HR 1013 — Retirement Fairness for Charities and Educational Institutions Act of 2025

changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

 INVESTMENT COMPANY ACT OF 1940

TITLE I--INVESTMENT COMPANIES

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 definition of investment company

 Sec. 3. (a)(1) When used in this title, ``investment 
company'' means any issuer which--
 (A) is or holds itself out as being engaged 
 primarily, or proposes to engage primarily, in the 
 business of investing, reinvesting, or trading in 
 securities;
 (B) is engaged or proposes to engage in the business 
 of issuing face-amount certificates of the installment 
 type, or has been engaged in such business and has any 
 such certificate outstanding; or
 (C) is engaged or proposes to engage in the business 
 of investing, reinvesting, owning, holding, or trading 
 in securities, and owns or proposes to acquire 
 investment securities having a value exceeding 40 per 
 centum of the value of such issuer's total assets 
 (exclusive of Government securities and cash items) on 
 an unconsolidated basis.
 (2) As used in this section, ``investment securities'' 
includes all securities except (A) Government securities, (B) 
securities issued by employees' securities companies, and (C) 
securities issued by majority-owned subsidiaries of the owner 
which (i) are not investment companies, and (ii) are not 
relying on the exception from the definition of investment 
company in paragraph (1) or (7) of subsection (c).
 (b) Notwithstanding paragraph (1)(C) of subsection (a), none 
of the following persons is an investment company within the 
meaning of this title:
 (1) Any issuer primarily engaged, directly or through 
 a wholly-owned subsidiary or subsidiaries, in a 
 business or businesses other than that of investing, 
 reinvesting, owning, holding, or trading in securities.
 (2) Any issuer which the Commission, upon application 
 by such issuer, finds and by order declares to be 
 primarily engaged in a business or businesses other 
 than that of investing, reinvesting, owning, holding, 
 or trading in securities either directly or (A) through 
 majority-owned subsidiaries or (B) through controlled 
 companies conducting similar types of businesses. The 
 filing of an application under this paragraph in good 
 faith by an issuer other than a registered investment 
 company shall exempt the applicant for a period of 
 sixty days from all provisions of this title applicable 
 to investment companies as such. For cause shown, the 
 Commission by order may extend such period of exemption 
 for an additional period or periods. Whenever the 
 Commission, upon its own motion or upon application, 
 finds that the circumstances which gave rise to the 
 issuance of an order granting an application under this 
 paragraph no longer exist, the Commission shall by 
 order revoke such order.
 (3) Any issuer all the outstanding securities of 
 which (other than short-term paper and directors' 
 qualifying shares) are directly or indirectly owned by 
 a company excepted from the definition of investment 
 company by paragraph (1) or (2) of this subsection.
 (c) Notwithstanding subsection (a), none of the following 
persons is an investment company within the meaning of this 
title:
 (1) Any issuer whose outstanding securities (other 
 than short-term paper) are beneficially owned by not 
 more than one hundred persons (or, in the case of a 
 qualifying venture capital fund, 250 persons) and which 
 is not making and does not presently propose to make a 
 public offering of its securities. Such issuer shall be 
 deemed to be an investment company for purposes of the 
 limitations set forth in subparagraphs (A)(i) and 
 (B)(i) of section 12(d)(1) governing the purchase or 
 other acquisition by such issuer of any security issued 
 by any registered investment company and the sale of 
 any security issued by any registered open-end 
 investment company to any such issuer. For purposes of 
 this paragraph:
 (A) Beneficial ownership by a company shall 
 be deemed to be beneficial ownership by one 
 person, except that, if the company owns 10 per 
 centum or more of the outstanding voting 
 securities of the issuer, and is or, but for 
 the exception provided for in this paragraph or 
 paragraph (7), would be an investment company, 
 the beneficial ownership shall be deemed to be 
 that of the holders of such company's 
 outstanding securities (other than short-term 
 paper).
 (B) Beneficial ownership by any person who 
 acquires securities or interests in securities 
 of an issuer described in the first sentence of 
 this paragraph shall be deemed to be beneficial 
 ownership by the person from whom such transfer 
 was made, pursuant to such rules and 
 regulations as the Commission shall prescribe 
 as necessary or appropriate in the public 
 interest and consistent with the protection of 
 investors and the purposes fairly intended by 
 the policy and provisions of this title, where 
 the transfer was caused by legal separation, 
 divorce, death, or other involuntary event.
 (C)(i) The term ``qualifying venture capital 
 fund'' means a venture capital fund that has 
 not more than $10,000,000 in aggregate capital 
 contributions and uncalled committed capital, 
 with such dollar amount to be indexed for 
 inflation once every 5 years by the Commission, 
 beginning from a measurement made by the 
 Commission on a date selected by the 
 Commission, rounded to the nearest $1,000,000.
 (ii) The term ``venture capital fund'' has 
 the meaning given the term in section 
 275.203(l)-1 of title 17, Code of Federal 
 Regulations, or any successor regulation.
 (2)(A) Any person primarily engaged in the business 
 of underwriting and distributing securities issued by 
 other persons, selling securities to customers, acting 
 as broker, and acting as market intermediary, or any 
 one or more of such activities, whose gross income 
 normally is derived principally from such business and 
 related activities.
 (B) For purposes of this paragraph--
 (i) the term ``market intermediary'' means 
 any person that regularly holds itself out as 
 being willing contemporaneously to engage in, 
 and that is regularly engaged in, the business 
 of entering into transactions on both sides of 
 the market for a financial contract or one or 
 more such financial contracts; and
 (ii) the term ``financial contract'' means 
 any arrangement that--
 (I) takes the form of an individually 
 negotiated contract, agreement, or 
 option to buy, sell, lend, swap, or 
 repurchase, or other similar 
 individually negotiated transaction 
 commonly entered into by participants 
 in the financial markets;
 (II) is in respect of securities, 
 commodities, currencies, interest or 
 other rates, other measures of value, 
 or any other financial or economic 
 interest similar in purpose or function 
 to any of the foregoing; and
 (III) is entered into in response to 
 a request from a counter party for a 
 quotation, or is otherwise entered into 
 and structured to accommodate the 
 objectives of the counter party to such 
 arrangement.
 (3) Any bank or insurance company; any savings and 
 loan association, building and loan association, 
 cooperative bank, homestead association, or similar 
 institution, or any receiver, conservator, liquidator, 
 liquidating agent, or similar official or person 
 thereof or therefor; or any common trust fund or 
 similar fund maintained by a bank exclusively for the 
 collective investment and reinvestment of moneys 
 contributed thereto by the bank in its capacity as a 
 trustee, executor, administrator, or guardian, if--
 (A) such fund is employed by the bank solely 
 as an aid to the administration of trusts, 
 estates, or other accounts created and 
 maintained for a fiduciary purpose;
 (B) except in connection with the ordinary 
 advertising of the bank's fiduciary services, 
 interests in such fund are not--
 (i) advertised; or
 (ii) offered for sale to the general 
 public; and
 (C) fees and expenses charged by such fund 
 are not in contravention of fiduciary 
 principles established under applicable Federal 
 or State law.
 (4) Any person substantially all of whose business is 
 confined to making small loans, industrial banking, or 
 similar businesses.
 (5) Any person who is not engaged in the business of 
 issuing redeemable securities, face-amount certificates 
 of the installment type or periodic payment plan 
 certificates, and who is primarily engaged in one or 
 more of the following businesses: (A) Purchasing or 
 otherwise acquiring notes, drafts, acceptances, open 
 accounts receivable, and other obligations representing 
 part or all of the sales price of merchandise, 
 insurance, and services; (B) making loans to 
 manufacturers, wholesalers, and retailers of, and to 
 prospective purchasers of, specified merchandise, 
 insurance, and services; and (C) purchasing or 
 otherwise acquiring mortgages and other liens on and 
 interests in real estate.
 (6) Any company primarily engaged, directly or 
 through majority-owned subsidiaries, in one or more of 
 the businesses described in paragraphs (3), (4), and 
 (5), or in one or more of such businesses (from which 
 not less than 25 centum of such company's gross income 
 during its last fiscal year was derived) together with 
 an additional business or businesses other than 
 investing, reinvesting, owning, holding, or trading in 
 securities.
 (7)(A) Any issuer, the outstanding securities of 
 which are owned exclusively by persons who, at the time 
 of acquisition of such securities, are qualified 
 purchasers, and which is not making and does not at 
 that time propose to make a public offering of such 
 securities. Securities that are owned by persons who 
 received the securities from a qualified purchaser as a 
 gift or bequest, or in a case in which the transfer was 
 caused by legal separation, divorce, death, or other 
 involuntary event, shall be deemed to be owned by a 
 qualified purchaser, subject to such rules, 
 regulations, and orders as the Commission may prescribe 
 as necessary or appropriate in the public interest or 
 for the protection of investors.
 (B) Notwithstanding subparagraph (A), an issuer is 
 within the exception provided by this paragraph if--
 (i) in addition to qualified purchasers, 
 outstanding securities of that issuer are 
 beneficially owned by not more than 100 persons 
 who are not qualified purchasers, if--
 (I) such persons acquired any portion 
 of the securities of such issuer on or 
 before September 1, 1996; and
 (II) at the time at which such 
 persons initially acquired the 
 securities of such issuer, the issuer 
 was excepted by paragraph (1); and
 (ii) prior to availing itself of the 
 exception provided by this paragraph--
 (I) such issuer has disclosed to each 
 beneficial owner, as determined under 
 paragraph (1), that future investors 
 will be limited to qualified 
 purchasers, and that ownership in such 
 issuer is no longer limited to not more 
 than 100 persons; and
 (II) concurrently with or after such 
 disclosure, such issuer has provided 
 each beneficial owner, as determined 
 under paragraph (1), with a reasonable 
 opportunity to redeem any part or all 
 of their interests in the issuer, 
 notwithstanding any agreement to the 
 contrary between the issuer and such 
 persons, for that person's 
 proportionate share of the issuer's net 
 assets.
 (C) Each person that elects to redeem under 
 subparagraph (B)(ii)(II) shall receive an amount in 
 cash equal to that person's proportionate share of the 
 issuer's net assets, unless the issuer elects to 
 provide such person with the option of receiving, and 
 such person agrees to receive, all or a portion of such 
 person's share in assets of the issuer. If the issuer 
 elects to provide such persons with such an 
 opportunity, disclosure concerning such opportunity 
 shall be made in the disclosure required by 
 subparagraph (B)(ii)(I).
 (D) An issuer that is excepted under this paragraph 
 shall nonetheless be deemed to be an investment company 
 for purposes of the limitations set forth in 
 subparagraphs (A)(i) and (B)(i) of section 12(d)(1) 
 relating to the purchase or other acquisition by such 
 issuer of any security issued by any registered 
 investment company and the sale of any security issued 
 by any registered open-end investment company to any 
 such issuer.
 (E) For purposes of determining compliance with this 
 paragraph and paragraph (1), an issuer that is 
 otherwise excepted under this paragraph and an issuer 
 that is otherwise excepted under paragraph (1) shall 
 not be treated by the Commission as being a single 
 issuer for purposes of determining whether the 
 outstanding securities of the issuer excepted under 
 paragraph (1) are beneficially owned by not more than 
 100 persons or whether the outstanding securities of 
 the issuer excepted under this paragraph are owned by 
 persons that are not qualified purchasers. Nothing in 
 this subparagraph shall be construed to establish that 
 a person is a bona fide qualified purchaser for 
 purposes of this paragraph or a bona fide beneficial 
 owner for purposes of paragraph (1).
 (9) Any person substantially all of whose business 
 consists of owning or holding oil, gas, or other 
 mineral royalties or leases, or fractional interests 
 therein, or certificates of interest or participation 
 in or investment contracts relative to such royalties, 
 leases, or fractional interests.
 (10)(A) Any company organized and operated 
 exclusively for religious, educational, benevolent, 
 fraternal, charitable, or reformatory purposes--
 (i) no part of the net earnings of which 
 inures to the benefit of any private 
 shareholder or individual; or
 (ii) which is or maintains a fund described 
 in subparagraph (B).
 (B) For the purposes of subparagraph (A)(ii), a fund 
 is described in this subparagraph if such fund is a 
 pooled income fund, collective trust fund, collective 
 investment fund, or similar fund maintained by a 
 charitable organization exclusively for the collective 
 investment and reinvestment of one or more of the 
 following:
 (i) assets of the general endowment fund or 
 other funds of one or more charitable 
 organizations;
 (ii) assets of a pooled income fund;
 (iii) assets contributed to a charitable 
 organization in exchange for the issuance of 
 charitable gift annuities;
 (iv) assets of a charitable remainder trust 
 or of any other trust, the remainder interests 
 of which are irrevocably dedicated to any 
 charitable organization;
 (v) assets of a charitable lead trust;
 (vi) assets of a trust, the remainder 
 interests of which are revocably dedicated to 
 or for the benefit of 1 or more charitable 
 organizations, if the ability to revoke the 
 dedication is limited to circumstances 
 involving--
 (I) an adverse change in the 
 financial circumstances of a settlor or 
 an income beneficiary of the trust;
 (II) a change in the identity of the 
 charitable organization or 
 organizations having the remainder 
 interest, provided that the new 
 beneficiary is also a charitable 
 organization; or
 (III) both the changes described in 
 subclauses (I) and (II);
 (vii) assets of a trust not described in 
 clauses (i) through (v), the remainder 
 interests of which are revocably dedicated to a 
 charitable organization, subject to 
 subparagraph (C); or
 (viii) such assets as the Commission may 
 prescribe by rule, regulation, or order in 
 accordance with section 6(c).
 (C) A fund that contains assets described in clause 
 (vii) of subparagraph (B) shall be excluded from the 
 definition of an investment company for a period of 3 
 years after the date of enactment of this subparagraph, 
 but only if--
 (i) such assets were contributed before the 
 date which is 60 days after the date of 
 enactment of this subparagraph; and
 (ii) such assets are commingled in the fund 
 with assets described in one or more of clauses 
 (i) through (vi) and (viii) of subparagraph 
 (B).
 (D) For purposes of this paragraph--
 (i) a trust or fund is ``maintained'' by a 
 charitable organization if the organization 
 serves as a trustee or administrator of the 
 trust or fund or has the power to remove the 
 trustees or administrators of the trust or fund 
 and to designate new trustees or 
 administrators;
 (ii) the term ``pooled income fund'' has the 
 same meaning as in section 642(c)(5) of the 
 Internal Revenue Code of 1986;
 (iii) the term ``charitable organization'' 
 means an organization described in paragraphs 
 (1) through (5) of section 170(c) or section 
 501(c)(3) of the Internal Revenue Code of 1986;
 (iv) the term ``charitable lead trust'' means 
 a trust described in section 170(f)(2)(B), 
 2055(e)(2)(B), or 2522(c)(2)(B) of the Internal 
 Revenue Code of 1986;
 (v) the term ``charitable remainder trust'' 
 means a charitable remainder annuity trust or a 
 charitable remainder unitrust, as those terms 
 are defined in section 664(d) of the Internal 
 Revenue Code of 1986; and
 (vi) the term ``charitable gift annuity'' 
 means an annuity issued by a charitable 
 organization that is described in section 
 501(m)(5) of the Internal Revenue Code of 1986.
 [(11) Any employee's stock bonus, pension, or profit-
 sharing trust which meets the requirements for 
 qualification under section 401 of the Internal Revenue 
 Code of 1986; or any governmental plan described in 
 section 3(a)(2)(C) of the Securities Act of 1933; or 
 any collective trust fund maintained by a bank 
 consisting solely of assets of one or more of such 
 trusts, government plans, or church plans, companies or 
 accounts that are excluded from the definition of an 
 investment company under paragraph (14) of this 
 subsection; or any separate account the assets of which 
 are derived solely from (A) contributions under pension 
 or profit-sharing plans which meet the requirements of 
 section 401 of the Internal Revenue Code of 1986 or the 
 requirements for deduction of the employer's 
 contribution under section 404(a)(2) of such Code, (B) 
 contributions under governmental plans in connection 
 with which interests, participations, or securities are 
 exempted from the registration provisions of section 5 
 of the Securities Act of 1933 by section 3(a)(2)(C) of 
 such Act, and (C) advances made by an insurance company 
 in connection with the operation of such separate 
 account.]
 (11) Any--
 (A) trust forming part of an employee's stock 
 bonus, pension, or profit-sharing plan which 
 meets the requirements for qualification under 
 section 401 of the Internal Revenue Code of 
 1986;
 (B) custodial account meeting the 
 requirements of section 403(b)(7) of such Code;
 (C) governmental plan described in section 
 3(a)(2)(C) of the Securities Act of 1933 (15 
 U.S.C. 77c(a)(2)(C));
 (D) collective trust fund maintained by a 
 bank consisting solely of assets of one or 
 more--
 (i) trusts described in subparagraph 
 (A);
 (ii) governmental plans described in 
 subparagraph (C);
 (iii) church plans, companies, or 
 accounts that are excluded from the 
 definition of an investment company 
 under paragraph (14) of this 
 subsection; or
 (iv) plans which meet the 
 requirements of section 403(b) of the 
 Internal Revenue Code of 1986--
 (I) if--
 (aa) such plan is 
 subject to title I of 
 the Employee Retirement 
 Income Security Act of 
 1974 (29 U.S.C. 1001 et 
 seq.);
 (bb) any employer 
 making such plan 
 available agrees to 
 serve as a fiduciary 
 for the plan with 
 respect to the 
 selection of the plan's 
 investments among which 
 participants can 
 choose; or
 (cc) such plan is a 
 governmental plan (as 
 defined in section 
 414(d) of such Code); 
 and
 (II) if the employer, a 
 fiduciary of the plan, or 
 another person acting on behalf 
 of the employer reviews and 
 approves each investment 
 alternative offered under such 
 plan described under subclause 
 (I)(cc) prior to the investment 
 being offered to participants 
 in the plan; or
 (E) separate account the assets of which are 
 derived solely from--
 (i) contributions under pension or 
 profit-sharing plans which meet the 
 requirements of section 401 of the 
 Internal Revenue Code of 1986 or the 
 requirements for deduction of the 
 employer's contribution under section 
 404(a)(2) of such Code;
 (ii) contributions under governmental 
 plans in connection with which 
 interests, participations, or 
 securities are exempted from the 
 registration provisions of section 5 of 
 the Securities Act of 1933 (15 U.S.C. 
 77e) by section 3(a)(2)(C) of such Act 
 (15 U.S.C. 77c(a)(2)(C));
 (iii) advances made by an insurance 
 company in connection with the 
 operation of such separate account; and
 (iv) contributions to a plan 
 described in clause (iii) or (iv) of 
 subparagraph (D).
 (12) Any voting trust the assets of which consist 
 exclusively of securities of a single issuer which is 
 not an investment company.
 (13) Any security holders' protective committee or 
 similar issuer having outstanding and issuing no 
 securities other than certificates of deposit and 
 short-term paper.
 (14) Any church plan described in section 414(e) of 
 the Internal Revenue Code of 1986, if, under any such 
 plan, no part of the assets may be used for, or 
 diverted to, purposes other than the exclusive benefit 
 of plan participants or beneficiaries, or any company 
 or account that is--
 (A) established by a person that is eligible 
 to establish and maintain such a plan under 
 section 414(e) of the Internal Revenue Code of 
 1986; and
 (B) substantially all of the activities of 
 which consist of--
 (i) managing or holding assets 
 contributed to such church plans or 
 other assets which are permitted to be 
 commingled with the assets of church 
 plans under the Internal Revenue Code 
 of 1986; or
 (ii) administering or providing 
 benefits pursuant to church plans.

