15 U.S.C. § 78iii — Functions of self-regulatory organizations

Page 496 TITLE 15—COMMERCE AND TRADE § 78hhh making procedures specified in section 553 of title 5, but the holding of a hearing shall not prevent adoption of any such rule or regulation upon expiration of the notice period specified in subsection (d) of such section and shall not be required to be on a record within the meaning of subchapter II of chapter 5 of such title. (b) Enforcement of actions In the event of the refusal of SIPC to commit its funds or otherwise to act for the protection of customers of any member of SIPC, the Com- mission may apply to the district court of the United States in which the principal office of SIPC is located for an order requiring SIPC to discharge its obligations under this chapter and for such other relief as the court may deem ap- propriate to carry out the purposes of this chap- ter. (c) Examinations and reports (1) Examination of SIPC, etc. The Commission may make such examina- tions and inspections of SIPC and require SIPC to furnish it with such reports and rec- ords or copies thereof as the Commission may consider necessary or appropriate in the public interest or to effectuate the purposes of this chapter. (2) Reports from SIPC As soon as practicable after the close of each fiscal year, SIPC shall submit to the Commis- sion a written report relative to the conduct of its business, and the exercise of the other rights and powers granted by this chapter, during such fiscal year. Such report shall in- clude financial statements setting forth the fi- nancial position of SIPC at the end of such fis- cal year and the results of its operations (in- cluding the source and application of its funds) for such fiscal year. The financial state- ments so included shall be examined by an independent public accountant or firm of inde- pendent public accountants, selected by SIPC and satisfactory to the Commission, and shall be accompanied by the report thereon of such accountant or firm. The Commission shall transmit such report to the President and the Congress with such comment thereon as the Commission may deem appropriate. (Pub. L. 91–598, § 11, formerly § 7, Dec. 30, 1970, 84 Stat. 1652, 1653; renumbered § 11 and amended Pub. L. 95–283, §§ 9, 10, May 21, 1978, 92 Stat. 260, 268.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (b) and (c), was in the original ‘‘this Act’’, meaning Pub. L. 91–598, Dec. 30, 1970, 84 Stat. 1636. For complete classification of this Act to the Code, see Tables. CODIFICATION Section is comprised of section 11 of Pub. L. 91–598. Subsec. (d) of section 11 of Pub. L. 91–598 amended sec- tion 78o of this title. PRIOR PROVISIONS A prior section 11 of Pub. L. 91–598 was renumbered section 15 and is classified to section 78kkk of this title. AMENDMENTS 1978—Subsec. (a). Pub. L. 95–283 substituted ‘‘pursu- ant to section 78ccc(e)(3) and section 78iii(f) of this title’’ for ‘‘or regulations pursuant to section 78ccc(e) and 78iii(f) of this title’’. Statutory Notes and Related Subsidiaries TERMINATION OF REPORTING REQUIREMENTS For termination, effective May 15, 2000, of provisions in subsec. (c)(2) of this section relating to submittal of annual report to Congress, see section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance, and page 191 of House Document No. 103–7. § 78hhh. Examining authority functions Each member of SIPC shall file with such member’s examining authority, or collection agent if a collection agent has been designated pursuant to section 78iii(a) of this title, such in- formation (including reports of, and information with respect to, the gross revenues from the se- curities business of such member, including the composition thereof, transactions in securities effected by such member, and other information with respect to such member’s activities, wheth- er in the securities business or otherwise, in- cluding customer accounts maintained, net cap- ital employed, and activities conducted) as SIPC may determine to be necessary or appropriate for the purpose of making assessments under section 78ddd of this title. The examining au- thority or collection agent shall file with SIPC all or such part of such information (and such compilations and analyses thereof) as SIPC, by bylaw or rule, shall prescribe. No application, report, or document filed pursuant to this sec- tion shall be deemed to be filed pursuant to sec- tion 78r of this title. (Pub. L. 91–598, § 12, formerly § 8, Dec. 30, 1970, 84 Stat. 1653; renumbered § 12 and amended Pub. L. 95–283, §§ 9, 11, May 21, 1978, 92 Stat. 260, 268.) Editorial Notes PRIOR PROVISIONS A prior section 12 of Pub. L. 91–598 was renumbered section 16 and is classified to section 78lll of this title. AMENDMENTS 1978—Pub. L. 95–283 inserted provisions relating to ap- plicability to a collection agent. § 78iii. Functions of self-regulatory organizations (a) Collection agent Each self-regulatory organization shall act as collection agent for SIPC to collect the assess- ments payable by all members of SIPC for whom such self-regulatory organization is the exam- ining authority, unless SIPC designates a self- regulatory organization other than the exam- ining authority to act as collection agent for any member of SIPC who is a member of or par- ticipant in more than one self-regulatory orga- nization. If the only self-regulatory organization of which a member of SIPC is a member or in which it is a participant is a registered clearing agency that is not the examining authority for the member, SIPC may, nevertheless, designate such registered clearing agency as collection Page 497 TITLE 15—COMMERCE AND TRADE § 78jjj agent for the member or may require that pay- ments be made directly to SIPC. The collection agent shall be obligated to remit to SIPC assess- ments made under section 78ddd of this