§ 78m. — Periodical and other reports.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC78m]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2B--SECURITIES EXCHANGES
Sec. 78m. Periodical and other reports
(a) Reports by issuer of security; contents
Every issuer of a security registered pursuant to section 78l of
this title shall file with the Commission, in accordance with such rules
and regulations as the Commission may prescribe as necessary or
appropriate for the proper protection of investors and to insure fair
dealing in the security--
(1) such information and documents (and such copies thereof) as
the Commission shall require to keep reasonably current the
information and documents required to be included in or filed with
an application or registration statement filed pursuant to section
78l of this title, except that the Commission may not require the
filing of any material contract wholly executed before July 1, 1962.
(2) such annual reports (and such copies thereof), certified if
required by the rules and regulations of the Commission by
independent public accountants, and such quarterly reports (and such
copies thereof), as the Commission may prescribe.
Every issuer of a security registered on a national securities exchange
shall also file a duplicate original of such information, documents, and
reports with the exchange.
(b) Form of report; books, records, and internal accounting; directives
(1) The Commission may prescribe, in regard to reports made pursuant
to this chapter, the form or forms in which the required information
shall be set forth, the items or details to be shown in the balance
sheet and the earning statement, and the methods to be followed in the
preparation of reports, 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
separate and/or 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;
but in the case of the reports of any person whose methods of accounting
are prescribed under the provisions of any law of the United States, or
any rule or regulation thereunder, the rules and regulations of the
Commission with respect to reports shall not be inconsistent with the
requirements imposed by such law or rule or regulation in respect of the
same subject matter (except that such rules and regulations of the
Commission may be inconsistent with such requirements to the extent that
the Commission determines that the public interest or the protection of
investors so requires).
(2) Every issuer which has a class of securities registered pursuant
to section 78l of this title and every issuer which is required to file
reports pursuant to section 78o(d) of this title shall--
(A) make and keep books, records, and accounts, which, in
reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the issuer;
(B) devise and maintain a system of internal accounting controls
sufficient to provide reasonable assurances that--
(i) transactions are executed in accordance with
management's general or specific authorization;
(ii) transactions are recorded as necessary (I) to permit
preparation of financial statements in conformity with generally
accepted accounting principles or any other criteria applicable
to such statements, and (II) to maintain accountability for
assets;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences; and
(C) notwithstanding any other provision of law, pay the
allocable share of such issuer of a reasonable annual accounting
support fee or fees, determined in accordance with section 7219 of
this title.
(3)(A) With respect to matters concerning the national security of
the United States, no duty or liability under paragraph (2) of this
subsection shall be imposed upon any person acting in cooperation with
the head of any Federal department or agency responsible for such
matters if such act in cooperation with such head of a department or
agency was done upon the specific, written directive of the head of such
department or agency pursuant to Presidential authority to issue such
directives. Each directive issued under this paragraph shall set forth
the specific facts and circumstances with respect to which the
provisions of this paragraph are to be invoked. Each such directive
shall, unless renewed in writing, expire one year after the date of
issuance.
(B) Each head of a Federal department or agency of the United States
who issues a directive pursuant to this paragraph shall maintain a
complete file of all such directives and shall, on October 1 of each
year, transmit a summary of matters covered by such directives in force
at any time during the previous year to the Permanent Select Committee
on Intelligence of the House of Representatives and the Select Committee
on Intelligence of the Senate.
(4) No criminal liability shall be imposed for failing to comply
with the requirements of paragraph (2) of this subsection except as
provided in paragraph (5) of this subsection.
(5) No person shall knowingly circumvent or knowingly fail to
implement a system of internal accounting controls or knowingly falsify
any book, record, or account described in paragraph (2).
(6) Where an issuer which has a class of securities registered
pursuant to section 78l of this title or an issuer which is required to
file reports pursuant to section 78o(d) of this title holds 50 per
centum or less of the voting power with respect to a domestic or foreign
firm, the provisions of paragraph (2) require only that the issuer
proceed in good faith to use its influence, to the extent reasonable
under the issuer's circumstances, to cause such domestic or foreign firm
to devise and maintain a system of internal accounting controls
consistent with paragraph (2). Such circumstances include the relative
degree of the issuer's ownership of the domestic or foreign firm and the
laws and practices governing the business operations of the country in
which such firm is located. An issuer which demonstrates good faith
efforts to use such influence shall be conclusively presumed to have
complied with the requirements of paragraph (2).
(7) For the purpose of paragraph (2) of this subsection, the terms
``reasonable assurances'' and ``reasonable detail'' mean such level of
detail and degree of assurance as would satisfy prudent officials in the
conduct of their own affairs.