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 ---------- 

 SECURITIES ACT OF 1933

TITLE I--

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 exempted securities

 Sec. 3. (a) Except as hereinafter expressly provided, the 
provisions of this title shall not apply to any of the 
following classes of securities:
 (1) Reserved.
 (2) Any security issued or guaranteed by the United 
 States or any Territory thereof, or by the District of 
 Columbia, or by any State of the United States, or by 
 any political subdivision of a State or Territory, or 
 by any public instrumentality of one or more States or 
 Territories, or by any person controlled or supervised 
 by and acting as an instrumentality of the Government 
 of the United States pursuant to authority granted by 
 the Congress of the United States; or any certificate 
 of deposit for any of the foregoing; or any security 
 issued or guaranteed by any bank; or any security 
 issued by or representing an interest in or a direct 
 obligation of a Federal Reserve bank; or any interest 
 or participation in any common trust fund or similar 
 fund that is excluded from the definition of the term 
 ``investment company'' under section 3(c)(3) of the 
 Investment Company Act of 1940; or any security which 
 is an industrial development bond (as defined in 
 section 103(c)(2) of the Internal Revenue Code of 1954) 
 the interest on which is excludable from gross income 
 under section 103(a)(1) of such Code if, by reason of 
 the application of paragraph (4) or (6) of section 
 103(c) of such Code (determined as if paragraphs 
 (4)(A), (5), and (7) were not included in such section 
 103(c)), paragraph (1) of such section 103(c) does not 
 apply to such security; or any interest or 
 participation in a single trust fund, or in a 
 collective trust fund maintained by a bank, or any 
 security arising out of a contract issued by an 
 insurance company, which interest, participation, or 
 security is issued in connection with (A) a stock 
 bonus, pension, or profit-sharing plan which meets the 
 requirements for qualification under section 401 of the 
 Internal Revenue Code of 1954, (B) an annuity plan 
 which meets the requirements for the deduction of the 
 employer's contributions under section 404(a)(2) of 
 such Code, (C) a governmental plan as defined in 
 section 414(d) of such Code which has been established 
 by an employer for the exclusive benefit of its 
 employees or their beneficiaries for the purpose of 
 distributing to such employees or their beneficiaries 
 the corpus and income of the funds accumulated under 
 such plan, if under such plan it is impossible, prior 
 to the satisfaction of all liabilities with respect to 
 such employees and their beneficiaries, for any part of 
 the corpus or income to be used for, or diverted to, 
 purposes other than the exclusive benefit of such 
 employees or their [beneficiaries, or (D)] 
 beneficiaries, (D) a plan which meets the requirements 
 of section 403(b) of such Code (i) if (I) such plan is 
 subject to title I of the Employee Retirement Income 
 Security Act of 1974 (29 U.S.C. 1001 et seq.), (II) any 
 employer making such plan available agrees to serve as 
 a fiduciary for the plan with respect to the selection 
 of the plan's investments among which participants can 
 choose, or (III) such plan is a governmental plan (as 
 defined in section 414(d) of such Code), and (ii) if 
 the employer, a fiduciary of the plan, or another 
 person acting on behalf of the employer reviews and 
 approves each investment alternative offered under any 
 plan described under clause (i)(III) prior to the 
 investment being offered to participants in the plan, 
 or (E) a church plan, company, or account that is 
 excluded from the definition of an investment company 
 under section 3(c)(14) of the Investment Company Act of 
 1940, other than any plan described in subparagraph 
 (A), (B), [(C), or (D)] (C), (D), or (E) of this 
 paragraph (i) the contributions under which are held in 
 a single trust fund or in a separate account maintained 
 by an insurance company for a single employer and under 
 which an amount in excess of the employer's 
 contribution is allocated to the purchase of securities 
 (other than interests or participations in the trust or 
 separate account itself) issued by the employer or any 
 company directly or indirectly controlling, controlled 
 by, or under common control with the employer, (ii) 
 which covers employees some or all of whom are 
 employees within the meaning of section 401(c)(1) of 
 such Code (other than a person participating in a 
 church plan who is described in section 414(e)(3)(B) of 
 the Internal Revenue Code of 1986), or [(iii) which is 
 a plan funded by an annuity contract described in 
 section 403(b) of such Code (other than a retirement 
 income account described in section 403(b)(9) of the 
 Internal Revenue Code of 1986, to the extent that the 
 interest or participation in such single trust fund or 
 collective trust fund is issued to a church, a 
 convention or association of churches, or an 
 organization described in section 414(e)(3)(A) of such 
 Code establishing or maintaining the retirement income 
 account or to a trust established by any such entity in 
 connection with the retirement income account).] (iii) 
 in the case of a plan not described in subparagraph (D) 
 or (E), which is a plan funded by an annuity contract 
 described in section 403(b) of such Code. The 
 Commission, by rules and regulations or order, shall 
 exempt from the provisions of section 5 of this title 
 any interest or participation issued in connection with 
 a stock bonus, pension, profit-sharing, or annuity plan 
 which covers employees some or all of whom are 
 employees within the meaning of section 401(c)(1) of 
 the Internal Revenue Code of 1954, if and to the extent 
 that the Commission determines this to be necessary or 
 appropriate in the public interest and consistent with 
 the protection of investors and the purposes fairly 
 intended by the policy and provisions of this title. 
 For purposes of this paragraph, a security issued or 
 guaranteed by a bank shall not include any interest or 
 participation in any collective trust fund maintained 
 by a bank; and the term ``bank'' means any national 
 bank, or any banking institution organized under the 
 laws of any State, territory, or the District of 
 Columbia, the business of which is substantially 
 confined to banking and is supervised by the State or 
 territorial banking commission or similar official; 
 except that in the case of a common trust fund or 
 similar fund, or a collective trust fund, the term 
 ``bank'' has the same meaning as in the Investment 
 Company Act of 1940;
 (3) Any note, draft, bill of exchange, or banker's 
 acceptance which arises out of a current transaction or 
 the proceeds of which have been or are to be used for 
 current transactions, and which has a maturity at the 
 time of issuance of not exceeding nine months, 
 exclusive of days of grace, or any renewal thereof the 
 maturity of which is likewise limited;
 (4) Any security issued by a person organized and 
 operated exclusively for religious, educational, 
 benevolent, fraternal, charitable, or reformatory 
 purposes and not for pecuniary profit, and no part of 
 the net earnings of which inures to the benefit of any 
 person, private stockholder, or individual, or any 
 security of a fund that is excluded from the definition 
 of an investment company under section 3(c)(10)(B) of 
 the Investment Company Act of 1940;
 (5) Any security issued (A) by a savings and loan 
 association, building and loan association, cooperative 
 bank, homestead association, or similar institution, 
 which is supervised and examined by State or Federal 
 authority having supervision over any such institution; 
 or (B) by (i) a farmer's cooperative organization 
 exempt from tax under section 521 of the Internal 
 Revenue Code of 1954, (ii) a corporation described in 
 section 501(c)(16) of such Code and exempt from tax 
 under section 501(a) of such Code, or (iii) a 
 corporation described in section 501(c)(2) of such Code 
 which is exempt from tax under section 501(a) of such 
 Code and is organized for the exclusive purpose of 
 holding title to property, collecting income therefrom, 
 and turning over the entire amount thereof, less 
 expenses, to an organization or corporation described 
 in clause (i) or (ii);
 (6) Any interest in a railroad equipment trust. For 
 purposes of this paragraph ``interest in a railroad 
 equipment trust'' means any interest in an equipment 
 trust, lease, conditional sales contract, or other 
 similar arrangement entered into, issued, assumed, 
 guaranteed by, or for the benefit of, a common carrier 
 to finance the acquisition of rolling stock, including 
 motive power;
 (7) Certificates issued by a receiver or by a trustee 
 in bankruptcy, with the approval of the court;
 (8) Any insurance or endowment policy or annuity 
 contract or optional annuity contract, issued by a 
 corporation subject to the supervision of the insurance 
 commissioner, bank commissioner, or any agency or 
 officer performing like functions, of any State or 
 Territory of the United States or the District of 
 Columbia;
 (9) Except with respect to a security exchanged in a 
 case under title 11, any security exchanged by the 
 issuer with its existing security holders exclusively 
 where no commission or other remuneration is paid or 
 given directly or indirectly for soliciting such 
 exchange;
 (10) Except with respect to a security exchanged in a 
 case under title 11, any security which is issued in 
 exchange for one or more bona fide outstanding 
 securities, claims or property interests, or partly in 
 such exchange and partly for cash, where the terms and 
 conditions of such issuance and exchange are approved, 
 after a hearing upon the fairness of such terms and 
 conditions at which all persons to whom it is proposed 
 to issue securities in such exchange shall have the 
 right to appear, by any court, or by any official or 
 agency of the United States, or by any State or 
 Territorial banking or insurance commission or other 
 governmental authority expressly authorized by law to 
 grant such approval;
 (11) Any security which is a part of an issue offered 
 and sold only to persons resident within a single State 
 or Territory, where the issuer of such security is a 
 person resident and doing business within or, if a 
 corporation, incorporated by and doing business within, 
 such State or Territory.
 (12) Any equity security issued in connection with 
 the acquisition by a holding company of a bank under 
 section 3(a) of the Bank Holding Company Act of 1956 or 
 a savings association under section 10(e) of the Home 
 Owners' Loan Act, if--
 (A) the acquisition occurs solely as part of 
 a reorganization in which security holders 
 exchange their shares of a bank or savings 
 association for shares of a newly formed 
 holding company with no significant assets 
 other than securities of the bank or savings 
 association and the existing subsidiaries of 
 the bank or savings association;
 (B) the security holders receive, after that 
 reorganization, substantially the same 
 proportional share interests in the holding 
 company as they held in the bank or savings 
 association, except for nominal changes in 
 shareholders' interests resulting from lawful 
 elimination of fractional interests and the 
 exercise of dissenting shareholders' rights 
 under State or Federal law;
 (C) the rights and interests of security 
 holders in the holding company are 
 substantially the same as those in the bank or 
 savings association prior to the transaction, 
 other than as may be required by law; and
 (D) the holding company has substantially the 
 same assets and liabilities, on a consolidated 
 basis, as the bank or savings association had 
 prior to the transaction.
 For purposes of this paragraph, the term ``savings 
 association'' means a savings association (as defined 
 in section 3(b) of the Federal Deposit Insurance Act) 
 the deposits of which are insured by the Federal 
 Deposit Insurance Corporation.
 (13) Any security issued by or any interest or 
 participation in any church plan, company or account 
 that is excluded from the definition of an investment 
 company under section 3(c)(14) of the Investment 
 Company Act of 1940.
 (14) Any security futures product that is--
 (A) cleared by a clearing agency registered 
 under section 17A of the Securities Exchange 
 Act of 1934 or exempt from registration under 
 subsection (b)(7) of such section 17A; and
 (B) traded on a national securities exchange 
 or a national securities association registered 
 pursuant to section 15A(a) of the Securities 
 Exchange Act of 1934.
 (b) Additional Exemptions.--
 (1) Small issues exemptive authority.--The Commission 
 may from time to time by its rules and regulations, and 
 subject to such terms and conditions as may be 
 prescribed therein, add any class of securities to the 
 securities exempted as provided in this section, if it 
 finds that the enforcement of this title with respect 
 to such securities is not necessary in the public 
 interest and for the protection of investors by reason 
 of the small amount involved or the limited character 
 of the public offering; but no issue of securities 
 shall be exempted under this subsection where the 
 aggregate amount at which such issue is offered to the 
 public exceeds $5,000,000.
 (2) Additional issues.--The Commission shall by rule 
 or regulation add a class of securities to the 
 securities exempted pursuant to this section in 
 accordance with the following terms and conditions:
 (A) The aggregate offering amount of all 
 securities offered and sold within the prior 
 12-month period in reliance on the exemption 
 added in accordance with this paragraph shall 
 not exceed $50,000,000.
 (B) The securities may be offered and sold 
 publicly.
 (C) The securities shall not be restricted 
 securities within the meaning of the Federal 
 securities laws and the regulations promulgated 
 thereunder.
 (D) The civil liability provision in section 
 12(a)(2) shall apply to any person offering or 
 selling such securities.
 (E) The issuer may solicit interest in the 
 offering prior to filing any offering 
 statement, on such terms and conditions as the 
 Commission may prescribe in the public interest 
 or for the protection of investors.
 (F) The Commission shall require the issuer 
 to file audited financial statements with the 
 Commission annually.
 (G) Such other terms, conditions, or 
 requirements as the Commission may determine 
 necessary in the public interest and for the 
 protection of investors, which may include--
 (i) a requirement that the issuer 
 prepare and electronically file with 
 the Commission and distribute to 
 prospective investors an offering 
 statement, and any related documents, 
 in such form and with such content as 
 prescribed by the Commission, including 
 audited financial statements, a 
 description of the issuer's business 
 operations, its financial condition, 
 its corporate governance principles, 
 its use of investor funds, and other 
 appropriate matters; and
 (ii) disqualification provisions 
 under which the exemption shall not be 
 available to the issuer or its 
 predecessors, affiliates, officers, 
 directors, underwriters, or other 
 related persons, which shall be 
 substantially similar to the 
 disqualification provisions contained 
 in the regulations adopted in 
 accordance with section 926 of the 
 Dodd-Frank Wall Street Reform and 
 Consumer Protection Act (15 U.S.C. 77d 
 note).
 (3) Limitation.--Only the following types of 
 securities may be exempted under a rule or regulation 
 adopted pursuant to paragraph (2): equity securities, 
 debt securities, and debt securities convertible or 
 exchangeable to equity interests, including any 
 guarantees of such securities.
 (4) Periodic disclosures.--Upon such terms and 
 conditions as the Commission determines necessary in 
 the public interest and for the protection of 
 investors, the Commission by rule or regulation may 
 require an issuer of a class of securities exempted 
 under paragraph (2) to make available to investors and 
 file with the Commission periodic disclosures regarding 
 the issuer, its business operations, its financial 
 condition, its corporate governance principles, its use 
 of investor funds, and other appropriate matters, and 
 also may provide for the suspension and termination of 
 such a requirement with respect to that issuer.
 (5) Adjustment.--Not later than 2 years after the 
 date of enactment of the Small Company Capital 
 Formation Act of 2011 and every 2 years thereafter, the 
 Commission shall review the offering amount limitation 
 described in paragraph (2)(A) and shall increase such 
 amount as the Commission determines appropriate. If the 
 Commission determines not to increase such amount, it 
 shall report to the Committee on Financial Services of 
 the House of Representatives and the Committee on 
 Banking, Housing, and Urban Affairs of the Senate on 
 its reasons for not increasing the amount.
 (c) The Commission may from time to time by its rules and 
regulations and subject to such terms and conditions as may be 
prescribed therein, add to the securities exempted as provided 
in this section any class of securities issued by a small 
business investment company under the Small Business Investment 
Act of 1958 if it finds, having regard to the purposes of that 
Act, that the enforcement of this Act with respect to such 
securities is not necessary in the public interest and for the 
protection of investors.

