§ 77s. — Special powers of Commission.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC77s]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2A--SECURITIES AND TRUST INDENTURES
SUBCHAPTER I--DOMESTIC SECURITIES
Sec. 77s. Special powers of Commission
(a) Rules and regulations
The Commission shall have authority from time to time to make,
amend, and rescind such rules and regulations as may be necessary to
carry out the provisions of this subchapter, including rules and
regulations governing registration statements and prospectuses for
various classes of securities and issuers, and defining accounting,
technical, and trade terms used in this subchapter. Among other things,
the Commission shall have authority, for the purposes of this
subchapter, to prescribe the form or forms in which required information
shall be set forth, the items or details to be shown in the balance
sheet and earning statement, and the methods to be followed in the
preparation of accounts, in the appraisal or valuation of assets and
liabilities, in the determination of depreciation and depletion, in the
differentiation of recurring and nonrecurring income, in the
differentiation of investment and operating income, and in the
preparation, where the Commission deems it necessary or desirable, of
consolidated balance sheets or income accounts of any person directly or
indirectly controlling or controlled by the issuer, or any person under
direct or indirect common control with the issuer. The rules and
regulations of the Commission shall be effective upon publication in the
manner which the Commission shall prescribe. No provision of this
subchapter imposing any liability shall apply to any act done or omitted
in good faith in conformity with any rule or regulation of the
Commission, notwithstanding that such rule or regulation may, after such
act or omission, be amended or rescinded or be determined by judicial or
other authority to be invalid for any reason.
(b) Recognition of accounting standards
(1) In general
In carrying out its authority under subsection (a) of this
section and under section 78m(b) of this title, the Commission may
recognize, as ``generally accepted'' for purposes of the securities
laws, any accounting principles established by a standard setting
body--
(A) that--
(i) is organized as a private entity;
(ii) has, for administrative and operational purposes, a
board of trustees (or equivalent body) serving in the public
interest, the majority of whom are not, concurrent with
their service on such board, and have not been during the 2-
year period preceding such service, associated persons of
any registered public accounting firm;
(iii) is funded as provided in section 7219 of this
title;
(iv) has adopted procedures to ensure prompt
consideration, by majority vote of its members, of changes
to accounting principles necessary to reflect emerging
accounting issues and changing business practices; and
(v) considers, in adopting accounting principles, the
need to keep standards current in order to reflect changes
in the business environment, the extent to which
international convergence on high quality accounting
standards is necessary or appropriate in the public interest
and for the protection of investors; and
(B) that the Commission determines has the capacity to
assist the Commission in fulfilling the requirements of
subsection (a) of this section and section 78m(b) of this title,
because, at a minimum, the standard setting body is capable of
improving the accuracy and effectiveness of financial reporting
and the protection of investors under the securities laws.
(2) Annual report
A standard setting body described in paragraph (1) shall submit
an annual report to the Commission and the public, containing
audited financial statements of that standard setting body.
(c) Production of evidence
For the purpose of all investigations which, in the opinion of the
Commission, are necessary and proper for the enforcement of this
subchapter, any member of the Commission or any officer or officers
designated by it are empowered to administer oaths and affirmations,
subpena witnesses, take evidence, and require the production of any
books, papers, or other documents which the Commission deems relevant or
material to the inquiry. Such attendance of witnesses and the production
of such documentary evidence may be required from any place in the
United States or any Territory at any designated place of hearing.
(d) Federal and State cooperation
(1) The Commission is authorized to cooperate with any association
composed of duly constituted representatives of State governments whose
primary assignment is the regulation of the securities business within
those States, and which, in the judgment of the Commission, could assist
in effectuating greater uniformity in Federal-State securities matters.
The Commission shall, at its discretion, cooperate, coordinate, and
share information with such an association for the purposes of carrying
out the policies and projects set forth in paragraphs (2) and (3).
(2) It is the declared policy of this subsection that there should
be greater Federal and State cooperation in securities matters,
including--
(A) maximum effectiveness of regulation,
(B) maximum uniformity in Federal and State regulatory
standards,
(C) minimum interference with the business of capital formation,
and
(D) a substantial reduction in costs and paperwork to diminish
the burdens of raising investment capital (particularly by small
business) and to diminish the costs of the administration of the
Government programs involved.