(c) Alternative reports
If in the judgment of the Commission any report required under
subsection (a) of this section is inapplicable to any specified class or
classes of issuers, the Commission shall require in lieu thereof the
submission of such reports of comparable character as it may deem
applicable to such class or classes of issuers.
(d) Reports by persons acquiring more than five per centum of certain
classes of securities
(1) Any person who, after acquiring directly or indirectly the
beneficial ownership of any equity security of a class which is
registered pursuant to section 78l of this title, or any equity security
of an insurance company which would have been required to be so
registered except for the exemption contained in section 78l(g)(2)(G) of
this title, or any equity security issued by a closed-end investment
company registered under the Investment Company Act of 1940 [15 U.S.C.
80a-1 et seq.] or any equity security issued by a Native Corporation
pursuant to section 1629c(d)(6) of title 43, is directly or indirectly
the beneficial owner of more than 5 per centum of such class shall,
within ten days after such acquisition, send to the issuer of the
security at its principal executive office, by registered or certified
mail, send to each exchange where the security is traded, and file with
the Commission, a statement containing such of the following
information, and such additional information, as the Commission may by
rules and regulations, prescribe as necessary or appropriate in the
public interest or for the protection of investors--
(A) the background, and identity, residence, and citizenship of,
and the nature of such beneficial ownership by, such person and all
other persons by whom or on whose behalf the purchases have been or
are to be effected;
(B) the source and amount of the funds or other consideration
used or to be used in making the purchases, and if any part of the
purchase price is represented or is to be represented by funds or
other consideration borrowed or otherwise obtained for the purpose
of acquiring, holding, or trading such security, a description of
the transaction and the names of the parties thereto, except that
where a source of funds is a loan made in the ordinary course of
business by a bank, as defined in section 78c(a)(6) of this title,
if the person filing such statement so requests, the name of the
bank shall not be made available to the public;
(C) if the purpose of the purchases or prospective purchases is
to acquire control of the business of the issuer of the securities,
any plans or proposals which such persons may have to liquidate such
issuer, to sell its assets to or merge it with any other persons, or
to make any other major change in its business or corporate
structure;
(D) the number of shares of such security which are beneficially
owned, and the number of shares concerning which there is a right to
acquire, directly or indirectly, by (i) such person, and (ii) by
each associate of such person, giving the background, identity,
residence, and citizenship of each such associate; and
(E) information as to any contracts, arrangements, or
understandings with any person with respect to any securities of the
issuer, including but not limited to transfer of any of the
securities, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties against loss or guaranties of
profits, division of losses or profits, or the giving or withholding
of proxies, naming the persons with whom such contracts,
arrangements, or understandings have been entered into, and giving
the details thereof.
(2) If any material change occurs in the facts set forth in the
statements to the issuer and the exchange, and in the statement filed
with the Commission, an amendment shall be transmitted to the issuer and
the exchange and shall be filed with the Commission, in accordance with
such rules and regulations as the Commission may prescribe as necessary
or appropriate in the public interest or for the protection of
investors.
(3) When two or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of acquiring,
holding, or disposing of securities of an issuer, such syndicate or
group shall be deemed a ``person'' for the purposes of this subsection.
(4) In determining, for purposes of this subsection, any percentage
of a class of any security, such class shall be deemed to consist of the
amount of the outstanding securities of such class, exclusive of any
securities of such class held by or for the account of the issuer or a
subsidiary of the issuer.
(5) The Commission, by rule or regulation or by order, may permit
any person to file in lieu of the statement required by paragraph (1) of
this subsection or the rules and regulations thereunder, a notice
stating the name of such person, the number of shares of any equity
securities subject to paragraph (1) which are owned by him, the date of
their acquisition and such other information as the Commission may
specify, if it appears to the Commission that such securities were
acquired by such person in the ordinary course of his business and were
not acquired for the purpose of and do not have the effect of changing
or influencing the control of the issuer nor in connection with or as a
participant in any transaction having such purpose or effect.
(6) The provisions of this subsection shall not apply to--
(A) any acquisition or offer to acquire securities made or
proposed to be made by means of a registration statement under the
Securities Act of 1933 [15 U.S.C. 77a et seq.];
(B) any acquisition of the beneficial ownership of a security
which, together with all other acquisitions by the same person of
securities of the same class during the preceding twelve months,
does not exceed 2 per centum of that class;
(C) any acquisition of an equity security by the issuer of such
security;
(D) any acquisition or proposed acquisition of a security which
the Commission, by rules or regulations or by order, shall exempt
from the provisions of this subsection as not entered into for the
purpose of, and not having the effect of, changing or influencing
the control of the issuer or otherwise as not comprehended within
the purposes of this subsection.