 * * * * * * *

 ---------- 

 SECURITIES EXCHANGE ACT OF 1934

TITLE I--REGULATION OF SECURITIES EXCHANGES

 * * * * * * *

 definitions and application of title

 Sec. 3. (a) When used in this title, unless the context 
otherwise requires--
 (1) The term ``exchange'' means any organization, 
 association, or group of persons, whether incorporated 
 or unincorporated, which constitutes, maintains, or 
 provides a market place or facilities for bringing 
 together purchasers and sellers of securities or for 
 otherwise performing with respect to securities the 
 functions commonly performed by a stock exchange as 
 that term is generally understood, and includes the 
 market place and the market facilities maintained by 
 such exchange.
 (2) The term ``facility'' when used with respect to 
 an exchange includes its premises, tangible or 
 intangible property whether on the premises or not, any 
 right to the use of such premises or property or any 
 service thereof for the purpose of effecting or 
 reporting a transaction on an exchange (including, 
 among other things, any system of communication to or 
 from the exchange, by ticker or otherwise, maintained 
 by or with the consent of the exchange), and any right 
 of the exchange to the use of any property or service.
 (3)(A) The term ``member'' when used with respect to 
 a national securities exchange means (i) any natural 
 person permitted to effect transactions on the floor of 
 the exchange without the services of another person 
 acting as broker, (ii) any registered broker or dealer 
 with which such a natural person is associated, (iii) 
 any registered broker or dealer permitted to designate 
 as a representative such a natural person, and (iv) any 
 other registered broker or dealer which agrees to be 
 regulated by such exchange and with respect to which 
 the exchange undertakes to enforce compliance with the 
 provisions of this title, the rules and regulations 
 thereunder, and its own rules. For purposes of sections 
 6(b)(1), 6(b)(4), 6(b)(6), 6(b)(7), 6(d), 17(d), 19(d), 
 19(e), 19(g), 19(h), and 21 of this title, the term 
 ``member'' when used with respect to a national 
 securities exchange also means, to the extent of the 
 rules of the exchange specified by the Commission, any 
 person required by the Commission to comply with such 
 rules pursuant to section 6(f) of this title.
 (B) The term ``member'' when used with respect to a 
 registered securities association means any broker or 
 dealer who agrees to be regulated by such association 
 and with respect to whom the association undertakes to 
 enforce compliance with the provisions of this title, 
 the rules and regulations thereunder, and its own 
 rules.
 (4) Broker.--
 (A) In general.--The term ``broker'' means 
 any person engaged in the business of effecting 
 transactions in securities for the account of 
 others.
 (B) Exception for certain bank activities.--A 
 bank shall not be considered to be a broker 
 because the bank engages in any one or more of 
 the following activities under the conditions 
 described:
 (i) Third party brokerage 
 arrangements.--The bank enters into a 
 contractual or other written 
 arrangement with a broker or dealer 
 registered under this title under which 
 the broker or dealer offers brokerage 
 services on or off the premises of the 
 bank if--
 (I) such broker or dealer is 
 clearly identified as the 
 person performing the brokerage 
 services;
 (II) the broker or dealer 
 performs brokerage services in 
 an area that is clearly marked 
 and, to the extent practicable, 
 physically separate from the 
 routine deposit-taking 
 activities of the bank;
 (III) any materials used by 
 the bank to advertise or 
 promote generally the 
 availability of brokerage 
 services under the arrangement 
 clearly indicate that the 
 brokerage services are being 
 provided by the broker or 
 dealer and not by the bank;
 (IV) any materials used by 
 the bank to advertise or 
 promote generally the 
 availability of brokerage 
 services under the arrangement 
 are in compliance with the 
 Federal securities laws before 
 distribution;
 (V) bank employees (other 
 than associated persons of a 
 broker or dealer who are 
 qualified pursuant to the rules 
 of a self-regulatory 
 organization) perform only 
 clerical or ministerial 
 functions in connection with 
 brokerage transactions 
 including scheduling 
 appointments with the 
 associated persons of a broker 
 or dealer, except that bank 
 employees may forward customer 
 funds or securities and may 
 describe in general terms the 
 types of investment vehicles 
 available from the bank and the 
 broker or dealer under the 
 arrangement;
 (VI) bank employees do not 
 receive incentive compensation 
 for any brokerage transaction 
 unless such employees are 
 associated persons of a broker 
 or dealer and are qualified 
 pursuant to the rules of a 
 self-regulatory organization, 
 except that the bank employees 
 may receive compensation for 
 the referral of any customer if 
 the compensation is a nominal 
 one-time cash fee of a fixed 
 dollar amount and the payment 
 of the fee is not contingent on 
 whether the referral results in 
 a transaction;
 (VII) such services are 
 provided by the broker or 
 dealer on a basis in which all 
 customers that receive any 
 services are fully disclosed to 
 the broker or dealer;
 (VIII) the bank does not 
 carry a securities account of 
 the customer except as 
 permitted under clause (ii) or 
 (viii) of this subparagraph; 
 and
 (IX) the bank, broker, or 
 dealer informs each customer 
 that the brokerage services are 
 provided by the broker or 
 dealer and not by the bank and 
 that the securities are not 
 deposits or other obligations 
 of the bank, are not guaranteed 
 by the bank, and are not 
 insured by the Federal Deposit 
 Insurance Corporation.
 (ii) Trust activities.--The bank 
 effects transactions in a trustee 
 capacity, or effects transactions in a 
 fiduciary capacity in its trust 
 department or other department that is 
 regularly examined by bank examiners 
 for compliance with fiduciary 
 principles and standards, and--
 (I) is chiefly compensated 
 for such transactions, 
 consistent with fiduciary 
 principles and standards, on 
 the basis of an administration 
 or annual fee (payable on a 
 monthly, quarterly, or other 
 basis), a percentage of assets 
 under management, or a flat or 
 capped per order processing fee 
 equal to not more than the cost 
 incurred by the bank in 
 connection with executing 
 securities transactions for 
 trustee and fiduciary 
 customers, or any combination 
 of such fees; and
 (II) does not publicly 
 solicit brokerage business, 
 other than by advertising that 
 it effects transactions in 
 securities in conjunction with 
 advertising its other trust 
 activities.
 (iii) Permissible securities 
 transactions.--The bank effects 
 transactions in--
 (I) commercial paper, bankers 
 acceptances, or commercial 
 bills;
 (II) exempted securities;
 (III) qualified Canadian 
 government obligations as 
 defined in section 5136 of the 
 Revised Statutes, in conformity 
 with section 15C of this title 
 and the rules and regulations 
 thereunder, or obligations of 
 the North American Development 
 Bank; or
 (IV) any standardized, credit 
 enhanced debt security issued 
 by a foreign government 
 pursuant to the March 1989 plan 
 of then Secretary of the 
 Treasury Brady, used by such 
 foreign government to retire 
 outstanding commercial bank 
 loans.
 (iv) Certain stock purchase plans.--
 (I) Employee benefit plans.--
 The bank effects transactions, 
 as part of its transfer agency 
 activities, in the securities 
 of an issuer as part of any 
 pension, retirement, profit-
 sharing, bonus, thrift, 
 savings, incentive, or other 
 similar benefit plan for the 
 employees of that issuer or its 
 affiliates (as defined in 
 section 2 of the Bank Holding 
 Company Act of 1956), if the 
 bank does not solicit 
 transactions or provide 
 investment advice with respect 
 to the purchase or sale of 
 securities in connection with 
 the plan.
 (II) Dividend reinvestment 
 plans.--The bank effects 
 transactions, as part of its 
 transfer agency activities, in 
 the securities of an issuer as 
 part of that issuer's dividend 
 reinvestment plan, if--
 (aa) the bank does 
 not solicit 
 transactions or provide 
 investment advice with 
 respect to the purchase 
 or sale of securities 
 in connection with the 
 plan; and
 (bb) the bank does 
 not net shareholders' 
 buy and sell orders, 
 other than for programs 
 for odd-lot holders or 
 plans registered with 
 the Commission.
 (III) Issuer plans.--The bank 
 effects transactions, as part 
 of its transfer agency 
 activities, in the securities 
 of an issuer as part of a plan 
 or program for the purchase or 
 sale of that issuer's shares, 
 if--
 (aa) the bank does 
 not solicit 
 transactions or provide 
 investment advice with 
 respect to the purchase 
 or sale of securities 
 in connection with the 
 plan or program; and
 (bb) the bank does 
 not net shareholders' 
 buy and sell orders, 
 other than for programs 
 for odd-lot holders or 
 plans registered with 
 the Commission.
 (IV) Permissible delivery of 
 materials.--The exception to 
 being considered a broker for a 
 bank engaged in activities 
 described in subclauses (I), 
 (II), and (III) will not be 
 affected by delivery of written 
 or electronic plan materials by 
 a bank to employees of the 
 issuer, shareholders of the 
 issuer, or members of affinity 
 groups of the issuer, so long 
 as such materials are--
 (aa) comparable in 
 scope or nature to that 
 permitted by the 
 Commission as of the 
 date of the enactment 
 of the Gramm-Leach-
 Bliley Act; or
 (bb) otherwise 
 permitted by the 
 Commission.
 (v) Sweep accounts.--The bank effects 
 transactions as part of a program for 
 the investment or reinvestment of 
 deposit funds into any no-load, open-
 end management investment company 
 registered under the Investment Company 
 Act of 1940 that holds itself out as a 
 money market fund.
 (vi) Affiliate transactions.--The 
 bank effects transactions for the 
 account of any affiliate of the bank 
 (as defined in section 2 of the Bank 
 Holding Company Act of 1956) other 
 than--
 (I) a registered broker or 
 dealer; or
 (II) an affiliate that is 
 engaged in merchant banking, as 
 described in section 4(k)(4)(H) 
 of the Bank Holding Company Act 
 of 1956.
 (vii) Private securities offerings.--
 The bank--
 (I) effects sales as part of 
 a primary offering of 
 securities not involving a 
 public offering, pursuant to 
 section 3(b), 4(2), or 4(5) of 
 the Securities Act of 1933 or 
 the rules and regulations 
 issued thereunder;
 (II) at any time after the 
 date that is 1 year after the 
 date of the enactment of the 
 Gramm-Leach-Bliley Act, is not 
 affiliated with a broker or 
 dealer that has been registered 
 for more than 1 year in 
 accordance with this Act, and 
 engages in dealing, market 
 making, or underwriting 
 activities, other than with 
 respect to exempted securities; 
 and
 (III) if the bank is not 
 affiliated with a broker or 
 dealer, does not effect any 
 primary offering described in 
 subclause (I) the aggregate 
 amount of which exceeds 25 
 percent of the capital of the 
 bank, except that the 
 limitation of this subclause 
 shall not apply with respect to 
 any sale of government 
 securities or municipal 
 securities.
 (viii) Safekeeping and custody 
 activities.--
 (I) In general.--The bank, as 
 part of customary banking 
 activities--
 (aa) provides 
 safekeeping or custody 
 services with respect 
 to securities, 
 including the exercise 
 of warrants and other 
 rights on behalf of 
 customers;
 (bb) facilitates the 
 transfer of funds or 
 securities, as a 
 custodian or a clearing 
 agency, in connection 
 with the clearance and 
 settlement of its 
 customers' transactions 
 in securities;
 (cc) effects 
 securities lending or 
 borrowing transactions 
 with or on behalf of 
 customers as part of 
 services provided to 
 customers pursuant to 
 division (aa) or (bb) 
 or invests cash 
 collateral pledged in 
 connection with such 
 transactions;
 (dd) holds securities 
 pledged by a customer 
 to another person or 
 securities subject to 
 purchase or resale 
 agreements involving a 
 customer, or 
 facilitates the 
 pledging or transfer of 
 such securities by book 
 entry or as otherwise 
 provided under 
 applicable law, if the 
 bank maintains records 
 separately identifying 
 the securities and the 
 customer; or
 (ee) serves as a 
 custodian or provider 
 of other related 
 administrative services 
 to any individual 
 retirement account, 
 pension, retirement, 
 profit sharing, bonus, 
 thrift savings, 
 incentive, or other 
 similar benefit plan.
 (II) Exception for carrying 
 broker activities.--The 
 exception to being considered a 
 broker for a bank engaged in 
 activities described in 
 subclause (I) shall not apply 
 if the bank, in connection with 
 such activities, acts in the 
 United States as a carrying 
 broker (as such term, and 
 different formulations thereof, 
 are used in section 15(c)(3) of 
 this title and the rules and 
 regulations thereunder) for any 
 broker or dealer, unless such 
 carrying broker activities are 
 engaged in with respect to 
 government securities (as 
 defined in paragraph (42) of 
 this subsection).
 (ix) Identified banking products.--
 The bank effects transactions in 
 identified banking products as defined 
 in section 206 of the Gramm-Leach-
 Bliley Act.
 (x) Municipal securities.--The bank 
 effects transactions in municipal 
 securities.
 (xi) De minimis exception.--The bank 
 effects, other than in transactions 
 referred to in clauses (i) through (x), 
 not more than 500 transactions in 
 securities in any calendar year, and 
 such transactions are not effected by 
 an employee of the bank who is also an 
 employee of a broker or dealer.
 (C) Execution by broker or dealer.--The 
 exception to being considered a broker for a 
 bank engaged in activities described in clauses 
 (ii), (iv), and (viii) of subparagraph (B) 
 shall not apply if the activities described in 
 such provisions result in the trade in the 
 United States of any security that is a 
 publicly traded security in the United States, 
 unless--
 (i) the bank directs such trade to a 
 registered broker or dealer for 
 execution;
 (ii) the trade is a cross trade or 
 other substantially similar trade of a 
 security that--
 (I) is made by the bank or 
 between the bank and an 
 affiliated fiduciary; and
 (II) is not in contravention 
 of fiduciary principles 
 established under applicable 
 Federal or State law; or
 (iii) the trade is conducted in some 
 other manner permitted under rules, 
 regulations, or orders as the 
 Commission may prescribe or issue.
 (D) Fiduciary capacity.--For purposes of 
 subparagraph (B)(ii), the term ``fiduciary 
 capacity'' means--
 (i) in the capacity as trustee, 
 executor, administrator, registrar of 
 stocks and bonds, transfer agent, 
 guardian, assignee, receiver, or 
 custodian under a uniform gift to minor 
 act, or as an investment adviser if the 
 bank receives a fee for its investment 
 advice;
 (ii) in any capacity in which the 
 bank possesses investment discretion on 
 behalf of another; or
 (iii) in any other similar capacity.
 (E) Exception for entities subject to section 
 15(e).--The term ``broker'' does not include a 
 bank that--
 (i) was, on the day before the date 
 of enactment of the Gramm-Leach-Bliley 
 Act, subject to section 15(e); and
 (ii) is subject to such restrictions 
 and requirements as the Commission 
 considers appropriate.
 (F) Joint rulemaking required.--The 
 Commission and the Board of Governors of the 
 Federal Reserve System shall jointly adopt a 
 single set of rules or regulations to implement 
 the exceptions in subparagraph (B).
 (5) Dealer.--
 (A) In general.--The term ``dealer'' means 
 any person engaged in the business of buying 
 and selling securities (not including security-
 based swaps, other than security-based swaps 
 with or for persons that are not eligible 
 contract participants) for such person's own 
 account through a broker or otherwise.
 (B) Exception for person not engaged in the 
 business of dealing.--The term ``dealer'' does 
 not include a person that buys or sells 
 securities (not including security-based swaps, 
 other than security-based swaps with or for 
 persons that are not eligible contract 
 participants) for such person's own account, 
 either individually or in a fiduciary capacity, 
 but not as a part of a regular business.
 (C) Exception for certain bank activities.--A 
 bank shall not be considered to be a dealer 
 because the bank engages in any of the 
 following activities under the conditions 
 described:
 (i) Permissible securities 
 transactions.--The bank buys or sells--
 (I) commercial paper, bankers 
 acceptances, or commercial 
 bills;
 (II) exempted securities;
 (III) qualified Canadian 
 government obligations as 
 defined in section 5136 of the 
 Revised Statutes of the United 
 States, in conformity with 
 section 15C of this title and 
 the rules and regulations 
 thereunder, or obligations of 
 the North American Development 
 Bank; or
 (IV) any standardized, credit 
 enhanced debt security issued 
 by a foreign government 
 pursuant to the March 1989 plan 
 of then Secretary of the 
 Treasury Brady, used by such 
 foreign government to retire 
 outstanding commercial bank 
 loans.
 (ii) Investment, trustee, and 
 fiduciary transactions.--The bank buys 
 or sells securities for investment 
 purposes--
 (I) for the bank; or
 (II) for accounts for which 
 the bank acts as a trustee or 
 fiduciary.
 (iii) Asset-backed transactions.--The 
 bank engages in the issuance or sale to 
 qualified investors, through a grantor 
 trust or other separate entity, of 
 securities backed by or representing an 
 interest in notes, drafts, acceptances, 
 loans, leases, receivables, other 
 obligations (other than securities of 
 which the bank is not the issuer), or 
 pools of any such obligations 
 predominantly originated by--
 (I) the bank;
 (II) an affiliate of any such 
 bank other than a broker or 
 dealer; or
 (III) a syndicate of banks of 
 which the bank is a member, if 
 the obligations or pool of 
 obligations consists of 
 mortgage obligations or 
 consumer-related receivables.
 (iv) Identified banking products.--
 The bank buys or sells identified 
 banking products, as defined in section 
 206 of the Gramm-Leach-Bliley Act.
 (6) The term ``bank'' means (A) a banking institution 
 organized under the laws of the United States or a 
 Federal savings association, as defined in section 2(5) 
 of the Home Owners' Loan Act, (B) a member bank of the 
 Federal Reserve System, (C) any other banking 
 institution or savings association, as defined in 
 section 2(4) of the Home Owners' Loan Act, whether 
 incorporated or not, doing business under the laws of 
 any State or of the United States, a substantial 
 portion of the business of which consists of receiving 
 deposits or exercising fiduciary powers similar to 
 those permitted to national banks under the authority 
 of the Comptroller of the Currency pursuant to the 
 first section of Public Law 87-722 (12 U.S.C. 92a), and 
 which is supervised and examined by State or Federal 
 authority having supervision over banks or savings 
 associations, and which is not operated for the purpose 
 of evading the provisions of this title, and (D) a 
 receiver, conservator, or other liquidating agent of 
 any institution or firm included in clauses (A), (B), 
 or (C) of this paragraph.
 (7) The term ``director'' means any director of a 
 corporation or any person performing similar functions 
 with respect to any organization, whether incorporated 
 or unincorporated.
 (8) The term ``issuer'' means any person who issues 
 or proposes to issue any security; except that with 
 respect to certificates of deposit for securities, 
 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 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.
 (9) The term ``person'' means a natural person, 
 company, government, or political subdivision, agency, 
 or instrumentality of a government.
 (10) The term ``security'' means any note, stock, 
 treasury stock, security future, security-based 
 swap,bond, debenture, certificate of interest or 
 participation in any profit-sharing agreement or in any 
 oil, gas, or other mineral royalty or lease, any 
 collateral-trust certificate, preorganization 
 certificate or subscription, transferable share, 
 investment contract, voting-trust certificate, 
