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7. The term “issuer" means any person who issues or proposes to issue any security or who guarantees a security either as to principal or income; except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates, or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functions) or of the fixed, restricted management, or unit type, the term “issuer” means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which such securities are issued; and except that with respect to equipment-trust certificates or like securities, the term “issuer” means the person by whom the equipment or property is or is to be used.

8. The term "customer' means any person for whose account a broker or dealer effects any transaction in any security, or from whom a broker or dealer solicits such business, or to whom a broker or dealer extends credit on any security.

9. The term “person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, any unincorporated organization or exchange. As used in this paragraph the term “trust" shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by & security.

10. The term "security" means any note, stock, treasury stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement, oil, gas, and other mineral royalties and deeds, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, votingtrust certificate, or in general, any instrument commonly known as a "security or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing, but the term "security" as used in this Act shall not include any direct obligation guaranteed as to principal or interest by the United States.

11. The terms "buy" and "purchase" each include any contract to buy, purchase, or otherwise acquire, contract of purchase, attempt or offer to acquire or solicitation of an offer to sell a security or any interest in a security.

12. The terms "sale" and "sell” each include any contract of sale or disposition of, contract to sell or dispose of, attempt or offer to dispose of, or solicitation of an offer to buy a security or any interest therein.

13. The term communication means communication of any kind or description including written, oral, radiographic, radiophonic, telegraphic, or telephonic, or by ticker, television, or cablegram.

14. The term “Commission" means the Federal Trade Commission.

15. The term “State" means any State of the United States, the District of Columbia, Alaska, Hawaii, Puerto Rico, the Philippine Islands, Canal Zone, the Virgin Islands, and the insular possessions of the United States.

16. The term "interstate commerce" means trade or commerce in securities or any transportation or communication relating thereto among the several States or between any foreign country and any State, or between any State and any place or ship outside the United States.

For the purpose of this Act (but not in anywise limiting the definition of interstate commerce) a transaction in respect of any security shall be considered to be in interstate commerce if such transaction is part of that current of commeree usual in a security transaction whereby an order to purchase or to sell a security originates from a person in one State with the expectation that it will or may be consummated by the receipt on an exchange of an order to sell or purchase the same security originating from another person in another State, including, in addition to cases within the above general description, all cases where it is contemplated that a purchase or sale of any security will be preceded or followed by the shipment of such security from another State. Any security transaction normally in such current of commerce shall not be considered out of such commerce through resort being had to any means or device intended to remove the transaction from the provisions of this Act.

PROHIBITION OF THE USE OF CHANNELS OF INTERSTATE COMMERCE AND THE MAILS

TO UNREGISTERED EXCHANGES Sec. 4. Unless an exchange is registered as a national securities exchange under section 5 of this Act, it shall be unlawful for any person, directly or indirectly, to make use of the mails or any means or instrumentality of communication or transportation in interstate commerce for the purpose of using any facility of such exchange to effect any transaction in a security or to report any such transaction.

REGISTRATION OF NATIONAL SECURITIES EXCHANGES Sec. 5. (a) Any exchange may be registered with the Commission as a national securities exchange under terms and conditions hereafter provided by filing a registration statement in such form as the Commission may prescribe containing the undertakings, setting forth the information, and accompanied by the documents herebelow set forth:

(1) An undertaking to comply with, and to enforce so far as is within its powers compliance by its members and by issuers whose securities are registered thereon with any provision of this Act and any amendment thereto and any rule or regulation made or to be made by the Commission thereunder.

(2) Such data as to its organization, rules of procedure and membership, and 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.”

(4) An undertaking to furnish to the Commission copies of any amendments the documents or instruments mentioned in clause (3) of this subsection forthwith upon their adoption.

(b) 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 act and the rules and regulations made by the Commission thereunder and that the rules of the exchange are just and adequate to ensure fair dealing and to protect investors, the Commission shall cause such exchange to be registered as a national securities exchange.

(c) The Commission shall enter an order either granting or, after appropriate notice and opportunity for hearing, denying an application for registration as a national securities exchange within thirty days after the filing of the application, 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 its 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.

(d) No registration shall be granted unless the rules of the exchange provide for the expulsion and suspension of a member for conduct or proceeding inconsistent with just and equitable principles of trade and declare that the violation of any provisions of this Act or any rule or regulation made by the Commission thereunder shall be considered conduct or proceeding inconsistent with just and equitable principles of trade.

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

(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 fix, withdraw its registration.

MARGIN REQUIREMENTS ON LONG ACCOUNTS Sec. 6. (a) It shall be unlawful for any member of a national securities exchange or any person 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 on any securities not registered upon a national securities exchange.