(e) Purchase of securities by issuer
(1) It shall be unlawful for an issuer which has a class of equity
securities registered pursuant to section 78l of this title, or which is
a closed-end investment company registered under the Investment Company
Act of 1940 [15 U.S.C. 80a-1 et seq.], to purchase any equity security
issued by it if such purchase is in contravention of such rules and
regulations as the Commission, in the public interest or for the
protection of investors, may adopt (A) to define acts and practices
which are fraudulent, deceptive, or manipulative, and (B) to prescribe
means reasonably designed to prevent such acts and practices. Such rules
and regulations may require such issuer to provide holders of equity
securities of such class with such information relating to the reasons
for such purchase, the source of funds, the number of shares to be
purchased, the price to be paid for such securities, the method of
purchase, and such additional information, as the Commission deems
necessary or appropriate in the public interest or for the protection of
investors, or which the Commission deems to be material to a
determination whether such security should be sold.
(2) For the purpose of this subsection, a purchase by or for the
issuer or any person controlling, controlled by, or under common control
with the issuer, or a purchase subject to control of the issuer or any
such person, shall be deemed to be a purchase by the issuer. The
Commission shall have power to make rules and regulations implementing
this paragraph in the public interest and for the protection of
investors, including exemptive rules and regulations covering situations
in which the Commission deems it unnecessary or inappropriate that a
purchase of the type described in this paragraph shall be deemed to be a
purchase by the issuer for purposes of some or all of the provisions of
paragraph (1) of this subsection.
(3) At the time of filing such statement as the Commission may
require by rule pursuant to paragraph (1) of this subsection, the person
making the filing shall pay to the Commission a fee at a rate that,
subject to paragraphs (5) and (6), is equal to $92 per $1,000,000 of the
value of securities proposed to be purchased. The fee shall be reduced
with respect to securities in an amount equal to any fee paid with
respect to any securities issued in connection with the proposed
transaction under section 6(b) of the Securities Act of 1933 [15 U.S.C.
77f(b)], or the fee paid under that section shall be reduced in an
amount equal to the fee paid to the Commission in connection with such
transaction under this paragraph.
(4) Offsetting collections.--Fees collected pursuant to this
subsection for any fiscal year shall be deposited and credited as
offsetting collections to the account providing appropriations to the
Commission, and, except as provided in paragraph (9), shall not be
collected for any fiscal year except to the extent provided in advance
in appropriation Acts. No fees collected pursuant to this subsection for
fiscal year 2002 or any succeeding fiscal year shall be deposited and
credited as general revenue of the Treasury.
(5) Annual adjustment.--For each of the fiscal years 2003 through
2011, the Commission shall by order adjust the rate required by
paragraph (3) for such fiscal year to a rate that is equal to the rate
(expressed in dollars per million) that is applicable under section 6(b)
of the Securities Act of 1933 [15 U.S.C. 77f(b)] for such fiscal year.
(6) Final rate adjustment.--For fiscal year 2012 and all of the
succeeding fiscal years, the Commission shall by order adjust the rate
required by paragraph (3) for all of such fiscal years to a rate that is
equal to the rate (expressed in dollars per million) that is applicable
under section 6(b) of the Securities Act of 1933 [15 U.S.C. 77f(b)] for
all of such fiscal years.
(7) Pro rata application.--The rates per $1,000,000 required by this
subsection shall be applied pro rata to amounts and balances of less
than $1,000,000.
(8) Review and effective date.--In exercising its authority under
this subsection, the Commission shall not be required to comply with the
provisions of section 553 of title 5. An adjusted rate prescribed under
paragraph (5) or (6) and published under paragraph (10) shall not be
subject to judicial review. Subject to paragraphs (4) and (9)--
(A) an adjusted rate prescribed under paragraph (5) shall take
effect on the later of--
(i) the first day of the fiscal year to which such rate
applies; or
(ii) five days after the date on which a regular
appropriation to the Commission for such fiscal year is enacted;
and
(B) an adjusted rate prescribed under paragraph (6) shall take
effect on the later of--
(i) the first day of fiscal year 2012; or
(ii) five days after the date on which a regular
appropriation to the Commission for fiscal year 2012 is enacted.
(9) Lapse of appropriation.--If on the first day of a fiscal year a
regular appropriation to the Commission has not been enacted, the
Commission shall continue to collect fees (as offsetting collections)
under this subsection at the rate in effect during the preceding fiscal
year, until 5 days after the date such a regular appropriation is
enacted.
(10) Publication.--The rate applicable under this subsection for
each fiscal year is published pursuant to section 6(b)(10) of the
Securities Act of 1933 [15 U.S.C. 77f(b)(10)].
