ARTICLE X. REGISTRATION OF INVESTMENT BANKERS

SECTION 1. Registration agreement.-Each investment banker who registers under this article thereby agrees with every other investment banker who registers under this article to comply with all decisions and interpretative rulings of the investment bankers code committee under any provisions of this article, and to comply with the rules.

For any failure to so comply the registered investment banker who is guilty of such failure shall be subject to the penalties prescribed in section 8 of this article X, but such failure shall not, in itself, give rise to any civil liability to any other registered investment banker or to any other person.

SEC. 2. Eligibility for registration. Any investment banker who is actually engaged in the investment banking business in the United States shall be eligible to be registered under this article.

If the principal office of any such person is located in a foreign country, any branch office in the United States may be designated as a principal office for the purposes of this article.

SEC. 3. Application for registration. Any investment banker desiring to be registered, shall file with the regional code committee of the district in which the principal office of the applicant is located, a statement in writing, in duplicate, stating: (a) The name of the applicant; (b) the address of the principal office and of all branch offices of the applicant; (c) if the applicant be a partnership, the names, addresses, and business addresses of the partners, including special or limited partners, specifying as to each whether he is a general or limited partner; (d) if the applicant is other than an individual or partnership, the name of the State or country where the applicant is incorporated or organized, and the names, residences, and business addresses of its directors and principal officers and of each stockholder owning more than 10 per cent of any class of the capital stock of such applicant; (e) the length of time the applicant or its predecessors have been engaged in the investment banking business.

SEC. 4. Supplementary statements. In the event that any change shall take place in the personnel of the partners, directors, principal officers, or stockholders of any registered investment banker with respect to whom information is required by the provisions of section 3 of this article to be given, such investment banker shall, within 30 days after such change has occurred, file with the regional code committee of the district in which the principal office of such investment banker is located, a supplemental statement in writing, in duplicate, setting forth all such changes in personnel, and the information required by paragraphs (c) and (d) of section 3 of this article with respect to any such new partner, director, or principal officer.

SEC. 5. Action on applications by regional code committee.-Upon the receipt of any application for registration the regional code committee shall cause such investigation to be made as such committee may deem necessary and proper to determine if such applicant is actually engaged in the investment banking business, and if the facts stated in such application are true and complete; and said committee shall, if requested by the applicant, give the applicant a hearing thereon. As soon as may be practicable thereafter, such committee shall forward one copy of such application to the investment bankers code committee with a certificate of the action of such regional code committee with relation thereto. SEC. 6. Action on applications by investment bankers code committee.-Upon receipt of any application for registration by the investment bankers code committee, as provided in section 5 of this article, the investment bankers code committee shall, if satisfied that the applicant is eligible to be registered in accordance with the requirements of section 2 of this article, and that no untrue statement has been made in the application, register such applicant as a registered investment banker under this article. The said committee shall, at the request of the applicant, give the applicant a hearing thereon, at which hearing the applicant shall be entitled to be heard in person and by counsel, and to submit any matters which he may desire to present.

SEC. 7. Complaints.-Every registered investment banker shall keep in each office maintained by him a copy of the code and of the rules and of all amendments from time to time made thereto, and of interpretative rulings made by the investment bankers code committee and approved by the administrator, which shall be available for the examination of any customer who makes request therefor. Any person feeling aggrieved by any act of any registered investment banker registered under this article may complain in regard thereto to any regional code committee. If such regional code committee is in a district other than the district where the principal office of such investment banker shall be located, such

committee shall make such preliminary investigation in regard to the complaint as may be practicable and shall forward the complaint and the findings of such committee to the regional code committee of the district in which is located the principal office of the investment banker against whom the complaint is made, which latter committee shall thereupon proceed to investigate the matter and to conduct such hearings in regard thereto as it may deem necessary and proper. When any complaint is filed against any registered investment banker with any regional code committee of the district in which the principal office of such investment banker is located, or when any complaint is forwarded to such committee from any other regional code committee, notice shall be given in writing to the investment banker complained against, specifying the nature of the charges and fixing a date for a hearing. Such committee may make such investigations in regard to the matter as it may deem necessary and proper, provided any investment banker who is involved in such charges shall be entitled to be heard in person and by counsel, and to submit any matters which he may desire to present.

