Although the SEC is given broad regulatory jurisdiction over the components and operations of a national market system, this bill is not intended to turn the Commission into a Comsat. It does not have independent power or the means to create a new market system. Initiative for the development of the national market system must come from the private sector. The SEC's role under this bill is to assure that the market operates in a fair and orderly manner and that unnecessary burdens to competition do not restrain its natural economic evolution. The second objective of S. 2519 is to strengthen and improve the SECs oversight of self-regulatory organizations. In its Securities Industry Study Report, our subcommittee identified a number of weaknesses in the self-regulatory structure, weaknesses not so much in the concept of self-regulation as in its operation and oversight. This bill attempts to correct these weaknesses in a manner that will serve and strengthen self-regulation. It will make self-regulation more attuned to the needs of the emerging market system, and will insure that its deliberations and actions conform to our expanding notions of due process. Three days of hearings on S. 2519 are scheduled for this week. And it is my hope that we will have an indepth, specific exploration of the many proposals embodied in this legislation. Following this consideration, I look forward to prompt legislative action. Before we introduce our first witness, let me insert a copy of S. 2519 into the record at this point. [The bill follows:] 93D CONGRESS 1ST SESSION S. 2519 IN THE SENATE OF THE UNITED STATES OCTOBER 2, 1973 Mr. WILLIAMS (for himself, Mr. BIDEN, and Mr. BROOKE) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing and Urban Affairs A BILL To amend the Securities Exchange Act of 1934 to facilitate the development of a national market system, to provide for regulation of securities information processors, to remove unnecessary burdens on competition, to strengthen and improve the Securities and Exchange Commission's oversight of self-regulatory organizations, and for other purposes. Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "National Securities 4 Market System Act of 1973". 5 SECTION 1. Section 2 of the Securities Exchange Act of 6 1934 (15 U.S.C. 78b) is amended by striking the word 7 "and" immediately before the phrase "to impose require II Although the SEC is given broad regulatory jurisdiction over the components and operations of a national market system, this bill is not intended to turn the Commission into a Comsat. It does not have independent power or the means to create a new market system. Initiative for the development of the national market system must come from the private sector. The SEC's role under this bill is to assure that the market operates in a fair and orderly manner and that unnecessary burdens to competition do not restrain its natural economic evolution. The second objective of S. 2519 is to strengthen and improve the SECS oversight of self-regulatory organizations. In its Securities Industry Study Report, our subcommittee identified a number of weaknesses in the self-regulatory structure, weaknesses not so much in the concept of self-regulation as in its operation and oversight. This bill attempts to correct these weaknesses in a manner that will serve and strengthen self-regulation. It will make self-regulation more attuned to the needs of the emerging market system, and will insure that its deliberations and actions conform to our expanding notions of due process. Three days of hearings on S. 2519 are scheduled for this week. And it is my hope that we will have an indepth, specific exploration of the many proposals embodied in this legislation. Following this consideration, I look forward to prompt legislative action. Before we introduce our first witness, let me insert a copy of S. 2519 into the record at this point. [The bill follows:] 93D CONGRESS 1ST SESSION S. 2519 IN THE SENATE OF THE UNITED STATES OCTOBER 2, 1973 Mr. WILLIAMS (for himself, Mr. BIDEN, and Mr. BROOKE) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing and Urban Affairs A BILL To amend the Securities Exchange Act of 1934 to facilitate the development of a national market system, to provide for regulation of securities information processors, to remove unnecessary burdens on competition, to strengthen and improve the Securities and Exchange Commission's oversight of self-regulatory organizations, and for other purposes. Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "National Securities 4 Market System Act of 1973”. 5 SECTION 1. Section 2 of the Securities Exchange Act of 6 1934 (15 U.S.C. 78b) is amended by striking the word 7 "and" immediately before the phrase "to impose require II 2 1 ments necessary to make such regulation and control reason2 ably complete and effective," and by adding the following 3 immediately after that phrase: "and to remove impediments 4 to and perfect the mechanism of a national market system for 5 securities,". 6 SEC. 2. Section 3 (a) (3) of the Securities Exchange 7 Act of 1934 (15 U.S.C. 78c (a) (3)) is amended to read as follows: 8 9 "(3) The term 'member' when used with respect to an 10 exchange or a registered securities association means any 11 broker or dealer who agrees to be regulated by an exchange 12 or association and with respect to whom the exchange or 13 association undertakes to enforce compliance with its rules 14 and with the provisions of this title, and any amendment 15 thereto, and any rule or regulation made or to be made there16 under." 17 SEC. 3. Section 3 (a) (21) of the Securities Exchange 18 Act of 1934 (15 U.S.C. 78c (a) (21)) is amended to read 19 20 21 222 as follows: "(21) The term 'person associated with a member' means a person who is registered with a registered secu 22 rities association or national securities exchange pursuant to 23 its rules or who is associated with a broker or dealer which 24 is a member of such association or such exchange." |