 certificate of deposit for a security, any put, call, 
 straddle, option, or privilege on any security, 
 certificate of deposit, or group or index of securities 
 (including any interest therein or based on the value 
 thereof), or any put, call, straddle, option, or 
 privilege entered into on a national securities 
 exchange relating to foreign currency, 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 shall not include currency or any note, 
 draft, bill of exchange, or banker's acceptance which 
 has a maturity at the time of issuance of not exceeding 
 nine months, exclusive of days of grace, or any renewal 
 thereof the maturity of which is likewise limited.
 (11) The term ``equity security'' means any stock or 
 similar security; or any security future on any such 
 security; or any security convertible, with or without 
 consideration, into such a security, or carrying any 
 warrant or right to subscribe to or purchase such a 
 security; or any such warrant or right; or any other 
 security which the Commission shall deem to be of 
 similar nature and consider necessary or appropriate, 
 by such rules and regulations as it may prescribe in 
 the public interest or for the protection of investors, 
 to treat as an equity security.
 (12)(A) The term ``exempted security'' or ``exempted 
 securities'' includes--
 (i) government securities, as defined in 
 paragraph (42) of this subsection;
 (ii) municipal securities, as defined in 
 paragraph (29) of this subsection;
 (iii) any interest or participation in any 
 common trust fund or similar fund that is 
 excluded from the definition of the term 
 ``investment company'' under section 3(c)(3) of 
 the Investment Company Act of 1940;
 (iv) any interest or participation in a 
 single trust fund, or a collective trust fund 
 maintained by a bank, or any security arising 
 out of a contract issued by an insurance 
 company, which interest, participation, or 
 security is issued in connection with a 
 qualified plan as defined in subparagraph (C) 
 of this paragraph;
 (v) any security issued by or any interest or 
 participation in any pooled income fund, 
 collective trust fund, collective investment 
 fund, or similar fund that is excluded from the 
 definition of an investment company under 
 section 3(c)(10)(B) of the Investment Company 
 Act of 1940;
 (vi) solely for purposes of sections 12, 13, 
 14, and 16 of this title, any security issued 
 by or any interest or participation in any 
 church plan, company, or account that is 
 excluded from the definition of an investment 
 company under section 3(c)(14) of the 
 Investment Company Act of 1940; and
 (vii) such other securities (which may 
 include, among others, unregistered securities, 
 the market in which is predominantly 
 intrastate) as the Commission may, by such 
 rules and regulations as it deems consistent 
 with the public interest and the protection of 
 investors, either unconditionally or upon 
 specified terms and conditions or for stated 
 periods, exempt from the operation of any one 
 or more provisions of this title which by their 
 terms do not apply to an ``exempted security'' 
 or to ``exempted securities''.
 (B)(i) Notwithstanding subparagraph (A)(i) of this 
 paragraph, government securities shall not be deemed to 
 be ``exempted securities'' for the purposes of section 
 17A of this title.
 (ii) Notwithstanding subparagraph (A)(ii) of this 
 paragraph, municipal securities shall not be deemed to 
 be ``exempted securities'' for the purposes of sections 
 15 and 17A of this title.
 (C)For purposes of subparagraph (A)(iv) of this 
 paragraph, the term ``qualified plan'' means (i) a 
 stock bonus, pension, or profit-sharing plan which 
 meets the requirements for qualification under section 
 401 of the Internal Revenue Code of 1954, (ii) an 
 annuity plan which meets the requirements for the 
 deduction of the employer's contribution under section 
 404(a)(2) of such Code, (iii) a governmental plan as 
 defined in section 414(d) of such Code which has been 
 established by an employer for the exclusive benefit of 
 its employees or their beneficiaries for the purpose of 
 distributing to such employees or their beneficiaries 
 the corpus and income of the funds accumulated under 
 such plan, if under such plan it is impossible, prior 
 to the satisfaction of all liabilities with respect to 
 such employees and their beneficiaries, for any part of 
 the corpus or income to be used for, or diverted to, 
 purposes other than the exclusive benefit of such 
 employees or their beneficiaries, [or (iv)] (iv) a plan 
 which meets the requirements of section 403(b) of such 
 Code (I) if (aa) such plan is subject to title I of the 
 Employee Retirement Income Security Act of 1974 (29 
 U.S.C. 1001 et seq.), (bb) any employer making such 
 plan available agrees to serve as a fiduciary for the 
 plan with respect to the selection of the plan's 
 investments among which participants can choose, or 
 (cc) such plan is a governmental plan (as defined in 
 section 414(d) of such Code), and (II) if the employer, 
 a fiduciary of the plan, or another person acting on 
 behalf of the employer reviews and approves each 
 investment alternative offered under any plan described 
 under subclause (I)(cc) prior to the investment being 
 offered to participants in the plan, or (v) a church 
 plan, company, or account that is excluded from the 
 definition of an investment company under section 
 3(c)(14) of the Investment Company Act of 1940, other 
 than any plan described in clause (i), [(ii), or (iii)] 
 (ii), (iii), or (iv) of this subparagraph which (I) 
 covers employees some or all of whom are employees 
 within the meaning of section 401(c) of such Code, or 
 [(II) is a plan funded] (II) in the case of a plan not 
 described in clause (iv), is a plan funded by an 
 annuity contract described in section 403(b) of such 
 Code.
 (13) The terms ``buy'' and ``purchase'' each include 
 any contract to buy, purchase, or otherwise acquire. 
 For security futures products, such term includes any 
 contract, agreement, or transaction for future 
 delivery. For security-based swaps, such terms include 
 the execution, termination (prior to its scheduled 
 maturity date), assignment, exchange, or similar 
 transfer or conveyance of, or extinguishing of rights 
 or obligations under, a security-based swap, as the 
 context may require.
 (14) The terms ``sale'' and ``sell'' each include any 
 contract to sell or otherwise dispose of. For security 
 futures products, such term includes any contract, 
 agreement, or transaction for future delivery. For 
 security-based swaps, such terms include the execution, 
 termination (prior to its scheduled maturity date), 
 assignment, exchange, or similar transfer or conveyance 
 of, or extinguishing of rights or obligations under, a 
 security-based swap, as the context may require.
 (15) The term ``Commission'' means the Securities and 
 Exchange Commission established by section 4 of this 
 title.
 (16) The term ``State'' means any State of the United 
 States, the District of Columbia, Puerto Rico, 
 Philippine Islands, the Virgin Islands, or any other 
 possession of the United States.
 (17) The term ``interstate commerce'' means trade, 
 commerce, transportation, or communication among the 
 several States, or between any foreign country and any 
 State, or between any State and any place or ship 
 outside thereof. The term also includes intrastate use 
 of (A) any facility of a national securities exchange 
 or of a telephone or other interstate means of 
 communication, or (B) any other interstate 
 instrumentality.
 (18) The term ``person associated with a broker or 
 dealer'' or ``associated person of a broker or dealer'' 
 means any partner, officer, director, or branch manager 
 of such broker or dealer (or any person occupying a 
 similar status or performing similar functions), any 
 person directly or indirectly controlling, controlled 
 by, or under common control with such broker or dealer, 
 or any employee of such broker or dealer, except that 
 any person associated with a broker or dealer whose 
 functions are solely clerical or ministerial shall not 
 be included in the meaning of such term for purposes of 
 section 15(b) of this title (other than paragraph (6) 
 thereof).
 (19) The terms ``investment company,''``affiliated 
 person,''``insurance company,''``separate account,'' 
 and ``company'' have the same meanings as in the 
 Investment Company Act of 1940.
 (20) The terms ``investment adviser'' and 
 ``underwriter'' have the same meanings as in the 
 Investment Advisers Act of 1940.
 (21) The term ``persons associated with a member'' or 
 ``associated person of a member'' when used with 
 respect to a member of a national securities exchange 
 or registered securities association means any partner, 
 officer, director, or branch manager of such member (or 
 any person occupying a similar status or performing 
 similar functions), any person directly or indirectly 
 controlling, controlled by, or under common control 
 with such member, or any employee of such member.
 (22)(A) The term ``securities information processor'' 
 means any person engaged in the business of (i) 
 collecting, processing, or preparing for distribution 
 or publication, or assisting, participating in, or 
 coordinating the distribution or publication of, 
 information with respect to transactions in or 
 quotations for any security (other than an exempted 
 security) or (ii) distributing or publishing (whether 
 by means of a ticker tape, a communications network, a 
 terminal display device, or otherwise) on a current and 
 continuing basis, information with respect to such 
 transactions or quotations. The term ``securities 
 information processor'' does not include any bona fide 
 newspaper, news magazine, or business or financial 
 publication of general and regular circulation, any 
 self-regulatory organization, any bank, broker, dealer, 
 building and loan, savings and loan, or homestead 
 association, or cooperative bank, if such bank, broker, 
 dealer, association, or cooperative bank would be 
 deemed to be a securities information processor solely 
 by reason of functions performed by such institutions 
 as part of customary banking, brokerage, dealing, 
 association, or cooperative bank activities, or any 
 common carrier, as defined in section 3 of the 
 Communications Act of 1934, subject to the jurisdiction 
 of the Federal Communications Commission or a State 
 commission, as defined in section 3 of that Act, unless 
 the Commission determines that such carrier is engaged 
 in the business of collecting, processing, or preparing 
 for distribution or publication, information with 
 respect to transactions in or quotations for any 
 security.
 (B) The term ``exclusive processor'' means any 
 securities information processor or self-regulatory 
 organization which, directly or indirectly, engages on 
 an exclusive basis on behalf of any national securities 
 exchange or registered securities association, or any 
 national securities exchange or registered securities 
 association which engages on an exclusive basis on its 
 own behalf, in collecting, processing, or preparing for 
 distribution or publication any information with 
 respect to (i) transactions or quotations on or 
 effected or made by means of any facility of such 
 exchange or (ii) quotations distributed or published by 
 means of any electronic system operated or controlled 
 by such association.
 (23)(A) The term ``clearing agency'' means any person 
 who acts as an intermediary in making payments or 
 deliveries or both in connection with transactions in 
 securities or who provides facilities for comparison of 
 data respecting the terms of settlement of securities 
 transactions, to reduce the number of settlements of 
 securities transactions, or for the allocation of 
 securities settlement responsibilities. Such term also 
 means any person, such as a securities depository, who 
 (i) acts as a custodian of securities in connection 
 with a system for the central handling of securities 
 whereby all securities of a particular class or series 
 of any issuer deposited within the system are treated 
 as fungible and may be transferred, loaned, or pledged 
 by bookkeeping entry without physical delivery of 
 securities certificates, or (ii) otherwise permits or 
 facilitates the settlement of securities transactions 
 or the hypothecation or lending of securities without 
 physical delivery of securities certificates.
 (B) The term ``clearing agency'' does not include (i) 
 any Federal Reserve bank, Federal home loan bank, or 
 Federal land bank; (ii) any national securities 
 exchange or registered securities association solely by 
 reason of its providing facilities for comparison of 
 data respecting the terms of settlement of securities 
 transactions effected on such exchange or by means of 
 any electronic system operated or controlled by such 
 association; (iii) any bank, broker, dealer, building 
 and loan, savings and loan, or homestead association, 
 or cooperative bank if such bank, broker, dealer, 
 association, or cooperative bank would be deemed to be 
 a clearing agency solely by reason of functions 
 performed by such institution as part of customary 
 banking, brokerage, dealing, association, or 
 cooperative banking activities, or solely by reason of 
 acting on behalf of a clearing agency or a participant 
 therein in connection with the furnishing by the 
 clearing agency of services to its participants or the 
 use of services of the clearing agency by its 
 participants, unless the Commission, by rule, otherwise 
 provides as necessary or appropriate to assure the 
 prompt and accurate clearance and settlement of 
 securities transactions or to prevent evasion of this 
 title; (iv) any life insurance company, its registered 
 separate accounts, or a subsidiary of such insurance 
 company solely by reason of functions commonly 
 performed by such entities in connection with variable 
 annuity contracts or variable life policies issued by 
 such insurance company or its separate accounts; (v) 
 any registered open-end investment company or unit 
 investment trust solely by reason of functions commonly 
 performed by it in connection with shares in such 
 registered open-end investment company or unit 
 investment trust, or (vi) any person solely by reason 
 of its performing functions described in paragraph 
 25(E) of this subsection.
 (24) The term ``participant'' when used with respect 
 to a clearing agency means any person who uses a 
 clearing agency to clear or settle securities 
 transactions or to transfer, pledge, lend, or 
 hypothecate securities. Such term does not include a 
 person whose only use of a clearing agency is (A) 
 through another person who is a participant or (B) as a 
 pledgee of securities.
 (25) The term ``transfer agent'' means any person who 
 engages on behalf of an issuer of securities or on 
 behalf of itself as an issuer of securities in (A) 
 countersigning such securities upon issuance; (B) 
 monitoring the issuance of such securities with a view 
 to preventing unauthorized issuance, a function 
 commonly performed by a person called a registrar; (C) 
 registering the transfer of such securities; (D) 
 exchanging or converting such securities; or (E) 
 transferring record ownership of securities by 
 bookkeeping entry without physical issuance of 
 securities certificates. The term ``transfer agent'' 
 does not include any insurance company or separate 
 account which performs such functions solely with 
 respect to variable annuity contracts or variable life 
 policies which it issues or any registered clearing 
 agency which performs such functions solely with 
 respect to options contracts which it issues.
 (26) The term ``self-regulatory organization'' means 
 any national securities exchange, registered securities 
 association, or registered clearing agency, or (solely 
 for purposes of sections 19(b), 19(c), and 23(b) of 
 this title) the Municipal Securities Rulemaking Board 
 established by section 15B of this title.
 (27) The term ``rules of an exchange'', ``rules of an 
 association'', or ``rules of a clearing agency'' means 
 the constitution, articles of incorporation, bylaws, 
 and rules, or instruments corresponding to the 
 foregoing, of an exchange, association of brokers and 
 dealers, or clearing agency, respectively, and such of 
 the stated policies, practices, and interpretations of 
 such exchange, association, or clearing agency as the 
 Commission, by rule, may determine to be necessary or 
 appropriate in the public interest or for the 
 protection of investors to be deemed to be rules of 
 such exchange, association, or clearing agency.
 (28) The term ``rules of a self-regulatory 
 organization'' means the rules of an exchange which is 
 a national securities exchange, the rules of an 
 association of brokers and dealers which is a 
 registered securities association, the rules of a 
 clearing agency which is a registered clearing agency, 
 or the rules of the Municipal Securities Rulemaking 
 Board.
 (29) The term ``municipal securities'' means 
 securities which are direct obligations of, or 
 obligations guaranteed as to principal or interest by, 
 a State or any political subdivision thereof, or any 
 agency or instrumentality of a State or any political 
 subdivision thereof, or any municipal corporate 
 instrumentality of one or more States, or any security 
 which is an industrial development bond (as defined in 
 section 103(c)(2) of the Internal Revenue Code of 1954) 
 the interest on which is excludable from gross income 
 under section 103(a)(1) of such Code if, by reason of 
 the application of paragraph (4) or (6) of section 
 103(c) of such Code (determined as if paragraphs 
 (4)(A), (5), and (7) were not included in such section 
 103(c)), paragraph (1) of such section 103(c) does not 
 apply to such security.
 (30) The term ``municipal securities dealer'' means 
 any person (including a separately identifiable 
 department or division of a bank) engaged in the 
 business of buying and selling municipal securities for 
 his own account, through a broker or otherwise, but 
 does not include--
 (A) any person insofar as he buys or sells 
 such securities for his own account, either 
 individually or in some fiduciary capacity, but 
 not as a part of a regular business; or
 (B) a bank, unless the bank is engaged in the 
 business of buying and selling municipal 
 securities for its own account other than in a 
 fiduciary capacity, through a broker or 
 otherwise; Provided, however, That if the bank 
 is engaged in such business through a 
 separately identifiable department or division 
 (as defined by the Municipal Securities 
 Rulemaking Board in accordance with section 
 15B(b)(2)(H) of this title), the department or 
 division and not the bank itself shall be 
 deemed to be the municipal securities dealer.
 (31) The term ``municipal securities broker'' means a 
 broker engaged in the business of effecting 
 transactions in municipal securities for the account of 
 others.
 (32) The term ``person associated with a municipal 
 securities dealer'' when used with respect to a 
 municipal securities dealer which is a bank or a 
 division or department of a bank means any person 
 directly engaged in the management, direction, 
 supervision, or performance of any of the municipal 
 securities dealer's activities with respect to 
 municipal securities, and any person directly or 
 indirectly controlling such activities or controlled by 
 the municipal securities dealer in connection with such 
 activities.
 (33) The term ``municipal securities investment 
 portfolio'' means all municipal securities held for 
 investment and not for sale as part of a regular 
 business by a municipal securities dealer or by a 
 person, directly or indirectly, controlling, controlled 
 by, or under common control with a municipal securities 
 dealer.
 (34) The term ``appropriate regulatory agency'' 
 means--
 (A) When used with respect to a municipal 
 securities dealer:
 (i) the Comptroller of the Currency, 
 in the case of a national bank, a 
 subsidiary or a department or division 
 of any such bank, a Federal savings 
 association (as defined in section 
 3(b)(2) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813(b)(2))), 
 the deposits of which are insured by 
 the Federal Deposit Insurance 
 Corporation, or a subsidiary or 
 department or division of any such 
 Federal savings association;
 (ii) the Board of Governors of the 
 Federal Reserve System, in the case of 
 a State member bank of the Federal 
 Reserve System, a subsidiary or a 