(b) It shall be unlawful for any member of a national securities exchange or any person 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 on any securities registered on a national securities exchange in an amount exceeding at any time which ever is the higher of (1) 80 per centum of the lowest price at which such security has sold during the preceding three years; or (2) 40 per centum of the current market price. The Commission may by rules and regulations prescribe lower loan values as may be deemed appropriate in the public interest or for the pro

tection of investors during any stated period of time or in respect of any specified class of securities.

(c) It shall be unlawful for any person to extend or maintain credit or arrange for the extension or maintenance of credit to any person (other than to a dealer to aid in the financing of the distribution of securities to customers not through the medium of an exchange) upon any security registered on a national securities exchange in an amount exceeding the amount which it is lawful for a member of a national securities exchange to lend to any customer on such security, unless the application for the loan is accompanied by a statement by the borrower that such security has been acquired by the borrower and paid for in full more than thirty days prior to the making of the loan. Any person who for the purpose of obtaining a loan makes such a statement which is false in any material respect, shall be deemed guilty of a violation of this subsection.

(d) The Commission shall by rules and regulations prescribe the times at and the specific methods by which values shall be calculated for the purposes of this section, the time within which initial and subsequent payments shall be made by the customer, and the notice to be given and the method to be followed in closing out accounts, and no person who shall comply with such rules and regulations shall be deemed to have violated any provision of this section.

RESTRICTIONS OF MEMBERS' BORROWING

Sec. 7. It shall be unlawful for any member of a national securities exchange or person who transacts a business in securities through the medium of such member, directly or indirectly

(a) To borrow on any security registered on a national securities exchange from any person other than a member bank of the Federal Reserve System;

(b) To permit the aggregate indebtedness of such member or person to all other persons, including customers' deposits, to exceed such percentage of the net current assets owned by the borrower and employed in the business not exceeding 1,000 per centum as the Commission may by rules and regulations prescribe;

(c) To use, if a broker, the capital employed in the business to carry or finance the carrying of securities for himself or for others than bona fide customers excluding any partner or employee of such broker;

(d) To hypothecate or arrange for the hypothecation of more of any securities carried for the account of a customer than is fair and reasonable in view of the indebtedness of such customer;

(e) To hypothecate or arrange for the hypothecation of any securities carried for the account of a customer under circumstances that will permit the comingling of the securities of one customer with those of any other person, without the written consent of such customer;

() To lend or arrange for the lending of securities pledged by or carried for the account of any customer without the consent of such customer and without crediting the interest received on account of such lending to the account of the customer.

PROHIBITION AGAINST MANIPULATION OF SECURITY PRICES

Sec. 8. (a) It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange

(1) To effect any fictitious transaction in any security registered on a national securities exchange, or any transaction which purports to be a sale of any such security but involves no change in the beneficial ownership thereof;

(2) To effect, or to authorize another or others to effect for such person's account, transactions for the purchase and sale of any security registered on a national securities exchange at substantially the same time at substantially the same price, whether such transactions of purchase and sale be with the same or with different parties; except transactions made on the exchange as a matter of record only and appropriately recorded and reported as an “arranged transaction";

(3) To effect, either alone or in concert with one or more other persons, transactions for the purchase and sale of any security or securities registered on any national securities exchange for the purpose of raising or depressing the price of such security or securities or for the purpose of creating or with the expectation that there will be created a false or misleading appearance of active trading in such security or securities, or a false or misleading appearance in respect of the market for such security or securities;

(4) If a dealer, broker, or member or a person in the employ of a dealer, broker, or member, to circulate or disseminate in the ordinary course of business information to the effect that the price of any security or securities registered on a national securities exchange will or is likely to rise or fall partly or wholly because of the market activity of any one or more persons, if the person disseminating such information has reason to believe that the circulation or dissemination of such information on his part may induce the purchase or sale of any such security in the expectation of such market activity;

(5) To Circulate or disseminate information regarding any security registered on a national securities exchange which statement is, in the light of the circumstances under which it was made, false or misleading in respect of any matter sufficiently important to influence the judgment of an average investor, if the person disseminiating such information has reason to believe that the circulation or dissemination of such information on his part may induce the purchase or sale of such security, and does not prove that he acted in good faith and in the exercise of reasonable care had no ground to believe that the statement was false or misleading;

(6) To pay or cause to be paid directly or indirectly any consideration or anything of value to any person to circulate, disseminate, or finance the cost of circulating and disseminating, information to the effect that the price of any security or securities registered on a national securities exchange will or is likely to rise or fall partly or wholly because of the market activity of any one or more persons;

(7) To engage in any series of transactions or in any operation for the purchase and sale of any security registered on a national securities exchange which has the purpose or effect of pegging, fixing, or stabilizing the price of such security without having prior thereto reported to the exchange authorities and to the Commission such information regarding the purpose and nature of such transactions or operations, the details thereof and the person or persons interested therein as the Commission by rules and regulations may prescribe as appropriate or necessary in the public interest or for the protection of investors;

