Page:United States Statutes at Large Volume 104 Part 1.djvu/1009

 PUBLIC LAW 101-432—OCT. 16, 1990 104 STAT. 975 creation or perfection of security interests in such securities do not provide the necessary certainty, uniformity, and clarity for purchasers, sellers, owners, lenders, borrowers, and financial intermediaries concerning their respective rights and obligations. "(B) The Advisory Committee shall consist of 15 members, of which— "(i) 11 shall be designated by the Commission in accordance with the Federal Advisory Committee Act; and "(ii) 2 each shall be designated by the Board of Governors of the Federal Reserve System and the Secretary of the Treasury. "(C) The Advisory Committee shall conduct its activities in accordance with the Federal Advisory Committee Act. Within 6 months of Reports, its designation, or such longer time as the Commission may designate, the Advisory Committee shall issue a report to the Commission, and shall cause copies of that report to be delivered to the Secretary of the Tresisury and the Chairman of the Board of Governors of the Federal Reserve System.". SEC. 6. LIMITATION ON PRACTICES WHICH RESULT IN VOLATILITY. (a) IN GENERAL.— Section 9 of the Securities Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end thereof the following new subsection: "(h) LIMITATIONS ON PRACTICES THAT AFFECT MARKET VOLA- TiliTY.— It shall be unlawful for any person, by the use of the mails or any means or instrumentality of interstate commerce or of any facility of any national securities exchange, to use or employ any act or practice in connection with the purchase or sale of any equity security in contravention of such rules or regulations as the Commission may adopt, consistent with the public interest, the protection of investors, and the maintenance of fair and orderly markets— "(1) to prescribe means reasonably designed to prevent manipulation of price levels of the equity securities market or a substantial segment thereof; and "(2) to prohibit or constrain, during periods of extraordinary market volatility, any trading practice in connection with the purchase or sale of equity securities that the Commission determines (A) has previously contributed significantly to extraordinary levels of volatility that have threatened the maintenance of fair and orderly markets; and (B) is reasonably certain to engender such levels of volatility if not prohibited or constrained. In adopting rules under paragraph (2), the Commission shall, consistent with the purposes of this subsection, minimize the impact on the normal operations of the market and a natural person's freedom to buy or sell any equity security.". (b) CONFORMING AMENDMENT.— Section 25(b)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78y(b)(l)) is amended by inserting "9(h)(2)," after "section 6,". SEC. 7. NOTIFICATION OF SEC CONCERNING RISKS TO SECURITIES SUBSIDIARY. The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended by adding at the end the following new section:

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