 department or division thereof, a bank 
 holding company, a subsidiary of a bank 
 holding company which is a bank other 
 than a bank specified in clause (i), 
 (iii), or (iv) of this subparagraph, a 
 subsidiary or a department or division 
 of such subsidiary, or a savings and 
 loan holding company;
 (iii) the Federal Deposit Insurance 
 Corporation, in the case of a bank 
 insured by the Federal Deposit 
 Insurance Corporation (other than a 
 member of the Federal Reserve System), 
 a subsidiary or department or division 
 of any such bank, a State savings 
 association (as defined in section 
 3(b)(3) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813(b)(3))), 
 the deposits of which are insured by 
 the Federal Deposit Insurance 
 Corporation, or a subsidiary or a 
 department or division of any such 
 State savings association; and
 (iv) the Commission in the case of 
 all other municipal securities dealers.
 (B) When used with respect to a clearing 
 agency or transfer agent:
 (i) the Comptroller of the Currency, 
 in the case of a national bank, a 
 subsidiary of any such bank, a Federal 
 savings association (as defined in 
 section 3(b)(2) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813(b)(2))), 
 the deposits of which are insured by 
 the Federal Deposit Insurance 
 Corporation, or a subsidiary of any 
 such Federal savings association;
 (ii) the Board of Governors of the 
 Federal Reserve System, in the case of 
 a State member bank of the Federal 
 Reserve System, a subsidiary thereof, a 
 bank holding company, a subsidiary of a 
 bank holding company that is a bank 
 other than a bank specified in clause 
 (i) or (iii) of this subparagraph, or a 
 savings and loan holding company;
 (iii) the Federal Deposit Insurance 
 Corporation, in the case of a bank 
 insured by the Federal Deposit 
 Insurance Corporation (other than a 
 member of the Federal Reserve System), 
 a subsidiary of any such bank, a State 
 savings association (as defined in 
 section 3(b)(3) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813(b)(3))), 
 the deposits of which are insured by 
 the Federal Deposit Insurance 
 Corporation, or a subsidiary of any 
 such State savings association; and
 (iv) the Commission in the case of 
 all other clearing agencies and 
 transfer agents.
 (C) When used with respect to a participant 
 or applicant to become a participant in a 
 clearing agency or a person requesting or 
 having access to services offered by a clearing 
 agency:
 (i) the Comptroller of the Currency, 
 in the case of a national bank or a 
 Federal savings association (as defined 
 in section 3(b)(2) of the Federal 
 Deposit Insurance Act (12 U.S.C. 
 1813(b)(2))), the deposits of which are 
 insured by the Federal Deposit 
 Insurance Corporation when the 
 appropriate regulatory agency for such 
 clearing agency is not the Commission;
 (ii) the Board of Governors of the 
 Federal Reserve System in the case of a 
 State member bank of the Federal 
 Reserve System, a bank holding company, 
 or a subsidiary of a bank holding 
 company, a subsidiary of a bank holding 
 company that is a bank other than a 
 bank specified in clause (i) or (iii) 
 of this subparagraph, or a savings and 
 loan holding company when the 
 appropriate regulatory agency for such 
 clearing agency is not the Commission;
 (iii) the Federal Deposit Insurance 
 Corporation, in the case of a bank 
 insured by the Federal Deposit 
 Insurance Corporation (other than a 
 member of the Federal Reserve System) 
 or a State savings association (as 
 defined in section 3(b)(3) of the 
 Federal Deposit Insurance Act (12 
 U.S.C. 1813(b)(3))), the deposits of 
 which are insured by the Federal 
 Deposit Insurance Corporation; and when 
 the appropriate regulatory agency for 
 such clearing agency is not the 
 Commission;
 (iv) the Commission in all other 
 cases.
 (D) When used with respect to an 
 institutional investment manager which is a 
 bank the deposits of which are insured in 
 accordance with the Federal Deposit Insurance 
 Act:
 (i) the Comptroller of the Currency, 
 in the case of a national bank or a 
 Federal savings association (as defined 
 in section 3(b)(2) of the Federal 
 Deposit Insurance Act (12 U.S.C. 
 1813(b)(2))), the deposits of which are 
 insured by the Federal Deposit 
 Insurance Corporation;
 (ii) the Board of Governors of the 
 Federal Reserve System, in the case of 
 any other member bank of the Federal 
 Reserve System; and
 (iii) the Federal Deposit Insurance 
 Corporation, in the case of any other 
 insured bank or a State savings 
 association (as defined in section 
 3(b)(3) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813(b)(3))), 
 the deposits of which are insured by 
 the Federal Deposit Insurance 
 Corporation.
 (E) When used with respect to a national 
 securities exchange or registered securities 
 association, member thereof, person associated 
 with a member thereof, applicant to become a 
 member thereof or to become associated with a 
 member thereof, or person requesting or having 
 access to services offered by such exchange or 
 association or member thereof, or the Municipal 
 Securities Rulemaking Board, the Commission.
 (F) When used with respect to a person 
 exercising investment discretion with respect 
 to an account:
 (i) the Comptroller of the Currency, 
 in the case of a national bank or a 
 Federal savings association (as defined 
 in section 3(b)(2) of the Federal 
 Deposit Insurance Act (12 U.S.C. 
 1813(b)(2))), the deposits of which are 
 insured by the Federal Deposit 
 Insurance Corporation;
 (ii) the Board of Governors of the 
 Federal Reserve System in the case of 
 any other member bank of the Federal 
 Reserve System;
 (iii) the Federal Deposit Insurance 
 Corporation, in the case of any other 
 bank the deposits of which are insured 
 in accordance with the Federal Deposit 
 Insurance Act or a State savings 
 association (as defined in section 
 3(b)(3) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813(b)(3))), 
 the deposits of which are insured by 
 the Federal Deposit Insurance 
 Corporation; and
 (iv) the Commission in the case of 
 all other such persons.
 (G) When used with respect to a government 
 securities broker or government securities 
 dealer, or person associated with a government 
 securities broker or government securities 
 dealer:
 (i) the Comptroller of the Currency, 
 in the case of a national bank, a 
 Federal savings association (as defined 
 in section 3(b)(2) of the Federal 
 Deposit Insurance Act), the deposits of 
 which are insured by the Federal 
 Deposit Insurance Corporation, or a 
 Federal branch or Federal agency of a 
 foreign bank (as such terms are used in 
 the International Banking Act of 1978);
 (ii) the Board of Governors of the 
 Federal Reserve System, in the case of 
 a State member bank of the Federal 
 Reserve System, a foreign bank, an 
 uninsured State branch or State agency 
 of a foreign bank, a commercial lending 
 company owned or controlled by a 
 foreign bank (as such terms are used in 
 the International Banking Act of 1978), 
 or a corporation organized or having an 
 agreement with the Board of Governors 
 of the Federal Reserve System pursuant 
 to section 25 or section 25A of the 
 Federal Reserve Act;
 (iii) the Federal Deposit Insurance 
 Corporation, in the case of a bank 
 insured by the Federal Deposit 
 Insurance Corporation (other than a 
 member of the Federal Reserve System or 
 a Federal savings bank), a State 
 savings association (as defined in 
 section 3(b)(3) of the Federal Deposit 
 Insurance Act), the deposits of which 
 are insured by the Federal Deposit 
 Insurance Corporation, or an insured 
 State branch of a foreign bank (as such 
 terms are used in the International 
 Banking Act of 1978); and
 (iv) the Commission, in the case of 
 all other government securities brokers 
 and government securities dealers.
 (H) When used with respect to an institution 
 described in subparagraph (D), (F), or (G) of 
 section 2(c)(2), or held under section 4(f), of 
 the Bank Holding Company Act of 1956--
 (i) the Comptroller of the Currency, 
 in the case of a national bank;
 (ii) the Board of Governors of the 
 Federal Reserve System, in the case of 
 a State member bank of the Federal 
 Reserve System or any corporation 
 chartered under section 25A of the 
 Federal Reserve Act;
 (iii) the Federal Deposit Insurance 
 Corporation, in the case of any other 
 bank the deposits of which are insured 
 in accordance with the Federal Deposit 
 Insurance Act; or
 (iv) the Commission in the case of 
 all other such institutions.
 As used in this paragraph, the terms ``bank holding 
 company'' and ``subsidiary of a bank holding company'' 
 have the meanings given them in section 2 of the Bank 
 Holding Company Act of 1956. As used in this paragraph, 
 the term ``savings and loan holding company'' has the 
 same meaning as in section 10(a) of the Home Owners' 
 Loan Act (12 U.S.C. 1467a(a)).
 (35) A person exercises ``investment discretion'' 
 with respect to an account if, directly or indirectly, 
 such person (A) is authorized to determine what 
 securities or other property shall be purchased or sold 
 by or for the account, (B) makes decisions as to what 
 securities or other property shall be purchased or sold 
 by or for the account even though some other person may 
 have responsibility for such investment decisions, or 
 (C) otherwise exercises such influence with respect to 
 the purchase and sale of securities or other property 
 by or for the account as the Commission, by rule, 
 determines, in the public interest or for the 
 protection of investors, should be subject to the 
 operation of the provisions of this title and rules and 
 regulations thereunder.
 (36) A class of persons or markets is subject to 
 ``equal regulation'' if no member of the class has a 
 competitive advantage over any other member thereof 
 resulting from a disparity in their regulation under 
 this title which the Commission determines is unfair 
 and not necessary or appropriate in furtherance of the 
 purposes of this title.
 (37) The term ``records'' means accounts, 
 correspondence, memorandums, tapes, discs, papers, 
 books, and other documents or transcribed information 
 of any type, whether expressed in ordinary or machine 
 language.
 (38) The term ``market maker'' means any specialist 
 permitted to act as a dealer, any dealer acting in the 
 capacity of block positioner, and any dealer who, with 
 respect to a security, holds himself out (by entering 
 quotations in an inter-dealer communications system or 
 otherwise) as being willing to buy and sell such 
 security for his own account on a regular or continuous 
 basis.
 (39) A person is subject to a ``statutory 
 disqualification'' with respect to membership or 
 participation in, or association with a member of, a 
 self-regulatory organization, if such person--
 (A) has been and is expelled or suspended 
 from membership or participation in, or barred 
 or suspended from being associated with a 
 member of, any self-regulatory organization, 
 foreign equivalent of a self-regulatory 
 organization, foreign or international 
 securities exchange, contract market designated 
 pursuant to section 5 of the Commodity Exchange 
 Act (7 U.S.C. 7), or any substantially 
 equivalent foreign statute or regulation, or 
 futures association registered under section 17 
 of such Act (7 U.S.C. 21), or any substantially 
 equivalent foreign statute or regulation, or 
 has been and is denied trading privileges on 
 any such contract market or foreign equivalent;
 (B) is subject to--
 (i) an order of the Commission, other 
 appropriate regulatory agency, or foreign 
 financial regulatory authority--
 (I) denying, suspending for a period 
 not exceeding 12 months, or revoking 
 his registration as a broker, dealer, 
 municipal securities dealer, government 
 securities broker, government 
 securities dealer, security-based swap 
 dealer, or major security-based swap 
 participant or limiting his activities 
 as a foreign person performing a 
 function substantially equivalent to 
 any of the above; or
 (II) barring or suspending for a 
 period not exceeding 12 months his 
 being associated with a broker, dealer, 
 municipal securities dealer, government 
 securities broker, government 
 securities dealer, security-based swap 
 dealer, major security-based swap 
 participant, or foreign person 
 performing a function substantially 
 equivalent to any of the above;
 (ii) an order of the Commodity Futures 
 Trading Commission denying, suspending, or 
 revoking his registration under the Commodity 
 Exchange Act (7 U.S.C. 1 et seq.); or
 (iii) an order by a foreign financial 
 regulatory authority denying, suspending, or 
 revoking the person's authority to engage in 
 transactions in contracts of sale of a 
 commodity for future delivery or other 
 instruments traded on or subject to the rules 
 of a contract market, board of trade, or 
 foreign equivalent thereof;
 (C) by his conduct while associated with a 
 broker, dealer, municipal securities dealer, 
 government securities broker, government 
 securities dealer, security-based swap dealer, 
 or major security-based swap participant, or 
 while associated with an entity or person 
 required to be registered under the Commodity 
 Exchange Act, has been found to be a cause of 
 any effective suspension, expulsion, or order 
 of the character described in subparagraph (A) 
 or (B) of this paragraph, and in entering such 
 a suspension, expulsion, or order, the 
 Commission, an appropriate regulatory agency, 
 or any such self-regulatory organization shall 
 have jurisdiction to find whether or not any 
 person was a cause thereof;
 (D) by his conduct while associated with any 
 broker, dealer, municipal securities dealer, 
 government securities broker, government 
 securities dealer, security-based swap dealer, 
 major security-based swap participant, or any 
 other entity engaged in transactions in 
 securities, or while associated with an entity 
 engaged in transactions in contracts of sale of 
 a commodity for future delivery or other 
 instruments traded on or subject to the rules 
 of a contract market, board of trade, or 
 foreign equivalent thereof, has been found to 
 be a cause of any effective suspension, 
 expulsion, or order by a foreign or 
 international securities exchange or foreign 
 financial regulatory authority empowered by a 
 foreign government to administer or enforce its 
 laws relating to financial transactions as 
 described in subparagraph (A) or (B) of this 
 paragraph;
 (E) has associated with him any person who is 
 known, or in the exercise of reasonable care 
 should be known, to him to be a person 
 described by subparagraph (A), (B), (C), or (D) 
 of this paragraph; or
 (F) has committed or omitted any act, or is 
 subject to an order or finding, enumerated in 
 subparagraph (D), (E), (H), or (G) of paragraph 
 (4) of section 15(b) of this title, has been 
 convicted of any offense specified in 
 subparagraph (B) of such paragraph (4) or any 
 other felony within ten years of the date of 
 the filing of an application for membership or 
 participation in, or to become associated with 
 a member of, such self-regulatory organization, 
 is enjoined from any action, conduct, or 
 practice specified in subparagraph (C) of such 
 paragraph (4), has willfully made or caused to 
 be made in any application for membership or 
 participation in, or to become associated with 
 a member of, a self-regulatory organization, 
 report required to be filed with a self-
 regulatory organization, or proceeding before a 
 self-regulatory organization, any statement 
 which was at the time, and in the light of the 
 circumstances under which it was made, false or 
 misleading with respect to any material fact, 
 or has omitted to state in any such 
 application, report, or proceeding any material 
 fact which is required to be stated therein.
 (40) The term ``financial responsibility rules'' 
 means the rules and regulations of the Commission or 
 the rules and regulations prescribed by any self-
 regulatory organization relating to financial 
 responsibility and related practices which are 
 designated by the Commission, by rule or regulation, to 
 be financial responsibility rules.
 (41) The term ``mortgage related security'' means a 
 security that meets standards of credit-worthiness as 
 established by the Commission, and either:
 (A) represents ownership of one or more 
 promissory notes or certificates of interest or 
 participation in such notes (including any 
 rights designed to assure servicing of, or the 
 receipt or timeliness of receipt by the holders 
 of such notes, certificates, or participations 
 of amounts payable under, such notes, 
 certificates, or participations), which notes:
 (i) are directly secured by a first 
 lien on a single parcel of real estate, 
 including stock allocated to a dwelling 
 unit in a residential cooperative 
 housing corporation, upon which is 
 located a dwelling or mixed residential 
 and commercial structure, on a 
 residential manufactured home as 
 defined in section 603(6) of the 
 National Manufactured Housing 
 Construction and Safety Standards Act 
 of 1974, whether such manufactured home 
 is considered real or personal property 
 under the laws of the State in which it 
 is to be located, or on one or more 
 parcels of real estate upon which is 
 located one or more commercial 
 structures; and
 (ii) were originated by a savings and 
 loan association, savings bank, 
 commercial bank, credit union, 
 insurance company, or similar 
 institution which is supervised and 
 examined by a Federal or State 
 authority, or by a mortgage approved by 
 the Secretary of Housing and Urban 
 Development pursuant to sections 203 
 and 211 of the National Housing Act, 
 or, where such notes involve a lien on 
 the manufactured home, by any such 
 institution or by any financial 
 institution approved for insurance by 
 the Secretary of Housing and Urban 
 Development pursuant to section 2 of 
 the National Housing Act; or
 (B) is secured by one or more promissory 
 notes or certificates of interest or 
 participations in such notes (with or without 
 recourse to the issuer thereof) and, by its 
 terms, provides for payments of principal in 
 relation to payments, or reasonable projections 
 of payments, on notes meeting the requirements 
 of subparagraphs (A) (i) and (ii) or 
 certificates of interest or participations in 
 promissory notes meeting such requirements.
 For the purpose of this paragraph, the term 
 ``promissory note'', when used in connection with a 
 manufactured home, shall also include a loan, advance, 
 or credit sale as evidence by a retail installment 
 sales contract or other instrument.
 (42) The term ``government securities'' means--
 (A) securities which are direct obligations 
 of, or obligations guaranteed as to principal 
 or interest by, the United States;
 (B) securities which are issued or guaranteed 
 by the Tennessee Valley Authority or by 
 corporations in which the United States has a 
 direct or indirect interest and which are 
 designated by the Secretary of the Treasury for 
 exemption as necessary or appropriate in the 
 public interest or for the protection of 
 investors;
 (C) securities issued or guaranteed as to 
 principal or interest by any corporation the 
 securities of which are designated, by statute 
 specifically naming such corporation, to 
 constitute exempt securities within the meaning 
 of the laws administered by the Commission;
 (D) for purposes of sections 15C and 17A, any 
 put, call, straddle, option, or privilege on a 
 security described in subparagraph (A), (B), or 
 (C) other than a put, call, straddle, option, 
 or privilege--
 (i) that is traded on one or more 
 national securities exchanges; or
 (ii) for which quotations are 
 disseminated through an automated 
 quotation system operated by a 
 registered securities association; or
 (E) for purposes of sections 15, 15C, and 17A 
 as applied to a bank, a qualified Canadian 
 government obligation as defined in section 
 5136 of the Revised Statutes of the United 
 States.
 (43) The term ``government securities broker'' means 
 any person regularly engaged in the business of 
 effecting transactions in government securities for the 
 account of others, but does not include--
 (A) any corporation the securities of which 
 are government securities under subparagraph 
 (B) or (C) of paragraph (42) of this 
 subsection; or
 (B) any person registered with the Commodity 
 Futures Trading Commission, any contract market 
 designated by the Commodity Futures Trading 
 Commission, such contract market's affiliated 