If any regional code committee of the district in which the principal office of any registered investment banker complained against is located shall determine that there has been a violation of the code or of these rules or of any amendment thereto, or of any interpretative ruling made by the investment bankers' code committee and approved by the administrator, such committee shall transmit a report of its findings and the evidence adduced, together with its recommendations to the investment bankers code committee for action by that committee in regard to the matter.

If any registered investment banker complained against shall so request, the investment bankers' code committee shall grant such investment banker a hearing at which hearing such investment banker shall be entitled to be heard in person and by counsel, and to submit any matters which he may desire to present. For the purpose of investigating complaints against registered investment bankers, the investment bankers code committee, and any agency authorized by it, shall have the right to require the investment banker to submit a report in writing in regard to the matter involved in the complaint, and such committee shall have the right to inspect the books, records, and accounts of such investment banker with relation to the matters involved in the complaint. Any refusal on the part of any registered investment banker to make any report as called for under this section, or to permit an inspection of books, records, and accounts, as may be validly called for under this section, shall be sufficient cause for suspending or canceling the registration of such investment banker.

SEC. 8. Penalties.-The investment bankers code committee, in the administration and enforcement of this Article, may prescribe penalties not in excess of $500.00 for each violation, against any registered investment banker for any violation of the rules or for any neglect or refusal to comply with orders, directions, or decisions of the investment bankers code committee for the enforcement of the rules, including interpretative rulings made by said committee and approved by the Administrator, or suspend the registration of such investment banker for a definite period, or cancel the registration of such investment banker, as such committee may, in its discretion, deem to be just.

In any case where the investment bankers code committee shall impose any fine against any registered investment banker or shall suspend or cancel the registration of any registered investment banker, the registered investment banker against whom such fine is imposed or whose registration shall be suspended or canceled shall have the right to appeal to the administrator for a review of the facts upon which the action of the investment bankers code committee was based in the matter of the imposition of such fine or the suspension or cancelation of such registration, and the administrator shall have the right to review the facts as found by the investment bankers code committee, and to take further evidence, if he deems necessary, and the administrator may modify, affirm, or set aside the action of the investment bankers code committee in respect of such fine, suspension, or cancelation of registration.

SEC. 9. Procedure.-The investment bankers code committee shall determine the manner and form of its proceedings to be conducted under this article, and may consider and take action upon any matter at any regular meeting or at any special meeting, and in holding any hearing or conducting any investigation under this article said committee may act by one or more duly designated members, but in such event a report of the facts as found shall be submitted to a meeting of the full committee for its final action.

No member of any regional code committee or of the investment bankers code committee shall in any manner, directly or indirectly, participate in the deter

mination of any question affecting his personal interests, or the interest of any person in whom he is directly or indirectly interested.

SEC. 10. Powers.-The investment bankers code committee shall be vested with all the powers necessary and appropriate to carry out the provisions of this article, and it may adopt such rules, issue such orders and directions, and make such decisions as it shall deem proper and appropriate therefor.

SEC. 11. Interpretative rulings.—The investment bankers code committee may, from time to time, present to the administrator proposed interpretative rulings based on the rules, which rulings shall be made in the light of the general principles set out in article III hereof, and said committee is hereby authorized to give a liberal interpretation of the rules, according to the spirit and intent thereof, in order to effectuate the policy and purposes of this article. Such interpretative rulings shall, upon approval by the administrator, become operative as part of the rules applicable to registered investment bankers as provided in section 1 of this article X.

SEC. 12. The list.-The investment bankers code committee shall furnish to each registered investment banker a list of all registered investment bankers and of all suspensions and cancelations of registrants.

Any registered investment banker may, at any time, withdraw from such registration and by so doing relieve himself of any further obligation as a registered investment banker upon giving notice in writing to the regional code committee of the district in which his principal office is located and to the investment bankers code committee of his desire to so withdraw and upon paying any amounts due from him.

SEC. 13. Expenses of committee.-Every registered investment banker agrees to make to the investment bankers code committee from time to time contributions to defray the expenses of the administration and enforcement of the code and the rules in the same manner provided in section 6 of article III of the code.

ARTICLE XI. ADMINISTRATION

SECTION 1. Statistics. In order to provide statistical information regarding investment conditions from time to time, the investment bankers code committee is hereby authorized, within its discretion, to select a confidential agency to obtain from all investment bankers certified reports of such character and in such form as the investment bankers code committee may prescribe. Such confiden tial agency shall be in no way engaged in the investment banking business or interested in or connected with any investment banker. All such information so received shall be held as secret and confidential between such confidential agency and the reporting investment banker.

