HR 4130 — Small Business Relief Act

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

 SECURITIES EXCHANGE ACT OF 1934

 TITLE I--REGULATION OF SECURITIES EXCHANGES

 * * * * * * *

 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 (that are not a qualified 
 institutional buyer or an institutional accredited 
 investor), 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 (that are not a qualified 
 institutional buyer or an institutional accredited 
 investor),
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) 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.

 * * * * * * *