 clearing organization, or any floor trader on 
 such contract market, solely because such 
 person effects transactions in government 
 securities that the Commission, after 
 consultation with the Commodity Futures Trading 
 Commission, has determined by rule or order to 
 be incidental to such person's futures-related 
 business.
 (44) The term ``government securities dealer'' means 
 any person engaged in the business of buying and 
 selling government securities for his own account, 
 through a broker or otherwise, but does not include--
 (A) any person insofar as he buys or sells 
 such securities for his own account, either 
 individually or in some fiduciary capacity, but 
 not as a part of a regular business;
 (B) any corporation the securities of which 
 are government securities under subparagraph 
 (B) or (C) of paragraph (42) of this 
 subsection;
 (C) any bank, unless the bank is engaged in 
 the business of buying and selling government 
 securities for its own account other than in a 
 fiduciary capacity, through a broker or 
 otherwise; or
 (D) any person registered with the Commodity 
 Futures Trading Commission, any contract market 
 designated by the Commodity Futures Trading 
 Commission, such contract market's affiliated 
 clearing organization, or any floor trader on 
 such contract market, solely because such 
 person effects transactions in government 
 securities that the Commission, after 
 consultation with the Commodity Futures Trading 
 Commission, has determined by rule or order to 
 be incidental to such person's futures-related 
 business.
 (45) The term ``person associated with a government 
 securities broker or government securities dealer'' 
 means any partner, officer, director, or branch manager 
 of such government securities broker or government 
 securities dealer (or any person occupying a similar 
 status or performing similar functions), and any other 
 employee of such government securities broker or 
 government securities dealer who is engaged in the 
 management, direction, supervision, or performance of 
 any activities relating to government securities, and 
 any person directly or indirectly controlling, 
 controlled by, or under common control with such 
 government securities broker or government securities 
 dealer.
 (46) The term ``financial institution'' means--
 (A) a bank (as defined in paragraph (6) of 
 this subsection);
 (B) a foreign bank (as such term is used in 
 the International Banking Act of 1978); and
 (C) a savings association (as defined in 
 section 3(b) of the Federal Deposit Insurance 
 Act) the deposits of which are insured by the 
 Federal Deposit Insurance Corporation.
 (47) The term ``securities laws'' means the 
 Securities Act of 1933 (15 U.S.C. 77a et seq.), the 
 Securities Exchange Act of 1934 (15 U.S.C. 78a et 
 seq.), the Sarbanes-Oxley Act of 2002, the Trust 
 Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the 
 Investment Company Act of 1940 (15 U.S.C. 80a-1 et 
 seq.), the Investment Advisers Act of 1940 (15 U.S.C. 
 80b et seq.), and the Securities Investor Protection 
 Act of 1970 (15 U.S.C. 78aaa et seq.).
 (48) The term ``registered broker or dealer'' means a 
 broker or dealer registered or required to register 
 pursuant to section 15 or 15B of this title, except 
 that in paragraph (3) of this subsection and sections 6 
 and 15A the term means such a broker or dealer and a 
 government securities broker or government securities 
 dealer registered or required to register pursuant to 
 section 15C(a)(1)(A) of this title.
 (49) The terms ``person associated with a transfer 
 agent'' and ``associated person of a transfer agent'' 
 mean any person (except an employee whose functions are 
 solely clerical or ministerial) directly engaged in the 
 management, direction, supervision, or performance of 
 any of the transfer agent's activities with respect to 
 transfer agent functions, and any person directly or 
 indirectly controlling such activities or controlled by 
 the transfer agent in connection with such activities.
 (50) The term ``foreign securities authority'' means 
 any foreign government, or any governmental body or 
 regulatory organization empowered by a foreign 
 government to administer or enforce its laws as they 
 relate to securities matters.
 (51)(A) The term ``penny stock'' means any equity 
 security other than a security that is--
 (i) registered or approved for registration 
 and traded on a national securities exchange 
 that meets such criteria as the Commission 
 shall prescribe by rule or regulation for 
 purposes of this paragraph;
 (ii) authorized for quotation on an automated 
 quotation system sponsored by a registered 
 securities association, if such system (I) was 
 established and in operation before January 1, 
 1990, and (II) meets such criteria as the 
 Commission shall prescribe by rule or 
 regulation for purposes of this paragraph;
 (iii) issued by an investment company 
 registered under the Investment Company Act of 
 1940;
 (iv) excluded, on the basis of exceeding a 
 minimum price, net tangible assets of the 
 issuer, or other relevant criteria, from the 
 definition of such term by rule or regulation 
 which the Commission shall prescribe for 
 purposes of this paragraph; or
 (v) exempted, in whole or in part, 
 conditionally or unconditionally, from the 
 definition of such term by rule, regulation, or 
 order prescribed by the Commission.
 (B) The Commission may, by rule, regulation, or 
 order, designate any equity security or class of equity 
 securities described in clause (i) or (ii) of 
 subparagraph (A) as within the meaning of the term 
 ``penny stock'' if such security or class of securities 
 is traded other than on a national securities exchange 
 or through an automated quotation system described in 
 clause (ii) of subparagraph (A).
 (C) In exercising its authority under this paragraph 
 to prescribe rules, regulations, and orders, the 
 Commission shall determine that such rule, regulation, 
 or order is consistent with the public interest and the 
 protection of investors.
 (52) The term ``foreign financial regulatory 
 authority'' means any (A) foreign securities authority, 
 (B) other governmental body or foreign equivalent of a 
 self-regulatory organization empowered by a foreign 
 government to administer or enforce its laws relating 
 to the regulation of fiduciaries, trusts, commercial 
 lending, insurance, trading in contracts of sale of a 
 commodity for future delivery, or other instruments 
 traded on or subject to the rules of a contract market, 
 board of trade, or foreign equivalent, or other 
 financial activities, or (C) membership organization a 
 function of which is to regulate participation of its 
 members in activities listed above.
 (53)(A) The term ``small business related security'' 
 means a security that meets standards of credit-
 worthiness as established by the Commission, and 
 either--
 (i) represents an interest in 1 or more 
 promissory notes or leases of personal property 
 evidencing the obligation of a small business 
 concern and originated by an insured depository 
 institution, insured credit union, insurance 
 company, or similar institution which is 
 supervised and examined by a Federal or State 
 authority, or a finance company or leasing 
 company; or
 (ii) is secured by an interest in 1 or more 
 promissory notes or leases of personal property 
 (with or without recourse to the issuer or 
 lessee) and provides for payments of principal 
 in relation to payments, or reasonable 
 projections of payments, on notes or leases 
 described in clause (i).
 (B) For purposes of this paragraph--
 (i) an ``interest in a promissory note or a 
 lease of personal property'' includes ownership 
 rights, certificates of interest or 
 participation in such notes or leases, and 
 rights designed to assure servicing of such 
 notes or leases, or the receipt or timely 
 receipt of amounts payable under such notes or 
 leases;
 (ii) the term ``small business concern'' 
 means a business that meets the criteria for a 
 small business concern established by the Small 
 Business Administration under section 3(a) of 
 the Small Business Act;
 (iii) the term ``insured depository 
 institution'' has the same meaning as in 
 section 3 of the Federal Deposit Insurance Act; 
 and
 (iv) the term ``insured credit union'' has 
 the same meaning as in section 101 of the 
 Federal Credit Union Act.
 (54) Qualified investor.--
 (A) Definition.--Except as provided in 
 subparagraph (B), for purposes of this title, 
 the term ``qualified investor'' means--
 (i) any investment company registered 
 with the Commission under section 8 of 
 the Investment Company Act of 1940;
 (ii) any issuer eligible for an 
 exclusion from the definition of 
 investment company pursuant to section 
 3(c)(7) of the Investment Company Act 
 of 1940;
 (iii) any bank (as defined in 
 paragraph (6) of this subsection), 
 savings association (as defined in 
 section 3(b) of the Federal Deposit 
 Insurance Act), broker, dealer, 
 insurance company (as defined in 
 section 2(a)(13) of the Securities Act 
 of 1933), or business development 
 company (as defined in section 2(a)(48) 
 of the Investment Company Act of 1940);
 (iv) any small business investment 
 company licensed by the United States 
 Small Business Administration under 
 section 301 (c) or (d) of the Small 
 Business Investment Act of 1958;
 (v) any State sponsored employee 
 benefit plan, or any other employee 
 benefit plan, within the meaning of the 
 Employee Retirement Income Security Act 
 of 1974, other than an individual 
 retirement account, if the investment 
 decisions are made by a plan fiduciary, 
 as defined in section 3(21) of that 
 Act, which is either a bank, savings 
 and loan association, insurance 
 company, or registered investment 
 adviser;
 (vi) any trust whose purchases of 
 securities are directed by a person 
 described in clauses (i) through (v) of 
 this subparagraph;
 (vii) any market intermediary exempt 
 under section 3(c)(2) of the Investment 
 Company Act of 1940;
 (viii) any associated person of a 
 broker or dealer other than a natural 
 person;
 (ix) any foreign bank (as defined in 
 section 1(b)(7) of the International 
 Banking Act of 1978);
 (x) the government of any foreign 
 country;
 (xi) any corporation, company, or 
 partnership that owns and invests on a 
 discretionary basis, not less than 
 $25,000,000 in investments;
 (xii) any natural person who owns and 
 invests on a discretionary basis, not 
 less than $25,000,000 in investments;
 (xiii) any government or political 
 subdivision, agency, or instrumentality 
 of a government who owns and invests on 
 a discretionary basis not less than 
 $50,000,000 in investments; or
 (xiv) any multinational or 
 supranational entity or any agency or 
 instrumentality thereof.
 (B) Altered thresholds for asset-backed 
 securities and loan participations.--For 
 purposes of section 3(a)(5)(C)(iii) of this 
 title and section 206(a)(5) of the Gramm-Leach-
 Bliley Act, the term ``qualified investor'' has 
 the meaning given such term by subparagraph (A) 
 of this paragraph except that clauses (xi) and 
 (xii) shall be applied by substituting 
 ``$10,000,000'' for ``$25,000,000''.
 (C) Additional authority.--The Commission 
 may, by rule or order, define a ``qualified 
 investor'' as any other person, taking into 
 consideration such factors as the financial 
 sophistication of the person, net worth, and 
 knowledge and experience in financial matters.
 (55)(A) The term ``security future'' means a contract 
 of sale for future delivery of a single security or of 
 a narrow-based security index, including any interest 
 therein or based on the value thereof, except an 
 exempted security under section 3(a)(12) of this title 
 as in effect on the date of the enactment of the 
 Futures Trading Act of 1982 (other than any municipal 
 security as defined in section 3(a)(29) as in effect on 
 the date of the enactment of the Futures Trading Act of 
 1982). The term ``security future'' does not include 
 any agreement, contract, or transaction excluded from 
 the Commodity Exchange Act under section 2(c), 2(d), 
 2(f), or 2(g) of the Commodity Exchange Act (as in 
 effect on the date of the enactment of the Commodity 
 Futures Modernization Act of 2000) or title IV of the 
 Commodity Futures Modernization Act of 2000.
 (B) The term ``narrow-based security index'' means an 
 index--
 (i) that has 9 or fewer component securities;
 (ii) in which a component security comprises 
 more than 30 percent of the index's weighting;
 (iii) in which the five highest weighted 
 component securities in the aggregate comprise 
 more than 60 percent of the index's weighting; 
 or
 (iv) in which the lowest weighted component 
 securities comprising, in the aggregate, 25 
 percent of the index's weighting have an 
 aggregate dollar value of average daily trading 
 volume of less than $50,000,000 (or in the case 
 of an index with 15 or more component 
 securities, $30,000,000), except that if there 
 are two or more securities with equal weighting 
 that could be included in the calculation of 
 the lowest weighted component securities 
 comprising, in the aggregate, 25 percent of the 
 index's weighting, such securities shall be 
 ranked from lowest to highest dollar value of 
 average daily trading volume and shall be 
 included in the calculation based on their 
 ranking starting with the lowest ranked 
 security.
 (C) Notwithstanding subparagraph (B), an index is not 
 a narrow-based security index if--
 (i)(I) it has at least nine component 
 securities;
 (II) no component security comprises more 
 than 30 percent of the index's weighting; and
 (III) each component security is--
 (aa) registered pursuant to section 
 12 of the Securities Exchange Act of 
 1934;
 (bb) one of 750 securities with the 
 largest market capitalization; and
 (cc) one of 675 securities with the 
 largest dollar value of average daily 
 trading volume;
 (ii) a board of trade was designated as a 
 contract market by the Commodity Futures 
 Trading Commission with respect to a contract 
 of sale for future delivery on the index, 
 before the date of the enactment of the 
 Commodity Futures Modernization Act of 2000;
 (iii)(I) a contract of sale for future 
 delivery on the index traded on a designated 
 contract market or registered derivatives 
 transaction execution facility for at least 30 
 days as a contract of sale for future delivery 
 on an index that was not a narrow-based 
 security index; and
 (II) it has been a narrow-based security 
 index for no more than 45 business days over 3 
 consecutive calendar months;
 (iv) a contract of sale for future delivery 
 on the index is traded on or subject to the 
 rules of a foreign board of trade and meets 
 such requirements as are jointly established by 
 rule or regulation by the Commission and the 
 Commodity Futures Trading Commission;
 (v) no more than 18 months have passed since 
 the date of the enactment of the Commodity 
 Futures Modernization Act of 2000 and--
 (I) it is traded on or subject to the 
 rules of a foreign board of trade;
 (II) the offer and sale in the United 
 States of a contract of sale for future 
 delivery on the index was authorized 
 before the date of the enactment of the 
 Commodity Futures Modernization Act of 
 2000; and
 (III) the conditions of such 
 authorization continue to be met; or
 (vi) a contract of sale for future delivery 
 on the index is traded on or subject to the 
 rules of a board of trade and meets such 
 requirements as are jointly established by 
 rule, regulation, or order by the Commission 
 and the Commodity Futures Trading Commission.
 (D) Within 1 year after the enactment of the 
 Commodity Futures Modernization Act of 2000, the 
 Commission and the Commodity Futures Trading Commission 
 jointly shall adopt rules or regulations that set forth 
 the requirements under clause (iv) of subparagraph (C).
 (E) An index that is a narrow-based security index 
 solely because it was a narrow-based security index for 
 more than 45 business days over 3 consecutive calendar 
 months pursuant to clause (iii) of subparagraph (C) 
 shall not be a narrow-based security index for the 3 
 following calendar months.
 (F) For purposes of subparagraphs (B) and (C) of this 
 paragraph--
 (i) the dollar value of average daily trading 
 volume and the market capitalization shall be 
 calculated as of the preceding 6 full calendar 
 months; and
 (ii) the Commission and the Commodity Futures 
 Trading Commission shall, by rule or 
 regulation, jointly specify the method to be 
 used to determine market capitalization and 
 dollar value of average daily trading volume.
 (56) The term ``security futures product'' means a 
 security future or any put, call, straddle, option, or 
 privilege on any security future.
 (57)(A) The term ``margin'', when used with respect 
 to a security futures product, means the amount, type, 
 and form of collateral required to secure any extension 
 or maintenance of credit, or the amount, type, and form 
 of collateral required as a performance bond related to 
 the purchase, sale, or carrying of a security futures 
 product.
 (B) The terms ``margin level'' and ``level of 
 margin'', when used with respect to a security futures 
 product, mean the amount of margin required to secure 
 any extension or maintenance of credit, or the amount 
 of margin required as a performance bond related to the 
 purchase, sale, or carrying of a security futures 
 product.
 (C) The terms ``higher margin level'' and ``higher 
 level of margin'', when used with respect to a security 
 futures product, mean a margin level established by a 
 national securities exchange registered pursuant to 
 section 6(g) that is higher than the minimum amount 
 established and in effect pursuant to section 
 7(c)(2)(B).
 (58) Audit committee.--The term ``audit committee'' 
 means--
 (A) a committee (or equivalent body) 
 established by and amongst the board of 
 directors of an issuer for the purpose of 
 overseeing the accounting and financial 
 reporting processes of the issuer and audits of 
 the financial statements of the issuer; and
 (B) if no such committee exists with respect 
 to an issuer, the entire board of directors of 
 the issuer.
 (59) Registered public accounting firm.--The term 
 ``registered public accounting firm'' has the same 
 meaning as in section 2 of the Sarbanes-Oxley Act of 
 2002.
 (60) Credit rating.--The term ``credit rating'' means 
 an assessment of the creditworthiness of an obligor as 
 an entity or with respect to specific securities or 
 money market instruments.
 (61) Credit rating agency.--The term ``credit rating 
 agency'' means any person--
 (A) engaged in the business of issuing credit 
 ratings on the Internet or through another 
 readily accessible means, for free or for a 
 reasonable fee, but does not include a 
 commercial credit reporting company;
 (B) employing either a quantitative or 
 qualitative model, or both, to determine credit 
 ratings; and
 (C) receiving fees from either issuers, 
 investors, or other market participants, or a 
 combination thereof.
 (62) Nationally recognized statistical rating 
 organization.--The term ``nationally recognized 
 statistical rating organization'' means a credit rating 
 agency that--
 (A) issues credit ratings certified by 
 qualified institutional buyers, in accordance 
 with section 15E(a)(1)(B)(ix), with respect 
 to--
 (i) financial institutions, brokers, 
 or dealers;
 (ii) insurance companies;
 (iii) corporate issuers;
 (iv) issuers of asset-backed 
 securities (as that term is defined in 
 section 1101(c) of part 229 of title 
 17, Code of Federal Regulations, as in 
 effect on the date of enactment of this 
 paragraph);
 (v) issuers of government securities, 
 municipal securities, or securities 
 issued by a foreign government; or
 (vi) a combination of one or more 
 categories of obligors described in any 
 of clauses (i) through (v); and
 (B) is registered under section 15E.
 (63) Person associated with a nationally recognized 
 statistical rating organization.--The term ``person 
 associated with'' a nationally recognized statistical 
 rating organization means any partner, officer, 
 director, or branch manager of a nationally recognized 
 statistical rating organization (or any person 
 occupying a similar status or performing similar 
 functions), any person directly or indirectly 
 controlling, controlled by, or under common control 
 with a nationally recognized statistical rating 
 organization, or any employee of a nationally 
 recognized statistical rating organization.