Such confidential agency shall analyze and digest the reports, and shall disclose to the investment bankers code committee only the general findings, which shall be available to all investment bankers who assent to the code and to all registered investment bankers.

SEC. 2. Regional code committees.-(a) Local districts.-In order to facilitate the administration and enforcement of the code and rules, local districts are hereby established the boundaries of which districts shall be as set forth in schedule A appended hereto. The investment bankers code committee may, from time to time, relocate such boundaries, and may increase or decrease the number of such districts.

(b) Regional code committees.-In each district established as provided in paragraph (a) of this section there shall be organized a regional code committee to consist of 7 members each in the case of the New York district and of the Central States district, and of 5 members in the case of any other district to be appointed by the investment bankers code committee. Four members of each regional code committee for the New York district and Central States district shall be named to represent investment bankers located in the district in which said committee is organized who are members of the Investment Bankers Associa tion of America, and three members of each said committee shall be named to represent investment bankers located in each said district who are not members of said association. Three members of each regional code committee for any district other than the New York district and the Central States district shall be named to represent investment bankers located in the district in which said committee is organized who are members of the Investment Bankers Association of America, and two members of said committee shall be named to represent investment bankers located in said district who are not members of said association. Each person appointed to any such committee shall be actually engaged or employed in the investment banking business at the time of his appointment, and

shall (1) if named to represent investment bankers who are members of the Investment Bankers Association of America, be a person selected from amongst investment bankers assenting to the code located in the district for which the appointment is made who are members of said association; and (2) if named to represent investment bankers who are not members of the Investment Bankers Association of America, be selected from amongst investment bankers assenting to the code located in this district for which the appointment is made who are not members of said association. Any vacancy occurring in the membership of any regional code committee shall be filled by appointment made by the investment bankers code committee in the same manner as original appointments are herein authorized to be made.

The regional code committees shall report all of their actions to and shall at all times and in all matters be answerable to the investment bankers code committee.

SEC. 3. General duties.-Such regional code committees shall act as agencies of the investment bankers code committee for the administration and enforcement of the code and the rules in their respective districts.

SEC. 4. Expenses.-Members of such regional code committees shall serve without pay. Funds to meet the necessary and actual expenses of each such regional committee for administering this code will be provided by the investment bankers code committee out of the funds collected by said committee under the provisions of section 6 of article III of the code and section 13 of article X hereof, but all such expenses shall be subject to approval by the investment bankers code committee. Any such regional code committee may be authorized to raise additional funds for such expenses in accordance with regulations prescribed by the investment bankers code committee with the approval of the Administrator.

SEC. 5. Additional local rules. Any such regional code committee may, from time to time, propose additions to the general rules of fair practice herein provided, as may be deemed desirable for such district and are not inconsistent with the provisions of the code or of the rules. Any such additional rules of fair practice shall be submitted to a vote of all investment bankers located in such district who have assented to the code, and if approved by a majority of those voting, shall be submitted to the investment bankers code committee and upon approval thereof by the investment bankers code committee and by the Administrator, such additional rules shall become effective in said district.

SEC. 6. Modification of additional local rules.—Any such regional code committee may, from time to time, propose a modification of any addition to the rules of fair practice for its district, or of any portion of such additional rules, and upon approval of any such proposed modification by the investment bankers code committee and by the Administrators, such modification shall become effective in said district.

SEC. 7. Cancelation of local rules. The investment bankers code committee, with the approval of the Administrator, may at any time, and from time to time, cancel any addition to the rules of fair practice for any district, or any portion of any such additional rule.

SEC. 8. Investigations.—Each regional code committee may, of its own volition, and shall, at the request of the investment bankers code committee, investigate any matter pertaining to an alleged violation of the provisions of the code, or of any rule of fair practice effective in said district. In making any such investigation such regional code committee shall act as a fact-finding body, and in any case where in the opinion of said committee a violation has occurred, such committee shall report its findings of fact, together with its recommendations, to the investment bankers code committee. In any instances where the investment bankers code committee shall direct any regional code committee to make any investigation, as provided in this section 8, it shall be the duty of the investment bankers code committee to provide or make provision for the expenses of such investigation in accordance with the requirements of section 4 of this article.