title only to the extent that payments of such assess- ment are received by such collection agent. Members of SIPC who are not members of or participants in a self-regulatory organization shall make payments directly to SIPC. (b) Immunity No self-regulatory organization shall have any liability to any person for any action taken or omitted in good faith pursuant to section 78eee(a)(1) and section 78eee(a)(2) of this title. (c) Inspections The self-regulatory organization of which a member of SIPC is a member or in which it is a participant shall inspect or examine such mem- ber for compliance with applicable financial re- sponsibility rules, except that— (1) if the self-regulatory organization is a registered clearing agency, the Commission may designate itself as responsible for the ex- amination of such member for compliance with applicable financial responsibility rules; and (2) if a member of SIPC is a member of or participant in more than one self-regulatory organization, the Commission, pursuant to section 78q(d) of this title, shall designate one of such self-regulatory organizations or itself as responsible for the examination of such member for compliance with applicable finan- cial responsibility rules. (d) Reports There shall be filed with SIPC by the self-reg- ulatory organizations such reports of inspec- tions or examinations of the members of SIPC (or copies thereof) as may be designated by SIPC by bylaw or rule. (e) Consultation SIPC shall consult and cooperate with the self-regulatory organizations toward the end: (1) that there may be developed and carried into effect procedures reasonably designed to detect approaching financial difficulty upon the part of any member of SIPC; (2) that, as nearly as may be practicable, ex- aminations to ascertain whether members of SIPC are in compliance with applicable finan- cial responsibility rules will be conducted by the self-regulatory organizations under appro- priate standards (both as to method and scope) and reports of such examinations will, where appropriate, be standard in form; and (3) that, as frequently as may be practicable under the circumstances, each member of SIPC will file financial information with, and be examined by, the self-regulatory organiza- tion which is the examining authority for such member. (f) Financial condition of members The Commission may, by such rules as it de- termines necessary or appropriate in the public interest and to carry out the purposes of this chapter, require any self-regulatory organiza- tion to furnish SIPC with reports and records (or copies thereof) relating to the financial condi- tion of members of or participants in such self- regulatory organization. (Pub. L. 91–598, § 13, formerly § 9, Dec. 30, 1970, 84 Stat. 1654; amended Pub. L. 94–29, § 26, June 4, 1975, 89 Stat. 163; renumbered § 13 and amended Pub. L. 95–283, §§ 9, 12, May 21, 1978, 92 Stat. 260, 269.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (f), was in the original ‘‘this Act’’, meaning Pub. L. 91–598, Dec. 30, 1970, 84 Stat. 1636. For complete classification of this Act to the Code, see Tables. AMENDMENTS 1978—Subsec. (a). Pub. L. 95–283, § 12(a), in heading substituted ‘‘Collection’’ for ‘‘Collecting’’, and in text inserted provisions relating to designation of a self-reg- ulatory organization other than the examining author- ity to act as collection agent and provisions relating to designation of a registered clearing agency as collec- tion agent, and substituted provisions relating to re- mittances by the collection agent to SIPC, for provi- sions relating to remittances by an examining author- ity to SIPC. Subsec. (b). Pub. L. 95–283, § 12(b), inserted reference to section 78eee(a)(2) of this title. Subsec. (c). Pub. L. 95–283, § 12(c), revised existing for- mat and provisions into introductory text and cl. (2) and, as so revised, in introductory text inserted provi- sions respecting participation by a member of SIPC in a self-regulatory organization and in cl. (2) inserted provisions respecting such participation and authoriza- tion for the Commission to designate itself as respon- sible for the statutory examination, and added cl. (1). Subsec. (f). Pub. L. 95–283, § 12(d), substituted provi- sions authorizing the Commission to set out rules re- quiring self-regulatory organizations to furnish SIPC with reports and records of members or participants in such self-regulatory organizations, for provisions au- thorizing the Commission to set out rules, and regula- tions requiring self-regulatory organizations to adopt rules, practices, and procedures respecting inspections and examinations of members and examiners, to fur- nish SIPC and the Commission with reports and records of members, and to inspect or examine members. 1975—Subsec. (c). Pub. L. 94–29 directed the Commis- sion to designate the self-regulatory organization to be responsible for enforcing applicable rules with respect to any firm which is a member of more than one self- regulatory organization. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1975 AMENDMENT Amendment by Pub. L. 94–29 effective June 4, 1975, see section 31(a) of Pub. L. 94–29, set out as a note under section 78b of this title. § 78jjj. Prohibited acts (a) Failure to pay assessment, etc. If a member of SIPC shall fail to file any re- port or information required pursuant to this chapter, or shall fail to pay when due all or any part of an assessment made upon such member pursuant to this chapter, and such failure shall not have been cured, by the filing of such report or information or by the making of such pay- ment, together with interest and penalty there- on, within five days after receipt by such mem- ber of written notice of such failure given by or on behalf of SIPC, it shall be unlawful for such member, unless specifically authorized by the