(f) Reports by institutional investment managers
(1) Every institutional investment manager which uses the mails, or
any means or instrumentality of interstate commerce in the course of its
business as an institutional investment manager and which exercises
investment discretion with respect to accounts holding equity securities
of a class described in subsection (d)(1) of this section having an
aggregate fair market value on the last trading day in any of the
preceding twelve months of at least $100,000,000 or such lesser amount
(but in no case less than $10,000,000) as the Commission, by rule, may
determine, shall file reports with the Commission in such form, for such
periods, and at such times after the end of such periods as the
Commission, by rule, may prescribe, but in no event shall such reports
be filed for periods longer than one year or shorter than one quarter.
Such reports shall include for each such equity security held on the
last day of the reporting period by accounts (in aggregate or by type as
the Commission, by rule, may prescribe) with respect to which the
institutional investment manager exercises investment discretion (other
than securities held in amounts which the Commission, by rule,
determines to be insignificant for purposes of this subsection), the
name of the issuer and the title, class, CUSIP number, number of shares
or principal amount, and aggregate fair market value of each such
security. Such reports may also include for accounts (in aggregate or by
type) with respect to which the institutional investment manager
exercises investment discretion such of the following information as the
Commission, by rule, prescribes--
(A) the name of the issuer and the title, class, CUSIP number,
number of shares or principal amount, and aggregate fair market
value or cost or amortized cost of each other security (other than
an exempted security) held on the last day of the reporting period
by such accounts;
(B) the aggregate fair market value or cost or amortized cost of
exempted securities (in aggregate or by class) held on the last day
of the reporting period by such accounts;
(C) the number of shares of each equity security of a class
described in subsection (d)(1) of this section held on the last day
of the reporting period by such accounts with respect to which the
institutional investment manager possesses sole or shared authority
to exercise the voting rights evidenced by such securities;
(D) the aggregate purchases and aggregate sales during the
reporting period of each security (other than an exempted security)
effected by or for such accounts; and
(E) with respect to any transaction or series of transactions
having a market value of at least $500,000 or such other amount as
the Commission, by rule, may determine, effected during the
reporting period by or for such accounts in any equity security of a
class described in subsection (d)(1) of this section--
(i) the name of the issuer and the title, class, and CUSIP
number of the security;
(ii) the number of shares or principal amount of the
security involved in the transaction;
(iii) whether the transaction was a purchase or sale;
(iv) the per share price or prices at which the transaction
was effected;
(v) the date or dates of the transaction;
(vi) the date or dates of the settlement of the transaction;
(vii) the broker or dealer through whom the transaction was
effected;
(viii) the market or markets in which the transaction was
effected; and
(ix) such other related information as the Commission, by
rule, may prescribe.
(2) The Commission, by rule, or order, may exempt, conditionally or
unconditionally, any institutional investment manager or security or any
class of institutional investment managers or securities from any or all
of the provisions of this subsection or the rules thereunder.
(3) The Commission shall make available to the public for a
reasonable fee a list of all equity securities of a class described in
subsection (d)(1) of this section, updated no less frequently than
reports are required to be filed pursuant to paragraph (1) of this
subsection. The Commission shall tabulate the information contained in
any report filed pursuant to this subsection in a manner which will, in
the view of the Commission, maximize the usefulness of the information
to other Federal and State authorities and the public. Promptly after
the filing of any such report, the Commission shall make the information
contained therein conveniently available to the public for a reasonable
fee in such form as the Commission, by rule, may prescribe, except that
the Commission, as it determines to be necessary or appropriate in the
public interest or for the protection of investors, may delay or prevent
public disclosure of any such information in accordance with section 552
of title 5. Notwithstanding the preceding sentence, any such information
identifying the securities held by the account of a natural person or an
estate or trust (other than a business trust or investment company)
shall not be disclosed to the public.
(4) In exercising its authority under this subsection, the
Commission shall determine (and so state) that its action is necessary
or appropriate in the public interest and for the protection of
investors or to maintain fair and orderly markets or, in granting an
exemption, that its action is consistent with the protection of
investors and the purposes of this subsection. In exercising such
authority the Commission shall take such steps as are within its power,
including consulting with the Comptroller General of the United States,
the Director of the Office of Management and Budget, the appropriate
regulatory agencies, Federal and State authorities which, directly or
indirectly, require reports from institutional investment managers of
information substantially similar to that called for by this subsection,
national securities exchanges, and registered securities associations,
(A) to achieve uniform, centralized reporting of information concerning
the securities holdings of and transactions by or for accounts with
respect to which institutional investment managers exercise investment
discretion, and (B) consistently with the objective set forth in the
preceding subparagraph, to avoid unnecessarily duplicative reporting by,
and minimize the compliance burden on, institutional investment
managers. Federal authorities which, directly or indirectly, require
reports from institutional investment managers of information
substantially similar to that called for by this subsection shall
cooperate with the Commission in the performance of its responsibilities
under the preceding sentence. An institutional investment manager which
is a bank, the deposits of which are insured in accordance with the
Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.], shall file with
the appropriate regulatory agency a copy of every report filed with the
Commission pursuant to this subsection.