SEC. 9. Privileged communications. All communications addressed either to the investment bankers code committee or to any regional code committee, with respect to or involving any complaint of a possible violation of the code or rules shall be deemed to be a privileged communication, and the name of the writer of such communication shall not be disclosed by any such committee.

SEC. 10. Waiver of rules. Any rule contained in these supplementary provisions or hereafter established pursuant to these supplementary provisions may be waived in whole or in part, in any particular case, by the investment bankers code committee, in the manner provided in this section 10. Any investment banker desiring to secure such waiver in any particular case shall make written application therefor to the investment bankers code committee, which committee

shall consider such application at its next meeting. If a majority of all the members of the committee shall determine that such waiver will not permit any unfair trade practice, and will not be detrimental to the public interest, the committee with the approval of the Administrator shall advise the applicant investment banker in writing to that effect, and upon receipt of such advice such waiver shall become effective, with respect to the particular transaction, to the extent provided therein.

SEC. 11. Liability of members of investment bankers code committee and regional code committees.-No member of the investment bankers code committee or of any regional code committee shall be liable to any investment banker or to any other person for any action taken by such member in his capacity as a member of any such committee in connection with the administration or enforcement of the code or rules or of any provision of these supplementary provisions.

SCHEDULE A

Territorial boundaries of the several local districts established as provided in section 2 of article XI, are as follows:

1. California district: State of California.

2. Central States district: States of Illinois, Indiana, Iowa, Nebraska and Wisconsin.

3. Eastern Pennsylvania district: Counties of Tioga, Lycoming, Union, Snyder, Juaniata, Perry, Cumberland, and Adams in the State of Pennsylvania and all the remainder of the said State lying east of such counties, and the State of Delaware.

4. Michigan district: State of Michigan.

5. Minnesota district: States of Minnesota, Montana, North Dakota, and South Dakota.

6. Mississippi Valley District: The counties of Schuyler, Adair, Macon, Randolph, Boone, Cole, Osage, Maries, Phelps, Dent, Shannon, and Oregon in the State of Missouri and the remainder of the said State lying east of such counties; the States of Kentucky, and Arkansas; and the counties of Henry, Benton, Decatur, and Hardin in the State of Tennessee and the remaining counties of the State lying west of such counties.

7. New England district: States of Maine, New Hampshire, Vermont, Massachusetts and Rhode Island.

8. New York district: States of New York, Connecticut, and New Jersey. 9. Northern Ohio district: Counties of Mercer, Auglaize, Hardin, Marion, Morrow, Knox, Coshocton, Guernsey, and Belmont in the State of Ohio and all of the remainder of the said State lying north of such counties.

10. Ohio Valley district: Counties of Darke, Shelby, Logan, Union, Delaware, Licking, Muskingum, Noble, and Monroe in the State of Ohio and all of the remainder of the said State lying south of such counties.

11. Pacific Northwest district: States of Oregon, Washington, and Idaho. 12. Rocky Mountain district: States of Colorado, Arizona, Nevada, New Mexico, Utah, and Wyoming.

13. Southeastern district: States of Maryland, Virginia, West Virginia, North Carolina, and South Carolina; and the District of Columbia.

14. Southern district: States of Louisiana, Mississippi, Alabama, Georgia, and Florida; the counties of Stewart, Houston, Humphreys, Perry, and Wayne in the State of Tennessee and all the remainder of the said State lying east of such counties; and the counties of Newton, Jasper, Tyler, Polk, San Jacinto, Walker, Grimes. Brazos, Milam, Williamson, Burnet, Llano, Mason, Menard, Schleicher, Crockett, Pecos, and Jeff Davis in the State of Texas and all the remainder of the State lying south of such counties.

15. Southwestern district: Counties of Putnam, Sullivan, Linn, Chariton, Howard, Cooper, Moniteau, Miller, Pulaski, Texas, and Howell in the State of Missouri and all of the remainder of the said State lying west of such counties; the States of Kansas and Oklahoma; and the counties of Sabine, San Augustine, Angelina, Trinity, Houston, Madison, Robertson, Falls, Bell, Lampasas, San Saba, McCulloch, Concho, Tom Green, Irion, Reagan, Upton, Crane, Ward, Culberson, Reebes, Hudspeth, and El Paso in the State of Texas and all the remainder of the said State lying north of such counties.

16. Western Pennsylvania district: Counties of Potter, Clinton, Center, Miffin, Huntingdon, and Franklin in the State of Pennsylvania and all of the remainder of the said State lying west of such counties.