(8) To acquire substantial control of the floating supply of any security registered on a national securities exchange for the purpose of causing the price of such security to rise on the exchange because of such control of the floating supply;

(9) To effect by use of the facility of any national securities exchange

(i) any transaction in any security whereby any party to such transaction acquires any put, call, straddle, or other option or privilege of buying a security from or selling a security to another party to the transaction without being bound to do so; or

(ii) any transaction in any security with relation to which he has, directly or indirectly, any interest in such put, call, straddle, option, or privilege; or

(iii) any transaction in any security for account of any person who, he has reason to believe, has, directly or indirectly, any interest in any such put, call, straddle, option, or privilege with relation to such security; or if a member, directly or indirectly, to have or guarantee any interest in any put, call, straddle, option, or privilege in relation to any security registered on a national securities exchange.

(b) Any person who participates in any act or transaction in violation of subsection (a) of this section shall be liable to any person who shall purchase any security, the price of which may have been effected by such act or transaction, and the person so injured may sue in law or equity in any court of competent jurisdiction to recover the difference between the price he paid for such security and the lowest price for which such security shall have sold on the exchange during the ninety days preceding and the ninety days following such purchase, and such additional damages, if any, as the person suing may prove that he sustained as a result of any such transaction.

(c) Any person who participates in a transaction or transactions in violation of subsection (a) of this section shall be liable to any person who shall have sold a security, the price of which may have been effected by such transaction or transactions, and the persons so injured may sue in law or equity in any court of competent jurisdiction to recover the difference between the price for which he sold such security and the highest price for which such security shall have sold on the exchange during the ninety days preceding and the ninety days following such sale, and such additional damages, if any, as the person suing may prove that he sustained as a result of any such transaction.

(d) Every person who becomes liable to make any payment under this section may recover contribution as in cases of contract from any person who, if sued separately, would have been liable to make the same payment, unless the person who has become liable was, and the other was not, guilty of fraudulent misrepresentation.

(3) No action shall be maintained to enforce any liability created under this section unless brought within two years after the discovery of the violation upon. which it is based.

REGULATION OF THE USE OF MANIPULATIVE DEVICES Sec. 9. It shall be unlawful for any person, directly or indirectly, by use of any means or instrumentality of interstate commerce or of the mails or of any facility of any national securities exchange

(a) To effect the sale of any security registered on a national securities exchange, which at the time of such sale was not owned by such person or his principal except in accordance with such rules and regulations as the Commission may prescribe as appropriate or necessary in the public interest or for the protection of investors;

(b) To use or employ or to execute or accept for execution any stop-loss order in connection with the purchase or sale of any security registered on a national securities exchange except in accordance with such rules and regulations as the Commission shall prescribe as appropriate or necessary in the public interest or for the protection of investors;

(c) To use or employ in connection with the purchase or sale of any security registered on a national securities exchange any device or contrivance which, or any device or contrivance in a way or manner which the Commission may by its rules and regulations find detrimental to the public interest or to the proper protection of investors. SEGREGATION AND LIMITATION OF THE FUNCTIONS OF BROKER, SPECIALIST, AND

DEALER

Sec. 10. It shall be unlawful for any member of a national securities exchange or any person who as a broker transacts a business in securities through the medium of any such member to act as a dealer in or underwriter of securities, whether or not registered on any national securities exchange. It shall be unlawful for any member of a national securities exchange to act as a specialist unless registered as such with the exchange, subject to such rules and regulations as the Commission may prescribe, and it shall be unlawful for any specialist on a national securities exchange (a) to effect on the exchange any transaction except on fixed price orders or (b) to disclose to any other person information in regard to orders placed with him which is not available to all members of the exchange. An exchange may provide that officers or employees of the exchange may perform the functions of specialists subject to such rules and regulations as the Commission may prescribe.

REGISTRATION REQUIREMENTS FOR SECURITIES Sec. 11. (a) It shall be unlawful for any person to effect any transaction in any security on a national securities exchange unless a registration is effective as to such security in accordance with the provisions of this act and the rules and regulations made by the Commission thereunder and unless such security has been issued.

(b) A security may be registered with a national securities exchange upon application by the issuer, by filing with such exchange and with the Commission such undertakings, information, and documents as the Commission may by its rules and regulations require in the public interest and for the protection of investors together with such additional undertakings, information, and documents as the exchange may require. If the exchange authorities certify to the Commission that the security has been approved by the exchange for listing and registration, the registration shall become effective thirty days after the filing of such certification with the Commission: Provided, That if it appears to the Commission prior to the expiration of such thirty days that the application for registration does not comply with the provisions of this Act or the rules and regulations made by the Commission hereunder, it may, after appropriate notice and opportunity for hearing within such period, enter an order denying the application for registration unless the issuer shall withdraw its application or consent to the Commission's deferring action on its application for a stated period longer than such thirty days.

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