(5)(A) For purposes of this subsection the term ``institutional
investment manager'' includes any person, other than a natural person,
investing in or buying and selling securities for its own account, and
any person exercising investment discretion with respect to the account
of any other person.
(B) The Commission shall adopt such rules as it deems necessary or
appropriate to prevent duplicative reporting pursuant to this subsection
by two or more institutional investment managers exercising investment
discretion with respect to the same amount.\1\
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\1\ So in original. Probably should be ``account.''
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(g) Statement of equity security ownership
(1) Any person who is directly or indirectly the beneficial owner of
more than 5 per centum of any security of a class described in
subsection (d)(1) of this section shall send to the issuer of the
security and shall file with the Commission a statement setting forth,
in such form and at such time as the Commission may, by rule,
prescribe--
(A) such person's identity, residence, and citizenship; and
(B) the number and description of the shares in which such
person has an interest and the nature of such interest.
(2) If any material change occurs in the facts set forth in the
statement sent to the issuer and filed with the Commission, an amendment
shall be transmitted to the issuer and shall be filed with the
Commission, in accordance with such rules and regulations as the
Commission may prescribe as necessary or appropriate in the public
interest or for the protection of investors.
(3) When two or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of acquiring,
holding, or disposing of securities of an issuer, such syndicate or
group shall be deemed a ``person'' for the purposes of this subsection.
(4) In determining, for purposes of this subsection, any percentage
of a class of any security, such class shall be deemed to consist of the
amount of the outstanding securities of such class, exclusive of any
securities of such class held by or for the account of the issuer or a
subsidiary of the issuer.
(5) In exercising its authority under this subsection, the
Commission shall take such steps as it deems necessary or appropriate in
the public interest or for the protection of investors (A) to achieve
centralized reporting of information regarding ownership, (B) to avoid
unnecessarily duplicative reporting by and minimize the compliance
burden on persons required to report, and (C) to tabulate and promptly
make available the information contained in any report filed pursuant to
this subsection in a manner which will, in the view of the Commission,
maximize the usefulness of the information to other Federal and State
agencies and the public.
(6) The Commission may, by rule or order, exempt, in whole or in
part, any person or class of persons from any or all of the reporting
requirements of this subsection as it deems necessary or appropriate in
the public interest or for the protection of investors.
(h) Large trader reporting
(1) Identification requirements for large traders
For the purpose of monitoring the impact on the securities
markets of securities transactions involving a substantial volume or
a large fair market value or exercise value and for the purpose of
otherwise assisting the Commission in the enforcement of this
chapter, each large trader shall--
(A) provide such information to the Commission as the
Commission may by rule or regulation prescribe as necessary or
appropriate, identifying such large trader and all accounts in
or through which such large trader effects such transactions;
and
(B) identify, in accordance with such rules or regulations
as the Commission may prescribe as necessary or appropriate, to
any registered broker or dealer by or through whom such large
trader directly or indirectly effects securities transactions,
such large trader and all accounts directly or indirectly
maintained with such broker or dealer by such large trader in or
through which such transactions are effected.
(2) Recordkeeping and reporting requirements for brokers and
dealers
Every registered broker or dealer shall make and keep for
prescribed periods such records as the Commission by rule or
regulation prescribes as necessary or appropriate in the public
interest, for the protection of investors, or otherwise in
furtherance of the purposes of this chapter, with respect to
securities transactions that equal or exceed the reporting activity
level effected directly or indirectly by or through such registered
broker or dealer of or for any person that such broker or dealer
knows is a large trader, or any person that such broker or dealer
has reason to know is a large trader on the basis of transactions in
securities effected by or through such broker or dealer. Such
records shall be available for reporting to the Commission, or any
self-regulatory organization that the Commission shall designate to
receive such reports, on the morning of the day following the day
the transactions were effected, and shall be reported to the
Commission or a self-regulatory organization designated by the
Commission immediately upon request by the Commission or such a
self-regulatory organization. Such records and reports shall be in a
format and transmitted in a manner prescribed by the Commission
(including, but not limited to, machine readable form).
(3) Aggregation rules
The Commission may prescribe rules or regulations governing the
manner in which transactions and accounts shall be aggregated for
the purpose of this subsection, including aggregation on the basis
of common ownership or control.
(4) Examination of broker and dealer records
All records required to be made and kept by registered brokers
and dealers pursuant to this subsection with respect to transactions
effected by large traders are subject at any time, or from time to
time, to such reasonable periodic, special, or other examinations by
representatives of the Commission as the Commission deems necessary
or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of this
chapter.