(3) The purpose of this subsection is to engender cooperation
between the Commission, any such association of State securities
officials, and other duly constituted securities associations in the
following areas:
(A) the sharing of information regarding the registration or
exemption of securities issues applied for in the various States;
(B) the development and maintenance of uniform securities forms
and procedures; and
(C) the development of a uniform exemption from registration for
small issuers which can be agreed upon among several States or
between the States and the Federal Government. The Commission shall
have the authority to adopt such an exemption as agreed upon for
Federal purposes. Nothing in this chapter shall be construed as
authorizing preemption of State law.
(4) In order to carry out these policies and purposes, the
Commission shall conduct an annual conference as well as such other
meetings as are deemed necessary, to which representatives from such
securities associations, securities self-regulatory organizations,
agencies, and private organizations involved in capital formation shall
be invited to participate.
(5) For fiscal year 1982, and for each of the three succeeding
fiscal years, there are authorized to be appropriated such amounts as
may be necessary and appropriate to carry out the policies, provisions,
and purposes of this subsection. Any sums so appropriated shall remain
available until expended.
(6) Notwithstanding any other provision of law, neither the
Commission nor any other person shall be required to establish any
procedures not specifically required by the securities laws, as that
term is defined in section 78c(a)(47) of this title, or by chapter 5 of
title 5, in connection with cooperation, coordination, or consultation
with--
(A) any association referred to in paragraph (1) or (3) or any
conference or meeting referred to in paragraph (4), while such
association, conference, or meeting is carrying out activities in
furtherance of the provisions of this subsection; or
(B) any forum, agency, or organization, or group referred to in
section 80c-1 of this title, while such forum, agency, organization,
or group is carrying out activities in furtherance of the provisions
of such section 80c-1.
As used in this paragraph, the terms ``association'', ``conference'',
``meeting'', ``forum'', ``agency'', ``organization'', and ``group''
include any committee, subgroup, or representative of such entities.
(May 27, 1933, ch. 38, title I, Sec. 19, 48 Stat. 85; June 6, 1934, ch.
404, title II, Sec. 209, 48 Stat. 908; Pub. L. 94-210, title III,
Sec. 308(a)(2), Feb. 5, 1976, 90 Stat. 57; Pub. L. 96-477, title V,
Sec. 505, Oct. 21, 1980, 94 Stat. 2292; Pub. L. 100-181, title II,
Sec. 207, Dec. 4, 1987, 101 Stat. 1252; Pub. L. 107-204, title I,
Sec. 108(a), July 30, 2002, 116 Stat. 768.)
Amendments
2002--Subsecs. (b) to (d). Pub. L. 107-204 added subsec. (b) and
redesignated former subsecs. (b) and (c) as (c) and (d), respectively.
1987--Subsec. (c)(6). Pub. L. 100-181 added par. (6).
1980--Subsec. (c). Pub. L. 96-477 added subsec. (c).
1976--Subsec. (a). Pub. L. 94-210 struck out provisions relating to
rules and regulations applicable to any common carrier subject to the
provisions of section 20 of title 49.
1934--Subsec. (a). Act June 6, 1934, inserted ``technical'' in first
sentence and inserted last sentence.
Effective Date of 1980 Amendment
Amendment by Pub. L. 96-477 effective Jan. 1, 1981, see section 507
of Pub. L. 96-477, set out as an Effective Date note under section 80c
of this title.
Effective Date of 1976 Amendment
Amendment by Pub. L. 94-210 effective on 60th day after Feb. 5,
1976, but not applicable to any bona fide offering of a security made by
the issuer, or by or through an underwriter, before such 60th day, see
section 308(d)(1) of Pub. L. 94-210, set out as a note under section 77c
of this title.
Transfer of Functions
For transfer of functions of Securities and Exchange Commission,
with certain exceptions, to Chairman of such Commission, see Reorg. Plan
No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat.
1265, set out under section 78d of this title.
Section Referred to in Other Sections
This section is referred to in sections 78u, 7201, 7218, 7219 of
this title.
