Page:United States Statutes at Large Volume 48 Part 1.djvu/917

 73d C ONGRESS. SESS. II. CH. 404. JUNE 6, 1934 . 891 unless brought within one year after the discovery of the facts con- stituting the violation and within three years after such violation. (f) The provisions of this section shall not apply to an exempted securit y. REGUL ATION OF THE USE OF MANIPULATIVE AND DECEPTIVE DEVICES SEC. 10. It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange- (a) To effect a short sale, or to use or employ any stop-loss order in connection with the purchase or sale, of any security registered on a national securities exchange, in contravention of such rules and regulations as the Commission may prescribe as necessary or appro- priate in the public interest or for the protection of investors. (b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any secu rity not so regi ster ed, any mani pula tive or dece ptiv e de vice or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interes t or fo r the p rotect ion of investo rs. SEG REG ATI ON AND LIMITATION OF FUNCT IONS OF MEMB ERS, BROKERS, AND DE ALERS P rovis ions not a ppli- cable to exempted se- curities. Regulation of the use of manipu lative and deceptive devices. Unlawful acts. Effect short sale or employ stop-loss order in contravention of reg- ulations. Employ any other manipulative or decep- tive device, etc. Segregation and limi- tation of functions of members, brokers, and dealers. SEC. 11 . a The Commission shall prescribe such rules and re Rules and regula- gu- tions to be prescribed. lations as it deems necessary or appropriate in the public interest or for the protection of investors, (1) to re gulate or prev ent floor Floor trading. trading by members of national securities exchanges, directly or indi rect ly f or t heir own acc ount or for disc reti onar y ac coun ts, and (2) to prevent such excessive trading on the exchange but off the To prevent excessive lation off the floor by members, directly or indirectly for their own account, as the sp floor. ecu Commission may deem detrimental to the maintenance of a fair and orderly market. It shall be unlawful for a member to effect any Secur ity t ransa ction s transaction in a security in contravention of such rules and re gn la- ulatins unlawfu in contravention unlawn l. reg- tions, but such rules and regulations may make such exemptions for Exemptions from reg- arbitrage transactions, for transactions in exempted securities, and, orati ons a uthor ized. within the limitations of subsection (b) of this section, for trans- actions by odd-lot dealers and specialists, as the Commission may deem necessary or appropriate in the public interest or for the protection of investors. (b) When not i n contraventi on of such ru les and regula tions as Registration of odd- the Commission may prescribe as necessary or appropriate in the lot dealers. public interest or for the protection of investors, the rules of a national securities exchange may permit (1) a member to be regis- tered as an odd-lot dealer and as such to buy and sell for his own account so far as may be reasonably necessary to carry on such odd- lot transactions, and/or (2) a member to be registered as a specia list. Speeiallsts ; dealings If under the rules and regulations of the Commission a specialist is limited. permitted to act as a dealer, or is limited to acting as a dealer, such ru les and regula tions shall r estrict his d ealings so far as pr acti- cable to those reasonably necessary to permit him to maintain a fair and orderly market, and/or to those necessary to permit him to act as an odd-lot dealer if the rules of the exchange permit him to act as an odd-lot dealer. It shall be unlawful for a specialist or an Revealing orders to favor ed pe rsons by a pe- official of the exchange to disclose information in regard to orders cialist, etc. placed with such specialist which is not available to all members of the exchange, to any person other than an official of the exchange, a representative of the Commission, or a specialist who may be acting for such specialist ; but the Commission shall have power to require