(5) Factors to be considered in Commission actions
In exercising its authority under this subsection, the
Commission shall take into account--
(A) existing reporting systems;
(B) the costs associated with maintaining information with
respect to transactions effected by large traders and reporting
such information to the Commission or self-regulatory
organizations; and
(C) the relationship between the United States and
international securities markets.
(6) Exemptions
The Commission, by rule, regulation, or order, consistent with
the purposes of this chapter, may exempt any person or class of
persons or any transaction or class of transactions, either
conditionally or upon specified terms and conditions or for stated
periods, from the operation of this subsection, and the rules and
regulations thereunder.
(7) Authority of Commission to limit disclosure of
information
Notwithstanding any other provision of law, the Commission shall
not be compelled to disclose any information required to be kept or
reported under this subsection. Nothing in this subsection shall
authorize the Commission to withhold information from Congress, or
prevent the Commission from complying with a request for information
from any other Federal department or agency requesting information
for purposes within the scope of its jurisdiction, or complying with
an order of a court of the United States in an action brought by the
United States or the Commission. For purposes of section 552 of
title 5, this subsection shall be considered a statute described in
subsection (b)(3)(B) of such section 552.
(8) Definitions
For purposes of this subsection--
(A) the term ``large trader'' means every person who, for
his own account or an account for which he exercises investment
discretion, effects transactions for the purchase or sale of any
publicly traded security or securities by use of any means or
instrumentality of interstate commerce or of the mails, or of
any facility of a national securities exchange, directly or
indirectly by or through a registered broker or dealer in an
aggregate amount equal to or in excess of the identifying
activity level;
(B) the term ``publicly traded security'' means any equity
security (including an option on individual equity securities,
and an option on a group or index of such securities) listed, or
admitted to unlisted trading privileges, on a national
securities exchange, or quoted in an automated interdealer
quotation system;
(C) the term ``identifying activity level'' means
transactions in publicly traded securities at or above a level
of volume, fair market value, or exercise value as shall be
fixed from time to time by the Commission by rule or regulation,
specifying the time interval during which such transactions
shall be aggregated;
(D) the term ``reporting activity level'' means transactions
in publicly traded securities at or above a level of volume,
fair market value, or exercise value as shall be fixed from time
to time by the Commission by rule, regulation, or order,
specifying the time interval during which such transactions
shall be aggregated; and
(E) the term ``person'' has the meaning given in section
78c(a)(9) of this title and also includes two or more persons
acting as a partnership, limited partnership, syndicate, or
other group, but does not include a foreign central bank.
(i) Accuracy of financial reports
Each financial report that contains financial statements, and that
is required to be prepared in accordance with (or reconciled to)
generally accepted accounting principles under this chapter and filed
with the Commission shall reflect all material correcting adjustments
that have been identified by a registered public accounting firm in
accordance with generally accepted accounting principles and the rules
and regulations of the Commission.
(j) Off-balance sheet transactions
Not later than 180 days after July 30, 2002, the Commission shall
issue final rules providing that each annual and quarterly financial
report required to be filed with the Commission shall disclose all
material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the
issuer with unconsolidated entities or other persons, that may have a
material current or future effect on financial condition, changes in
financial condition, results of operations, liquidity, capital
expenditures, capital resources, or significant components of revenues
or expenses.
(k) Prohibition on personal loans to executives
(1) In general
It shall be unlawful for any issuer (as defined in section 7201
of this title), directly or indirectly, including through any
subsidiary, to extend or maintain credit, to arrange for the
extension of credit, or to renew an extension of credit, in the form
of a personal loan to or for any director or executive officer (or
equivalent thereof) of that issuer. An extension of credit
maintained by the issuer on July 30, 2002, shall not be subject to
the provisions of this subsection, provided that there is no
material modification to any term of any such extension of credit or
any renewal of any such extension of credit on or after July 30,
2002.
(2) Limitation
Paragraph (1) does not preclude any home improvement and
manufactured home loans (as that term is defined in section 1464 of
title 12), consumer credit (as defined in section 1602 of this
title), or any extension of credit under an open end credit plan (as
defined in section 1602 of this title), or a charge card (as defined
in section 1637(c)(4)(e) of this title), or any extension of credit
by a broker or dealer registered under section 78o of this title to
an employee of that broker or dealer to buy, trade, or carry
securities, that is permitted under rules or regulations of the
Board of Governors of the Federal Reserve System pursuant to section
78g of this title (other than an extension of credit that would be
used to purchase the stock of that issuer), that is--
(A) made or provided in the ordinary course of the consumer
credit business of such issuer;
(B) of a type that is generally made available by such
issuer to the public; and
(C) made by such issuer on market terms, or terms that are
no more favorable than those offered by the issuer to the
general public for such extensions of credit.
