the initial extension or maintenance of credit as it deems necessary or appropriate for the accommodation of commerce and industry, having due regard to the general credit situation of the country, and (2) prescribe such higher margin requirements for the initial extension or maintenance of credit as it may deem necessary or appropriate to prevent the excessive use of credit to finance transactions in securities.

(c) It shall be unlawful for any member of a national securities exchange or any broker or dealer who transacts a business in securities through the medium of any such member, directly or indirectly to extend or maintain credit or arrange for the extension or maintenance of credit to or for any customer

(1) On any security (other than an exempted security) registered on a national securities exchange, in contravention of the rules and regulations which the Federal Reserve Board shall prescribe under subsections (a) and (b) of this section.

(2) Without collateral or on any collateral other than exempted securities and/or securities registered upon a national securities exchange, except in accordance with such rules and regulations as

(Extract from)
Publlo, No. 696—75th Cong., Chapter 5763d Sesa

Approved, June 22, 1938

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