 (64) Qualified institutional buyer.--The term 
 ``qualified institutional buyer'' has the meaning given 
 such term in section 230.144A(a) of title 17, Code of 
 Federal Regulations, or any successor thereto.
 (79) Asset-backed security.--The term ``asset-backed 
 security''--
 (A) means a fixed-income or other security 
 collateralized by any type of self-liquidating 
 financial asset (including a loan, a lease, a 
 mortgage, or a secured or unsecured receivable) 
 that allows the holder of the security to 
 receive payments that depend primarily on cash 
 flow from the asset, including--
 (i) a collateralized mortgage 
 obligation;
 (ii) a collateralized debt 
 obligation;
 (iii) a collateralized bond 
 obligation;
 (iv) a collateralized debt obligation 
 of asset-backed securities;
 (v) a collateralized debt obligation 
 of collateralized debt obligations; and
 (vi) a security that the Commission, 
 by rule, determines to be an asset-
 backed security for purposes of this 
 section; and
 (B) does not include a security issued by a 
 finance subsidiary held by the parent company 
 or a company controlled by the parent company, 
 if none of the securities issued by the finance 
 subsidiary are held by an entity that is not 
 controlled by the parent company.
 (65) Eligible contract participant.--The term 
 ``eligible contract participant'' has the same meaning 
 as in section 1a of the Commodity Exchange Act (7 
 U.S.C. 1a).
 (66) Major swap participant.--The term ``major swap 
 participant'' has the same meaning as in section 1a of 
 the Commodity Exchange Act (7 U.S.C. 1a).
 (67) Major security-based swap participant.--
 (A) In general.--The term ``major security-
 based swap participant'' means any person--
 (i) who is not a security-based swap 
 dealer; and
 (ii)(I) who maintains a substantial 
 position in security-based swaps for 
 any of the major security-based swap 
 categories, as such categories are 
 determined by the Commission, excluding 
 both positions held for hedging or 
 mitigating commercial risk and 
 positions maintained by any employee 
 benefit plan (or any contract held by 
 such a plan) as defined in paragraphs 
 (3) and (32) of section 3 of the 
 Employee Retirement Income Security Act 
 of 1974 (29 U.S.C. 1002) for the 
 primary purpose of hedging or 
 mitigating any risk directly associated 
 with the operation of the plan;
 (II) whose outstanding security-based 
 swaps create substantial counterparty 
 exposure that could have serious 
 adverse effects on the financial 
 stability of the United States banking 
 system or financial markets; or
 (III) that is a financial entity 
 that--
 (aa) is highly leveraged 
 relative to the amount of 
 capital such entity holds and 
 that is not subject to capital 
 requirements established by an 
 appropriate Federal banking 
 agency; and
 (bb) maintains a substantial 
 position in outstanding 
 security-based swaps in any 
 major security-based swap 
 category, as such categories 
 are determined by the 
 Commission.
 (B) Definition of substantial position.--For 
 purposes of subparagraph (A), the Commission 
 shall define, by rule or regulation, the term 
 ``substantial position'' at the threshold that 
 the Commission determines to be prudent for the 
 effective monitoring, management, and oversight 
 of entities that are systemically important or 
 can significantly impact the financial system 
 of the United States. In setting the definition 
 under this subparagraph, the Commission shall 
 consider the person's relative position in 
 uncleared as opposed to cleared security-based 
 swaps and may take into consideration the value 
 and quality of collateral held against 
 counterparty exposures.
 (C) Scope of designation.--For purposes of 
 subparagraph (A), a person may be designated as 
 a major security-based swap participant for 1 
 or more categories of security-based swaps 
 without being classified as a major security-
 based swap participant for all classes of 
 security-based swaps.
 (68) Security-based swap.--
 (A) In general.--Except as provided in 
 subparagraph (B), the term ``security-based 
 swap'' means any agreement, contract, or 
 transaction that--
 (i) is a swap, as that term is 
 defined under section 1a of the 
 Commodity Exchange Act (without regard 
 to paragraph (47)(B)(x) of such 
 section); and
 (ii) is based on--
 (I) an index that is a 
 narrow-based security index, 
 including any interest therein 
 or on the value thereof;
 (II) a single security or 
 loan, including any interest 
 therein or on the value 
 thereof; or
 (III) the occurrence, 
 nonoccurrence, or extent of the 
 occurrence of an event relating 
 to a single issuer of a 
 security or the issuers of 
 securities in a narrow-based 
 security index, provided that 
 such event directly affects the 
 financial statements, financial 
 condition, or financial 
 obligations of the issuer.
 (B) Rule of construction regarding master 
 agreements.--The term ``security-based swap'' 
 shall be construed to include a master 
 agreement that provides for an agreement, 
 contract, or transaction that is a security-
 based swap pursuant to subparagraph (A), 
 together with all supplements to any such 
 master agreement, without regard to whether the 
 master agreement contains an agreement, 
 contract, or transaction that is not a 
 security-based swap pursuant to subparagraph 
 (A), except that the master agreement shall be 
 considered to be a security-based swap only 
 with respect to each agreement, contract, or 
 transaction under the master agreement that is 
 a security-based swap pursuant to subparagraph 
 (A).
 (C) Exclusions.--The term ``security-based 
 swap'' does not include any agreement, 
 contract, or transaction that meets the 
 definition of a security-based swap only 
 because such agreement, contract, or 
 transaction references, is based upon, or 
 settles through the transfer, delivery, or 
 receipt of an exempted security under paragraph 
 (12), as in effect on the date of enactment of 
 the Futures Trading Act of 1982 (other than any 
 municipal security as defined in paragraph (29) 
 as in effect on the date of enactment of the 
 Futures Trading Act of 1982), unless such 
 agreement, contract, or transaction is of the 
 character of, or is commonly known in the trade 
 as, a put, call, or other option.
 (D) Mixed swap.--The term ``security-based 
 swap'' includes any agreement, contract, or 
 transaction that is as described in 
 subparagraph (A) and also is based on the value 
 of 1 or more interest or other rates, 
 currencies, commodities, instruments of 
 indebtedness, indices, quantitative measures, 
 other financial or economic interest or 
 property of any kind (other than a single 
 security or a narrow-based security index), or 
 the occurrence, non-occurrence, or the extent 
 of the occurrence of an event or contingency 
 associated with a potential financial, 
 economic, or commercial consequence (other than 
 an event described in subparagraph 
 (A)(ii)(III)).
 (E) Rule of construction regarding use of the 
 term index.--The term ``index'' means an index 
 or group of securities, including any interest 
 therein or based on the value thereof.
 (69) Swap.--The term ``swap'' has the same meaning as 
 in section 1a of the Commodity Exchange Act (7 U.S.C. 
 1a).
 (70) Person associated with a security-based swap 
 dealer or major security-based swap participant.--
 (A) In general.--The term ``person associated 
 with a security-based swap dealer or major 
 security-based swap participant'' or 
 ``associated person of a security-based swap 
 dealer or major security-based swap 
 participant'' means--
 (i) any partner, officer, director, 
 or branch manager of such security-
 based swap dealer or major security-
 based swap participant (or any person 
 occupying a similar status or 
 performing similar functions);
 (ii) any person directly or 
 indirectly controlling, controlled by, 
 or under common control with such 
 security-based swap dealer or major 
 security-based swap participant; or
 (iii) any employee of such security-
 based swap dealer or major security-
 based swap participant.
 (B) Exclusion.--Other than for purposes of 
 section 15F(l)(2), the term ``person associated 
 with a security-based swap dealer or major 
 security-based swap participant'' or 
 ``associated person of a security-based swap 
 dealer or major security-based swap 
 participant'' does not include any person 
 associated with a security-based swap dealer or 
 major security-based swap participant whose 
 functions are solely clerical or ministerial.
 (71) Security-based swap dealer.--
 (A) In general.--The term ``security-based 
 swap dealer'' means any person who--
 (i) holds themself out as a dealer in 
 security-based swaps;
 (ii) makes a market in security-based 
 swaps;
 (iii) regularly enters into security-
 based swaps with counterparties as an 
 ordinary course of business for its own 
 account; or
 (iv) engages in any activity causing 
 it to be commonly known in the trade as 
 a dealer or market maker in security-
 based swaps.
 (B) Designation by type or class.--A person 
 may be designated as a security-based swap 
 dealer for a single type or single class or 
 category of security-based swap or activities 
 and considered not to be a security-based swap 
 dealer for other types, classes, or categories 
 of security-based swaps or activities.
 (C) Exception.--The term ``security-based 
 swap dealer'' does not include a person that 
 enters into security-based swaps for such 
 person's own account, either individually or in 
 a fiduciary capacity, but not as a part of 
 regular business.
 (D) De minimis exception.--The Commission 
 shall exempt from designation as a security-
 based swap dealer an entity that engages in a 
 de minimis quantity of security-based swap 
 dealing in connection with transactions with or 
 on behalf of its customers. The Commission 
 shall promulgate regulations to establish 
 factors with respect to the making of any 
 determination to exempt.
 (72) Appropriate federal banking agency.--The term 
 ``appropriate Federal banking agency'' has the same 
 meaning as in section 3(q) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813(q)).
 (73) Board.--The term ``Board'' means the Board of 
 Governors of the Federal Reserve System.
 (74) Prudential regulator.--The term ``prudential 
 regulator'' has the same meaning as in section 1a of 
 the Commodity Exchange Act (7 U.S.C. 1a).
 (75) Security-based swap data repository.--The term 
 ``security-based swap data repository'' means any 
 person that collects and maintains information or 
 records with respect to transactions or positions in, 
 or the terms and conditions of, security-based swaps 
 entered into by third parties for the purpose of 
 providing a centralized recordkeeping facility for 
 security-based swaps.
 (76) Swap dealer.--The term ``swap dealer'' has the 
 same meaning as in section 1a of the Commodity Exchange 
 Act (7 U.S.C. 1a).
 (77) Security-based swap execution facility.--The 
 term ``security-based swap execution facility'' means a 
 trading system or platform in which multiple 
 participants have the ability to execute or trade 
 security-based swaps by accepting bids and offers made 
 by multiple participants in the facility or system, 
 through any means of interstate commerce, including any 
 trading facility, that--
 (A) facilitates the execution of security-
 based swaps between persons; and
 (B) is not a national securities exchange.
 (78) Security-based swap agreement.--
 (A) In general.--For purposes of sections 9, 
 10, 16, 20, and 21A of this Act, and section 17 
 of the Securities Act of 1933 (15 U.S.C. 77q), 
 the term ``security-based swap agreement'' 
 means a swap agreement as defined in section 
 206A of the Gramm-Leach-Bliley Act (15 U.S.C. 
 78c note) of which a material term is based on 
 the price, yield, value, or volatility of any 
 security or any group or index of securities, 
 or any interest therein.
 (B) Exclusions.--The term ``security-based 
 swap agreement'' does not include any security-
 based swap.
 (80) Emerging growth company.--The term ``emerging 
 growth company'' means an issuer that had total annual 
 gross revenues of less than $1,000,000,000 (as such 
 amount is indexed for inflation every 5 years by the 
 Commission to reflect the change in the Consumer Price 
 Index for All Urban Consumers published by the Bureau 
 of Labor Statistics, setting the threshold to the 
 nearest 1,000,000) during its most recently completed 
 fiscal year. An issuer that is an emerging growth 
 company as of the first day of that fiscal year shall 
 continue to be deemed an emerging growth company until 
 the earliest of--
 (A) the last day of the fiscal year of the 
 issuer during which it had total annual gross 
 revenues of $1,000,000,000 (as such amount is 
 indexed for inflation every 5 years by the 
 Commission to reflect the change in the 
 Consumer Price Index for All Urban Consumers 
 published by the Bureau of Labor Statistics, 
 setting the threshold to the nearest 1,000,000) 
 or more;
 (B) the last day of the fiscal year of the 
 issuer following the fifth anniversary of the 
 date of the first sale of common equity 
 securities of the issuer pursuant to an 
 effective registration statement under the 
 Securities Act of 1933;
 (C) the date on which such issuer has, during 
 the previous 3-year period, issued more than 
 $1,000,000,000 in non-convertible debt; or
 (D) the date on which such issuer is deemed 
 to be a ``large accelerated filer'', as defined 
 in section 240.12b-2 of title 17, Code of 
 Federal Regulations, or any successor thereto.
 (80) Funding portal.--The term ``funding portal'' 
 means any person acting as an intermediary in a 
 transaction involving the offer or sale of securities 
 for the account of others, solely pursuant to section 
 4(6) of the Securities Act of 1933 (15 U.S.C. 77d(6)), 
 that does not--
 (A) offer investment advice or 
 recommendations;
 (B) solicit purchases, sales, or offers to 
 buy the securities offered or displayed on its 
 website or portal;
 (C) compensate employees, agents, or other 
 persons for such solicitation or based on the 
 sale of securities displayed or referenced on 
 its website or portal;
 (D) hold, manage, possess, or otherwise 
 handle investor funds or securities; or
 (E) engage in such other activities as the 
 Commission, by rule, determines appropriate.
 (b) The Commission and the Board of Governors of the Federal 
Reserve System, as to matters within their respective 
jurisdictions, shall have power by rules and regulations to 
define technical, trade, accounting, and other terms used in 
this title, consistently with the provisions and purposes of 
this title.
 (c) No provision of this title shall apply to, or be deemed 
to include, any executive department or independent 
establishment of the United States, or any lending agency which 
is wholly owned, directly or indirectly, by the United States, 
or any officer, agent, or employee of any such department, 
establishment, or agency, acting in the course of his official 
duty as such, unless such provision makes specific reference to 
such department, establishment, or agency.
 (d) No issuer of municipal securities or officer or employee 
thereof acting in the course of his official duties as such 
shall be deemed to be a ``broker'', ``dealer'', or ``municipal 
securities dealer'' solely by reason of buying, selling, or 
effecting transactions in the issuer's securities.
 (e) Charitable Organizations.--
 (1) Exemption.--Notwithstanding any other provision 
 of this title, but subject to paragraph (2) of this 
 subsection, a charitable organization, as defined in 
 section 3(c)(10)(D) of the Investment Company Act of 
 1940, or any trustee, director, officer, employee, or 
 volunteer of such a charitable organization acting 
 within the scope of such person's employment or duties 
 with such organization, shall not be deemed to be a 
 ``broker'', ``dealer'', ``municipal securities 
 broker'', ``municipal securities dealer'', ``government 
 securities broker'', or ``government securities 
 dealer'' for purposes of this title solely because such 
 organization or person buys, holds, sells, or trades in 
 securities for its own account in its capacity as 
 trustee or administrator of, or otherwise on behalf of 
 or for the account of--
 (A) such a charitable organization;
 (B) a fund that is excluded from the 
 definition of an investment company under 
 section 3(c)(10)(B) of the Investment Company 
 Act of 1940; or
 (C) a trust or other donative instrument 
 described in section 3(c)(10)(B) of the 
 Investment Company Act of 1940, or the settlors 
 (or potential settlors) or beneficiaries of any 
 such trust or other instrument.
 (2) Limitation on compensation.--The exemption 
 provided under paragraph (1) shall not be available to 
 any charitable organization, or any trustee, director, 
 officer, employee, or volunteer of such a charitable 
 organization, unless each person who, on or after 90 
 days after the date of enactment of this subsection, 
 solicits donations on behalf of such charitable 
 organization from any donor to a fund that is excluded 
 from the definition of an investment company under 
 section 3(c)(10)(B) of the Investment Company Act of 
 1940, is either a volunteer or is engaged in the 
 overall fund raising activities of a charitable 
 organization and receives no commission or other 
 special compensation based on the number or the value 
 of donations collected for the fund.
 (f) Consideration of Promotion of Efficiency, Competition, 
and Capital Formation.--Whenever pursuant to this title the 
Commission is engaged in rulemaking, or in the review of a rule 
of a self-regulatory organization, and is required to consider 
or determine whether an action is necessary or appropriate in 
the public interest, the Commission shall also consider, in 
addition to the protection of investors, whether the action 
will promote efficiency, competition, and capital formation.
 (g) Church Plans.--No church plan described in section 414(e) 
of the Internal Revenue Code of 1986, no person or entity 
eligible to establish and maintain such a plan under the 
Internal Revenue Code of 1986, no company or account that is 
excluded from the definition of an investment company under 
section 3(c)(14) of the Investment Company Act of 1940, and no 
trustee, director, officer or employee of or volunteer for such 
plan, company, account, person, or entity, acting within the 
scope of that person's employment or activities with respect to 
such plan, shall be deemed to be a ``broker'', ``dealer'', 
``municipal securities broker'', ``municipal securities 
dealer'', ``government securities broker'', ``government 
securities dealer'', ``clearing agency'', or ``transfer agent'' 
for purposes of this title--
 (1) solely because such plan, company, person, or 
 entity buys, holds, sells, trades in, or transfers 
 securities or acts as an intermediary in making 
 payments in connection with transactions in securities 
 for its own account in its capacity as trustee or 
 administrator of, or otherwise on behalf of, or for the 
 account of, any church plan, company, or account that 
 is excluded from the definition of an investment 
 company under section 3(c)(14) of the Investment 
 Company Act of 1940; and
 (2) if no such person or entity receives a commission 
 or other transaction-related sales compensation in 
 connection with any activities conducted in reliance on 
 the exemption provided by this subsection.
 (h) Limited Exemption for Funding Portals.--
 (1) In general.--The Commission shall, by rule, 
 exempt, conditionally or unconditionally, a registered 
 funding portal from the requirement to register as a 
 broker or dealer under section 15(a)(1), provided that 
 such funding portal--
 (A) remains subject to the examination, 
 enforcement, and other rulemaking authority of 
 the Commission;
 (B) is a member of a national securities 
 association registered under section 15A; and
 (C) is subject to such other requirements 
 under this title as the Commission determines 
 appropriate under such rule.
 (2) National securities association membership.--For 
 purposes of sections 15(b)(8) and 15A, the term 
 ``broker or dealer'' includes a funding portal and the 
 term ``registered broker or dealer'' includes a 
 registered funding portal, except to the extent that 
 the Commission, by rule, determines otherwise, provided 
 that a national securities association shall only 
 examine for and enforce against a registered funding 
 portal rules of such national securities association 
 written specifically for registered funding portals.

