Page:United States Statutes at Large Volume 52.djvu/1111

 PUBLIC LAWS-CH. 677-JUNE 25, 193S June 25, 1938 [8. 32551 [Public, No. 7191 Securities Exchange Act of 1934, amend- ments. 48 Stat. 895. 15 U. 8. C. §78o; Supp. III, § 780. Associations of bro- kers or dealers, regis- tration as national securities associations, etc. Registration state- ment, form, contents, etc.; documents to accompany. Data as to organiza- tion, membership, etc. Copies of constitu- tion, charter, etc. Registration not a waiver of constitu- tional rights, etc. Regisztation require- ments. Ability to comply with Act. Open to dealers In securities otherwise than on national secu- rities exchange; exep- tion. Provso. Membership re- strictlons. Disqualifieations from membership. [CHAPTER 677] AN ACT To provide for the establishment of a mechanism of regulation among over-the- counter brokers and dealers operating in interstate and foreign commerce or through the mails, to prevent acts and practices inconsistent with just and equitable principles of trade, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Securities Exchange Act of 1934, as amended, is amended by inserting after section 15 thereof the following new section: "SEC. 15A. (a) Any association of brokers or dealers may be reg- istered with the Commission as a national securities association pur- suant to subsection (b), or as an affiliated securities association pur- suant to subsection (d), under the terms and conditions hereinafter provided in this section, by filing with the Commission a registration statement in such form as the Commission may prescribe, setting forth the information, and accompanied by the documents, below specified: "(1) Such data as to its organization, membership, and rules of procedure, and such other information as the Commission may by rules and regulations require as necessary or appropriate in the public interest or for the protection of investors; and "(2) Copies of its constitution, charter, or articles of incor- poratlon or association, with all amendments thereto, and of its existing bylaws, and of any rules or instruments corresponding to the foregoing, whatever the name, hereinafter in this title collectively referred to as the 'rules of the association'. Such registration shall not be construed as a waiver by such asso- ciation or any member thereof of any constitutional right or of any right to contest the validity of any rule or regulation of the Commis- sion under this title. "(b) An applicant association shall not be registered as a national securities association unless it appears to the Commission that- ".(1) by reason of the number of its members, the scope of their transactions, and the geographical distribution of its mem- bers such association will be able to comply with the provisions of this title and the rules and regulations thereunder and to carry out the purposes of this section; "(2) such association is so organized and is of such a charac- ter as to be able to comply with the provisions of this title and the rules and regulations thereunder, and to carry out the purposes of this section; "(3) the rules of the association provide that any broker or dealer who makes use of the mails or of any means or instrumen- tality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security otherwise than on a national securities exchange, may become a member of such association, except such as are excluded pursuant to paragraph (4) of this subsection: Provided, That the rules of the associa- tion may restrict membership in such association on such speci- fied geographical basis or on such specified basis relating to the type of business done by its members, or on such other specified and appropriate basis, as appears to the Commission to be necessary or appropriate in the public interest or for the protection of investors and to carry out the purpose of this section; "(4) the rules of the association provide that, except with the approval or at the direction of the Commission in cases in which the Commission finds it appropriate in the public interest 1070 [52 STAT.

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