(3) Rule of construction for certain loans
Paragraph (1) does not apply to any loan made or maintained by
an insured depository institution (as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813)), if the loan is
subject to the insider lending restrictions of section 375b of title
12.
(l) Real time issuer disclosures
Each issuer reporting under subsec. (a) of this section or section
78o(d) of this title shall disclose to the public on a rapid and current
basis such additional information concerning material changes in the
financial condition or operations of the issuer, in plain English, which
may include trend and qualitative information and graphic presentations,
as the Commission determines, by rule, is necessary or useful for the
protection of investors and in the public interest.
(June 6, 1934, ch. 404, title I, Sec. 13, 48 Stat. 894; Pub. L. 88-467,
Sec. 4, Aug. 20, 1964, 78 Stat. 569; Pub. L. 90-439, Sec. 2, July 29,
1968, 82 Stat. 454; Pub. L. 91-567, Secs. 1, 2, Dec. 22, 1970, 84 Stat.
1497; Pub. L. 94-29, Sec. 10, June 4, 1975, 89 Stat. 119; Pub. L. 94-
210, title III, Sec. 308(b), Feb. 5, 1976, 90 Stat. 57; Pub. L. 95-213,
title I, Sec. 102, title II, Secs. 202, 203, Dec. 19, 1977, 91 Stat.
1494, 1498, 1499; Pub. L. 98-38, Sec. 2(a), June 6, 1983, 97 Stat. 205;
Pub. L. 100-181, title III, Secs. 315, 316, Dec. 4, 1987, 101 Stat.
1256; Pub. L. 100-241, Sec. 12(d), Feb. 3, 1988, 101 Stat. 1810; Pub. L.
100-418, title V, Sec. 5002, Aug. 23, 1988, 102 Stat. 1415; Pub. L. 101-
432, Sec. 3, Oct. 16, 1990, 104 Stat. 964; Pub. L. 107-123, Sec. 5, Jan.
16, 2002, 115 Stat. 2395; Pub. L. 107-204, title I, Sec. 109(h), title
IV, Secs. 401(a), 402(a), 409, July 30, 2002, 116 Stat. 771, 785, 787,
791.)
References in Text
This chapter, referred to in subsecs. (b)(1), (h)(1), (2), (4), (6),
and (i), was in the original ``this title''. See References in Text note
set out under section 78a of this title.
The Investment Company Act of 1940, referred to in subsecs. (d)(1)
and (e)(1), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, as
amended, which is classified generally to subchapter I (Sec. 80a-1 et
seq.) of chapter 2D of this title. For complete classification of this
Act to the Code, see section 80a-51 of this title and Tables.
The Securities Act of 1933, referred to in subsec. (d)(6)(A), is act
May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is
classified generally to subchapter I (Sec. 77a et seq.) of chapter 2A of
this title. For complete classification of this Act to the Code, see
section 77a of this title and Tables.
The Federal Deposit Insurance Act, referred to in subsec. (f)(4), is
act Sept. 21, 1950, ch. 967, Sec. 2, 64 Stat. 873, as amended, which is
classified generally to chapter 16 (Sec. 1811 et seq.) of Title 12,
Banks and Banking. For complete classification of this Act to the Code,
see Short Title note set out under section 1811 of Title 12 and Tables.
Section 7201 of this title, referred to in subsec. (k)(1), was in
the original ``section 2 of the Sarbanes-Oxley Act of 2002'', Pub. L.
107-204, which enacted section 7201 of this title and amended section
78c of this title.
Amendments
2002--Subsec. (b)(2)(C). Pub. L. 107-204, Sec. 109(h), added subpar.
(C).
Subsec. (e)(3). Pub. L. 107-123, Sec. 5(1), substituted ``a fee at a
rate that, subject to paragraphs (5) and (6), is equal to $92 per
$1,000,000 of the value of securities proposed to be purchased'' for ``a
fee of \1/50\ of 1 per centum of the value of securities proposed to be
purchased''.
Subsec. (e)(4) to (10). Pub. L. 107-123, Sec. 5(2), added pars. (4)
to (10).
Subsecs. (i), (j). Pub. L. 107-204, Sec. 401(a), added subsecs. (i)
and (j).
Subsec. (k). Pub. L. 107-204, Sec. 402(a), added subsec. (k).
Subsec. (l). Pub. L. 107-204, Sec. 409, added subsec. (l).
1990--Subsec. (h). Pub. L. 101-432 added subsec. (h).
1988--Subsec. (b)(4) to (7). Pub. L. 100-418 added pars. (4) to (7).
Subsec. (d)(1). Pub. L. 100-241 inserted ``or any equity security
issued by a Native Corporation pursuant to section 1629c(d)(6) of title
43''.
1987--Subsec. (c). Pub. L. 100-181, Sec. 315, struck out ``of''
after ``thereof''.