 * * * * * * *

 registration requirements for securities

 Sec. 12. (a) It shall be unlawful for any member, broker, or 
dealer to effect any transaction in any security (other than an 
exempted security) on a national securities exchange unless a 
registration is effective as to such security for such exchange 
in accordance with the provisions of this title and the rules 
and regulations thereunder. The provisions of this subsection 
shall not apply in respect of a security futures product traded 
on a national securities exchange.
 (b) A security may be registered on a national securities 
exchange by the issuer filing an application with the exchange 
(and filing with the Commission such duplicate originals 
thereof as the Commission may require), which application shall 
contain--
 (1) Such information, in such detail, as to the 
 issuer and any person directly or indirectly 
 controlling or controlled by, or under direct or 
 indirect common control with, the issuer, and any 
 guarantor of the security as to principal or interest 
 or both, as the Commission may by rules and regulations 
 require, as necessary or appropriate in the public 
 interest or for the protection of investors, in respect 
 of the following:
 (A) the organization, financial structures, 
 and nature of the business;
 (B) the terms, position, rights, and 
 privileges of the different classes of 
 securities outstanding;
 (C) the terms on which their securities are 
 to be, and during the preceding three years 
 have been, offered to the public or otherwise;
 (D) the directors, officers, and 
 underwriters, and each security holder of 
 record holding more than 10 per centum of any 
 class of any equity security of the issuer 
 (other than an exempted security), their 
 remuneration and their interests in the 
 securities of, and their material contracts 
 with, the issuer and any person directly or 
 indirectly controlling or controlled by, or 
 under direct or indirect common control with, 
 the issuer;
 (E) remuneration to others than directors and 
 officers exceeding $20,000 per annum;
 (F) bonus and profit-sharing arrangements;
 (G) management and service contracts;
 (H) options existing or to be created in 
 respect of their securities;
 (I) material contracts, not made in the 
 ordinary course of business, which are to be 
 executed in whole or in part at or after the 
 filing of the application or which were made 
 not more than two years before such filing, and 
 every material patent or contract for a 
 material patent right shall be deemed a 
 material contract;
 (J) balance sheets for not more than the 
 three preceding fiscal years, certified if 
 required by the rules and regulations of the 
 Commission by a registered public accounting 
 firm;
 (K) profit and loss statements for not more 
 than the three preceding fiscal years, 
 certified if required by the rules and 
 regulations of the Commission by a registered 
 public accounting firm; and
 (L) any further financial statements which 
 the Commission may deem necessary or 
 appropriate for the protection of investors.
 (2) Such copies of articles of incorporation, bylaws, 
 trust indentures, or corresponding documents by 
 whatever name known, underwriting arrangements, and 
 other similar documents of, and voting trust agreements 
 with respect to, the issuer and any person directly or 
 indirectly controlling or controlled by, or under 
 direct or indirect common control with, the issuer as 
 the Commission may require as necessary or appropriate 
 for the proper protection of investors and to insure 
 fair dealing in the security.
 (3) Such copies of material contracts, referred to in 
 paragraph (1)(I) above, as the Commission may require 
 as necessary or appropriate for the proper protection 
 of investors and to insure fair dealing in the 
 security.
 (c) If in the judgment of the Commission any information 
required under subsection (b) of this section is inapplicable 
to any specified class or classes of issuers, the Commission 
shall require in lieu thereof the submission of such other 
information of comparable character as it may deem applicable 
to such class of issuers.
 (d) 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 receipt of such certification by the 
Commission or within such shorter period of time as the 
Commission may determine. A security registered with a national 
securities exchange may be withdrawn or stricken from listing 
and registration in accordance with the rules of the exchange 
and, upon such terms as the Commission may deem necessary to 
impose for the protection of investors, upon application by the 
issuer or the exchange to the Commission; whereupon the issuer 
shall be relieved from further compliance with the provisions 
of this section and section 13 of this title and any rules or 
regulations under such sections as to the securities so 
withdrawn or stricken. An unissued security may be registered 
only 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.
 (e) Notwithstanding the foregoing provisions of this section, 
the Commission may by such rules and regulations as it deems 
necessary or appropriate in the public interest or for the 
protection of investors permit securities listed on any 
exchange at the time the registration of such exchange as a 
national securities exchange becomes effective, to be 
registered for a period ending not later than July 1, 1935, 
without complying with the provisions of this section.
 (f)(1)(A) Notwithstanding the preceding subsections of this 
section, any national securities exchange, in accordance with 
the requirements of this subsection and the rules hereunder, 
may extend unlisted trading privileges to--
 (i) any security that is listed and registered on a 
 national securities exchange, subject to subparagraph 
 (B); and
 (ii) any security that is otherwise registered 
 pursuant to this section, or that would be required to 
 be so registered except for the exemption from 
 registration provided in subparagraph (B) or (G) of 
 subsection (g)(2), subject to subparagraph (E) of this 
 paragraph.
 (B) A national securities exchange may not extend unlisted 
trading privileges to a security described in subparagraph 
(A)(i) during such interval, if any, after the commencement of 
an initial public offering of such security, as is or may be 
required pursuant to subparagraph (C).
 (C) Not later than 180 days after the date of enactment of 
the Unlisted Trading Privileges Act of 1994, the Commission 
shall prescribe, by rule or regulation, the duration of the 
interval referred to in subparagraph (B), if any, as the 
Commission determines to be necessary or appropriate for the 
maintenance of fair and orderly markets, the protection of 
investors and the public interest, or otherwise in furtherance 
of the purposes of this title. Until the earlier of the 
effective date of such rule or regulation or 240 days after 
such date of enactment, such interval shall begin at the 
opening of trading on the day on which such security commences 
trading on the national securities exchange with which such 
security is registered and end at the conclusion of the next 
day of trading.
 (D) The Commission may prescribe, by rule or regulation such 
additional procedures or requirements for extending unlisted 
trading privileges to any security as the Commission deems 
necessary or appropriate for the maintenance of fair and 
orderly markets, the protection of investors and the public 
interest, or otherwise in furtherance of the purposes of this 
title.
 (E) No extension of unlisted trading privileges to securities 
described in subparagraph (A)(ii) may occur except pursuant to 
a rule, regulation, or order of the Commission approving such 
extension or extensions. In promulgating such rule or 
regulation or in issuing such order, the Commission--
 (i) shall find that such extension or extensions of 
 unlisted trading privileges is consistent with the 
 maintenance of fair and orderly markets, the protection 
 of investors and the public interest, and otherwise in 
 furtherance of the purposes of this title;
 (ii) shall take account of the public trading 
 activity in such securities, the character of such 
 trading, the impact of such extension on the existing 
 markets for such securities, and the desirability of 
 removing impediments to and the progress that has been 
 made toward the development of a national market 
 system; and
 (iii) shall not permit a national securities exchange 
 to extend unlisted trading privileges to such 
 securities if any rule of such national securities 
 exchange would unreasonably impair the ability of a 
 dealer to solicit or effect transactions in such 
 securities for its own account, or would unreasonably 
 restrict competition among dealers in such securities 
 or between such dealers acting in the capacity of 
 market makers who are specialists and such dealers who 
 are not specialists.
 (F) An exchange may continue to extend unlisted trading 
privileges in accordance with this paragraph only if the 
exchange and the subject security continue to satisfy the 
requirements for eligibility under this paragraph, including 
any rules and regulations issued by the Commission pursuant to 
this paragraph, except that unlisted trading privileges may 
continue with regard to securities which had been admitted on 
such exchange prior to July 1, 1964, notwithstanding the 
failure to satisfy such requirements. If unlisted trading 
privileges in a security are discontinued pursuant to this 
subparagraph, the exchange shall cease trading in that 
security, unless the exchange and the subject security 
thereafter satisfy the requirements of this paragraph and the 
rules issued hereunder.
 (G) For purposes of this paragraph--
 (i) a security is the subject of an initial public 
 offering if--
 (I) the offering of the subject security is 
 registered under the Securities Act of 1933; 
 and
 (II) the issuer of the security, immediately 
 prior to filing the registration statement with 
 respect to the offering, was not subject to the 
 reporting requirements of section 13 or 15(d) 
 of this title; and
 (ii) an initial public offering of such security 
 commences at the opening of trading on the day on which 
 such security commences trading on the national 
 securities exchange with which such security is 
 registered.
 (2)(A) At any time within 60 days of commencement of trading 
on an exchange of a security pursuant to unlisted trading 
privileges, the Commission may summarily suspend such unlisted 
trading privileges on the exchange. Such suspension shall not 
be reviewable under section 25 of this title and shall not be 
deemed to be a final agency action for purposes of section 704 
of title 5, United States Code. Upon such suspension--
 (i) the exchange shall cease trading in the security 
 by the close of business on the date of such 
 suspension, or at such time as the Commission may 
 prescribe by rule or order for the maintenance of fair 
 and orderly markets, the protection of investors and 
 the public interest, or otherwise in furtherance of the 
 purposes of this title; and
 (ii) if the exchange seeks to extend unlisted trading 
 privileges to the security, the exchange shall file an 
 application to reinstate its ability to do so with the 
 Commission pursuant to such procedures as the 
 Commission may prescribe by rule or order for the 
 maintenance of fair and orderly markets, the protection 
 of investors and the public interest, or otherwise in 
 furtherance of the purposes of this title.
 (B) A suspension under subparagraph (A) shall remain in 
effect until the Commission, by order, grants approval of an 
application to reinstate, as described in subparagraph (A)(ii).
 (C) A suspension under subparagraph (A) shall not affect the 
validity or force of an extension of unlisted trading 
privileges in effect prior to such suspension.
 (D) The Commission shall not approve an application by a 
national securities exchange to reinstate its ability to extend 
unlisted trading privileges to a security unless the Commission 
finds, after notice and opportunity for hearing, that the 
extension of unlisted trading privileges pursuant to such 
application is consistent with the maintenance of fair and 
orderly markets, the protection of investors and the public 
interest, and otherwise in furtherance of the purposes of this 
title. If the application is made to reinstate unlisted trading 
privileges to a security described in paragraph (1)(A)(ii), the 
Commission--
 (i) shall take account of the public trading activity 
 in such security, the character of such trading, the 
 impact of such extension on the existing markets for 
 such a security, and the desirability of removing 
 impediments to and the progress that has been made 
 toward the development of a national market system; and
 (ii) shall not grant any such application if any rule 
 of the national securities exchange making application 
 under this subsection would unreasonably impair the 
 ability of a dealer to solicit or effect transactions 
 in such security for its own account, or would 
 unreasonably restrict competition among dealers in such 
 security or between such dealers acting in the capacity 
 of marketmakers who are specialists and such dealers 
 who are not specialists.
 (3) Notwithstanding paragraph (2), the Commission shall by 
rules and regulations suspend unlisted trading privileges in 
whole or in part for any or all classes of securities for a 
period not exceeding twelve months, if it deems such suspension 
necessary or appropriate in the public interest or for the 
protection of investors or to prevent evasion of the purposes 
of this title.
 (4) On the application of the issuer of any security for 
which unlisted trading privileges on any exchange have been 
continued or extended pursuant to this subsection, or of any 
broker or dealer who makes or creates a market for such 
security, or of any other person having a bona fide interest in 
the question of termination or suspension of such unlisted 
trading privileges, or on its own motion, the Commission shall 
by order terminate, or suspend for a period not exceeding 
twelve months, such unlisted trading privileges for such 
security if the Commission finds, after appropriate notice and 
opportunity for hearing, that such termination or suspension is 
necessary or appropriate in the public interest or for the 
protection of investors.
 (5) In any proceeding under this subsection in which 
appropriate notice and opportunity for hearing are required, 
notice of not less than ten days to the applicant in such 
proceeding, to the issuer of the security involved, to the 
exchange which is seeking to continue or extend or has 
continued or extended unlisted trading privileges for such 
security, and to the exchange, if any, on which such security 
is listed and registered, shall be deemed adequate notice, and 
any broker or dealer who makes or creates a market for such 
security, and any other person having a bona fide interest in 
such proceeding, shall upon application be entitled to be 
heard.
 (6) Any security for which unlisted trading privileges are 
continued or extended pursuant to this subsection shall be 
deemed to be registered on a national securities exchange 
within the meaning of this title. The powers and duties of the 
Commission under this title shall be applicable to the rules of 
an exchange in respect to any such security. The Commission 
may, by such rules and regulations as it deems necessary or 
appropriate in the public interest or for the protection of 
investors, either unconditionally or upon specified terms and 
conditions, or for stated periods, exempt such securities from 
the operation of any provision of section 13, 14, or 16 of this 
title.
 (g)(1) Every issuer which is engaged in interstate commerce, 
or in a business affecting interstate commerce, or whose 
securities are traded by use of the mails or any means or 
instrumentality of interstate commerce shall--
 (A) within 120 days after the last day of its first 
 fiscal year ended on which the issuer has total assets 
 exceeding $10,000,000 and a class of equity security 
 (other than an exempted security) held of record by 
 either--
 (i) 2,000 persons, or
 (ii) 500 persons who are not accredited investors (as 
 such term is defined by the Commission), and
 (B) in the case of an issuer that is a bank, a 
 savings and loan holding company (as defined in section 
 10 of the Home Owners' Loan Act), or a bank holding 
 company, as such term is defined in section 2 of the 
 Bank Holding Company Act of 1956 (12 U.S.C. 1841), not 
 later than 120 days after the last day of its first 
 fiscal year ended after the effective date of this 
 subsection, on which the issuer has total assets 
 exceeding $10,000,000 and a class of equity security 
 (other than an exempted security) held of record by 
 2,000 or more persons,
register such security by filing with the Commission a 
registration statement (and such copies thereof as the 
Commission may require) with respect to such security 
containing such information and documents as the Commission may 
specify comparable to that which is required in an application 
to register a security pursuant to subsection (b) of this 
section. Each such registration statement shall become 
effective sixty days after filing with the Commission or within 
such shorter period as the Commission may direct. Until such 
registration statement becomes effective it shall not be deemed 
filed for the purposes of section 18 of this title. Any issuer 
may register any class of equity security not required to be 
registered by filing a registration statement pursuant to the 
provisions of this paragraph. The Commission is authorized to 
extend the date upon which any issuer or class of issuers is 
required to register a security pursuant to the provisions of 
this paragraph.
 (2) The provisions of this subsection shall not apply in 
respect of--
 (A) any security listed and registered on a national 
 securities exchange.
 (B) any security issued by an investment company 
 registered pursuant to section 8 of the Investment 
 Company Act of 1940.
 (C) any security, other than permanent stock, 
 guaranty stock, permanent reserve stock, or any similar 
 certificate evidencing nonwithdrawable capital, issued 
 by a savings and loan association, building and loan 
 association, cooperative bank, homestead association, 
 or similar institution, which is supervised and 
 examined by State or Federal authority having 
 supervision over any such institution.
 (D) any security of an issuer organized and operated 
 exclusively for religious, educational, benevolent, 
 fraternal, charitable, or reformatory purposes and not 
 for pecuniary profit, and no part of the net earnings 
 of which inures to the benefit of any private 
 shareholder or individual; or any security of a fund 
 that is excluded from the definition of an investment 
 company under section 3(c)(10)(B) of the Investment 
 Company Act of 1940.
 (E) any security of an issuer which is a 
 ``cooperative association'' as defined in the 
 Agricultural Marketing Act, approved June 15, 1929, as 
 amended, or a federation of such cooperative 
 associations, if such federation possesses no greater 
 powers or purposes than cooperative associations so 
 defined.
 (F) any security issued by a mutual or cooperative 
 organization which supplies a commodity or service 
 primarily for the benefit of its members and operates 
 not for pecuniary profit, but only if the security is 
 part of a class issuable only to persons who purchase 
 commodities or services from the issuer, the security 
 is transferable only to a successor in interest or 
 occupancy of premises serviced or to be served by the 
 issuer, and no dividends are payable to the holder of 
 the security.
 (G) any security issued by an insurance company if 
 all of the following conditions are met:
 (i) Such insurance company is required to and 
 does file an annual statement with the 
 Commissioner of Insurance (or other officer or 
 agency performing a similar function) of its 
 domiciliary State, and such annual statement 
 conforms to that prescribed by the National 
 Association of Insurance Commissioners or in 
 the determination of such State commissioner, 
 officer or agency substantially conforms to 
 that so prescribed.
 (ii) Such insurance company is subject to 
 regulation by its domiciliary State of proxies, 
 consents, or authorizations in respect of 
 securities issued by such company and such 
 regulation conforms to that prescribed by the 
 National Association of Insurance 
 Commissioners.
 (iii) After July 1, 1966, the purchase and 
 sales of securities issued by such insurance 
 company by beneficial owners, directors, or 
 officers of such company are subject to 
 regulation (including reporting) by its 
 domiciliary State substantially in the manner 
 provided in section 16 of this title.
 (H)any interest or participation in any collective 
 trust funds maintained by a bank or in a separate 
 account maintained by an insurance company which 
 interest or participation is issued in connection with 
 (i) a stock-bonus, pension, or profit-sharing plan 
 which meets the requirements for qualification under 
 section 401 of the Internal Revenue Code of 1954, (ii) 
 an annuity plan which meets the requirements for 
 deduction of the employer's contribution under section 
 404(a)(2) of such Code, [or (iii)] (iii) a plan 
 described in section 3(a)(12)(C)(iv) of this Act, or 
 (iv) a church plan, company, or account that is 
 excluded from the definition of an investment company 
 under section 3(c)(14) of the Investment Company Act of 
 1940.
 (3) The Commission may by rules or regulations or, on its own 
motion, after notice and opportunity for hearing, by order, 
exempt from this subsection any security of a foreign issuer, 
including any certificate of deposit for such a security, if 
the Commission finds that such exemption is in the public 
interest and is consistent with the protection of investors.
 (4) Registration of any class of security pursuant to this 
subsection shall be terminated ninety days, or such shorter 
period as the Commission may determine, after the issuer files 
a certification with the Commission that the number of holders 
of record of such class of security is reduced to less than 300 
persons, or, in the case of a bank, a savings and loan holding 
company (as defined in section 10 of the Home Owners' Loan 
Act), or a bank holding company, as such term is defined in 
section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841), 1,200 persons persons. The Commission shall after notice 
and opportunity for hearing deny termination of registration if 
it finds that the certification is untrue. Termination of 
registration shall be deferred pending final determination on 
the question of denial.
 (5) For the purposes of this subsection the term ``class'' 
shall include all securities of an issuer which are of 
substantially similar character and the holders of which enjoy 
substantially similar rights and privileges. The Commission may 
for the purpose of this subsection define by rules and 
regulations the terms ``total assets'' and ``held of record'' 
as it deems necessary or appropriate in the public interest or 
for the protection of investors in order to prevent 
circumvention of the provisions of this subsection. For 
purposes of this subsection, a security futures product shall 
not be considered a class of equity security of the issuer of 
the securities underlying the security futures product. For 
purposes of determining whether an issuer is required to 
register a security with the Commission pursuant to paragraph 
(1), the definition of ``held of record'' shall not include 
securities held by persons who received the securities pursuant 
to an employee compensation plan in transactions exempted from 
the registration requirements of section 5 of the Securities 
Act of 1933.
 (6) Exclusion for persons holding certain 
 securities.--The Commission shall, by rule, exempt, 
 conditionally or unconditionally, securities acquired 
 pursuant to an offering made under section 4(6) of the 
 Securities Act of 1933 from the provisions of this 
 subsection.
 (h) The Commission may by rules and regulations, or upon 
application of an interested person, by order, after notice and 
opportunity for hearing, exempt in whole or in part any issuer 
or class of issuers from the provisions of subsection (g) of 
this section or from section 13, 14, or 15(d) or may exempt 
from section 16 any officer, director, or beneficial owner of 
securities of any issuer, any security of which is required to 
be registered pursuant to subsection (g) hereof, upon such 
terms and conditions and for such period as it deems necessary 
or appropriate, if the Commission finds, by reason of the 
number of public investors, amount of trading interest in the 
securities, the nature and extent of the activities of the 
issuer, income or assets of the issuer, or otherwise, that such 
action is not inconsistent with the public interest or the 
protection of investors. The Commission may, for the purposes 
of any of the above-mentioned sections or subsections of this 
title, classify issuers and prescribe requirements appropriate 
for each such class.
 (i) In respect of any securities issued by banks and savings 
associations the deposits of which are insured in accordance 
with the Federal Deposit Insurance Act, the powers, functions, 
and duties vested in the Commission to administer and enforce 
sections 10A(m), 12, 13, 14(a), 14(c), 14(d), 14(f), and 16 of 
this Act, and sections 302, 303, 304, 306, 401(b), 404, 406, 
and 407 of the Sarbanes-Oxley Act of 2002, (1) with respect to 
national banks and Federal savings associations, the accounts 
of which are insured by the Federal Deposit Insurance 
Corporation are vested in the Comptroller of the Currency, (2) 
with respect to all other member banks of the Federal Reserve 
System are vested in the Board of Governors of the Federal 
Reserve System, and (3) with respect to all other insured banks 
and State savings associations, the accounts of which are 
insured by the Federal Deposit Insurance Corporation, are 
vested in the Federal Deposit Insurance Corporation. The 
Comptroller of the Currency, the Board of Governors of the 
Federal Reserve System, and the Federal Deposit Insurance 
Corporation shall have the power to make such rules and 
regulations as may be necessary for the execution of the 
functions vested in them as provided in this subsection. In 
carrying out their responsibilities under this subsection, the 
agencies named in the first sentence of this subsection shall 
issue substantially similar regulations to regulations and 
rules issued by the Commission under sections 10A(m), 12, 13, 
14(a), 14(c), 14(d), 14(f) and 16 of this Act, and sections 
302, 303, 304, 306, 401(b), 404, 406, and 407 of the Sarbanes-
Oxley Act of 2002, unless they find that implementation of 
substantially similar regulations with respect to insured banks 
and insured institutions are not necessary or appropriate in 
the public interest or for protection of investors, and publish 
such findings, and the detailed reasons therefor, in the 
Federal Register. Such regulations of the above-named agencies, 
or the reasons for failure to publish such substantially 
similar regulations to those of the Commission, shall be 
published in the Federal Register within 120 days of the date 
of enactment of this subsection, and, thereafter, within 60 
days of any changes made by the Commission in its relevant 
regulations and rules.
 (j) The Commission is authorized, by order, as it deems 
necessary or appropriate for the protection of investors to 
deny, to suspend the effective date of, to suspend for a period 
not exceeding twelve months, or to revoke the registration of a 
security, if the Commission finds, on the record after notice 
and opportunity for hearing, that the issuer of such security 
has failed to comply with any provision of this title or the 
rules and regulations thereunder. No member of a national 
securities exchange, broker, or dealer shall make use of the 
mails or any means or instrumentality of interstate commerce to 
effect any transaction in, or to induce the purchase or sale 
of, any security the registration of which has been and is 
suspended or revoked pursuant to the preceding sentence.
 (k) Trading Suspensions; Emergency Authority.--
 (1) Trading suspensions.--If in its opinion the 
 public interest and the protection of investors so 
 require, the Commission is authorized by order--
 (A) summarily to suspend trading in any 
 security (other than an exempted security) for 
 a period not exceeding 10 business days, and
 (B) summarily to suspend all trading on any 
 national securities exchange or otherwise, in 
 securities other than exempted securities, for 
 a period not exceeding 90 calendar days.
 The action described in subparagraph (B) shall not take 
 effect unless the Commission notifies the President of 
 its decision and the President notifies the Commission 
 that the President does not disapprove of such 
 decision. If the actions described in subparagraph (A) 
 or (B) involve a security futures product, the 
 Commission shall consult with and consider the views of 
 the Commodity Futures Trading Commission.
 (2) Emergency orders.--
 (A) In general.--The Commission, in an 
 emergency, may by order summarily take such 
 action to alter, supplement, suspend, or impose 
 requirements or restrictions with respect to 
 any matter or action subject to regulation by 
 the Commission or a self-regulatory 
 organization under the securities laws, as the 
 Commission determines is necessary in the 
 public interest and for the protection of 
 investors--
 (i) to maintain or restore fair and 
 orderly securities markets (other than 
 markets in exempted securities);
 (ii) to ensure prompt, accurate, and 
 safe clearance and settlement of 
 transactions in securities (other than 
 exempted securities); or
 (iii) to reduce, eliminate, or 
 prevent the substantial disruption by 
 the emergency of--
 (I) securities markets (other 
 than markets in exempted 
 securities), investment 
 companies, or any other 
 significant portion or segment 
 of such markets; or
 (II) the transmission or 
 processing of securities 
 transactions (other than 
 transactions in exempted 
 securities).
 (B) Effective period.--An order of the 
 Commission under this paragraph shall continue 
 in effect for the period specified by the 
 Commission, and may be extended. Except as 
 provided in subparagraph (C), an order of the 
 Commission under this paragraph may not 
 continue in effect for more than 10 business 
 days, including extensions.
 (C) Extension.--An order of the Commission 
 under this paragraph may be extended to 
 continue in effect for more than 10 business 
 days if, at the time of the extension, the 
 Commission finds that the emergency still 
 exists and determines that the continuation of 
 the order beyond 10 business days is necessary 
 in the public interest and for the protection 
 of investors to attain an objective described 
 in clause (i), (ii), or (iii) of subparagraph 
 (A). In no event shall an order of the 
 Commission under this paragraph continue in 
 effect for more than 30 calendar days.
 (D) Security futures.--If the actions 
 described in subparagraph (A) involve a 
 security futures product, the Commission shall 
 consult with and consider the views of the 
 Commodity Futures Trading Commission.
 (E) Exemption.--In exercising its authority 
 under this paragraph, the Commission shall not 
 be required to comply with the provisions of--
 (i) section 19(c); or
 (ii) section 553 of title 5, United 
 States Code.
 (3) Termination of emergency actions by president.--
 The President may direct that action taken by the 
 Commission under paragraph (1)(B) or paragraph (2) of 
 this subsection shall not continue in effect.
 (4) Compliance with orders.--No member of a national 
 securities exchange, broker, or dealer shall make use 
 of the mails or any means or instrumentality of 
 interstate commerce to effect any transaction in, or to 
 induce the purchase or sale of, any security in 
 contravention of an order of the Commission under this 
 subsection unless such order has been stayed, modified, 
 or set aside as provided in paragraph (5) of this 
 subsection or has ceased to be effective upon direction 
 of the President as provided in paragraph (3).
 (5) Limitations on review of orders.--An order of the 
 Commission pursuant to this subsection shall be subject 
 to review only as provided in section 25(a) of this 
 title. Review shall be based on an examination of all 
 the information before the Commission at the time such 
 order was issued. The reviewing court shall not enter a 
 stay, writ of mandamus, or similar relief unless the 
 court finds, after notice and hearing before a panel of 
 the court, that the Commission's action is arbitrary, 
 capricious, an abuse of discretion, or otherwise not in 
 accordance with law.
 (6) Consultation.--Prior to taking any action 
 described in paragraph (1)(B), the Commission shall 
 consult with and consider the views of the Secretary of 
 the Treasury, the Board of Governors of the Federal 
 Reserve System, and the Commodity Futures Trading 
 Commission, unless such consultation is impracticable 
 in light of the emergency.
 (7) Definition.--For purposes of this subsection, the 
 term ``emergency'' means--
 (A) a major market disturbance characterized 
 by or constituting--
 (i) sudden and excessive fluctuations 
 of securities prices generally, or a 
 substantial threat thereof, that 
 threaten fair and orderly markets; or
 (ii) a substantial disruption of the 
 safe or efficient operation of the 
 national system for clearance and 
 settlement of transactions in 
 securities, or a substantial threat 
 thereof; or
 (B) a major disturbance that substantially 
 disrupts, or threatens to substantially 
 disrupt--
 (i) the functioning of securities 
 markets, investment companies, or any 
 other significant portion or segment of 
 the securities markets; or
 (ii) the transmission or processing 
 of securities transactions.
 (l) It shall be unlawful for an issuer, any class of whose 
securities is registered pursuant to this section or would be 
required to be so registered except for the exemption from 
registration provided by subsection (g)(2)(B) or (g)(2)(G) of 
this section, by the use of any means or instrumentality of 
interstate commerce, or of the mails, to issue, either 
originally or upon transfer, any of such securities in a form 
or with a format which contravenes such rules and regulations 
as the Commission may prescribe as necessary or appropriate for 
the prompt and accurate clearance and settlement of 
transactions in securities. The provisions of this subsection 
shall not apply to variable annuity contracts or variable life 
policies issued by an insurance company or its separate 
accounts.

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