Subsec. (h). Pub. L. 100-181, Sec. 316, struck out subsec. (h) which
required Commission to report to Congress within thirty months of Dec.
19, 1977, with respect to effectiveness of ownership reporting
requirements contained in this chapter and desirability and feasibility
of reducing or otherwise modifying the 5 per centum threshold used in
subsecs. (d)(1) and (g)(1) of this section.
1983--Subsec. (e)(3). Pub. L. 98-38 added par. (3).
1977--Subsec. (b). Pub. L. 95-213, Sec. 102, designated existing
provisions as par. (1) and added pars. (2) and (3).
Subsec. (d)(1). Pub. L. 95-213, Sec. 202, inserted references to
residence and citizenship of persons and to nature of beneficial
ownership of persons in subpar. (A), and inserted references to
background, identity, residence, and citizenship of associates of
persons in subpar. (D).
Subsecs. (g), (h). Pub. L. 95-213, Sec. 203, added subsecs. (g) and
(h).
1976--Subsec. (b). Pub. L. 94-210 substituted provisions relating to
exceptions for inconsistent rules and regulations, for provisions
relating to reporting requirements for carriers subject to the
provisions of section 20 of title 49, or other carriers required to make
reports of the same general character as those required under section 20
of title 49.
1975--Subsec. (f). Pub. L. 94-29 added subsec. (f).
1970--Subsec. (d)(1). Pub. L. 91-567, Sec. 1(a), included equity
securities of insurance companies which would have been required to be
registered except for the exemption contained in section 78l(g)(2)(G) of
this title, and substituted ``5 per centum'' for ``10 per centum''.
Subsec. (d)(5), (6). Pub. L. 91-567, Sec. 1(b), added par. (5) and
redesignated former par. (5) as (6).
Subsec. (e)(2). Pub. L. 91-567, Sec. 2, inserted provisions
empowering the Commission to make rules and regulations implementing the
paragraph in the public interest and for the protection of investors.
1968--Subsecs. (d), (e). Pub. L. 90-439 added subsecs. (d) and (e).
1964--Subsec. (a). Pub. L. 88-467 substituted provisions which
require the issuer of a security registered pursuant to section 78l of
this title to file reports with the Commission rather than with the
exchange and to furnish the exchange with duplicate originals and
prohibit the Commission from requiring the filing of any material
contract wholly executed before July 1, 1962 for former provisions which
required the issuer of a security registered on a national securities
exchange to file certain reports with the exchange and to file
duplicates with the Commission.
Effective Date of 2002 Amendment
Amendment by Pub. L. 107-123 effective Oct. 1, 2001, except that
authorities provided by subsec. (e)(9) of this section to not apply
until Oct. 1, 2002, see section 11 of Pub. L. 107-123, set out as a note
under section 78ee of this title.
Effective Date of 1976 Amendment
Amendment by Pub. L. 94-210 not applicable to any report by any
person with respect to a fiscal year of such person which began before
Feb. 5, 1976, see section 308(d)(2) of Pub. L. 94-210, set out as a note
under section 80a-3 of this title.
Effective Date of 1975 Amendment
Amendment by Pub. L. 94-29 effective June 4, 1975, see section 31(a)
of Pub. L. 94-29, set out as a note under section 78b of this title.
Effective Date of 1964 Amendment
Amendment by Pub. L. 88-467 effective Aug. 20, 1964, see section 13
of Pub. L. 88-467, set out as a note under section 78c 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.
Consultation
Pub. L. 106-102, title II, Sec. 241, Nov. 12, 1999, 113 Stat. 1407,
provided that:
``(a) In General.--The Securities and Exchange Commission shall
consult and coordinate comments with the appropriate Federal banking
agency before taking any action or rendering any opinion with respect to
the manner in which any insured depository institution or depository
institution holding company reports loan loss reserves in its financial
statement, including the amount of any such loan loss reserve.
``(b) Definitions.--For purposes of subsection (a), the terms
`insured depository institution', `depository institution holding
company', and `appropriate Federal banking agency' have the same meaning
as given in section 3 of the Federal Deposit Insurance Act [12 U.S.C.
1813].''
Section Referred to in Other Sections
This section is referred to in sections 77f, 77r, 77s, 77z-2, 77nnn,
78c, 78j-1, 78l, 78n, 78o, 78u-5, 78w, 78hh, 80a-8, 80a-29, 80a-54, 80a-
63, 773, 7201, 7241, 7261, 7262, 7264, 7265, 7266 of this title; title 7
section 12a; title 11 section 1145; title 12 section 1817; title 16
section 824c; title 18 section 1350; title 22 section 2197; title 26
sections 162, 952, 964; title 29 section 1343; title 43 section 1629c.
