Page:United States Statutes at Large Volume 89.djvu/170

 89 STAT. 110 Trading by members of exchanges, brokers, and dealers.

15 USC 78j.

PUBLIC LAW 94-29—JUNE 4, 1975 SEC. 6. Section 11 of the Securities Exchange Act of 1934 (15 U.S.C. 78k) is amended as follows: (1) The title thereof is amended to read: "TRADING BY MEMBERS OF EXCHANGES, BROKERS, AND DEALERS".

(2) Subsections (a) and (b) thereof are amended to read as follows: " (a)(1) I t shall be unlawful for any member of a national securities exchange to effect any transaction on such exchange for its own account, the account of an associated pereon, or an account with respect to which it or an associated person thereof exercises investment discretion: Provided, however, That this paragraph shall not make unlawful— " (A) any transaction by a dealer acting in the capacity of market m a k e r; " (B) any transaction for the account of an odd-lot dealer in a security in which he is so registered; " (C) any stabilizing transaction effected in compliance with rules under section 10(b) of this title to facilitate a distribution of a security in which the member effecting such transaction is participating; " (D) any bona fide arbitrage transaction, any bona fide hedge transaction involving a long or short position in an equity security and a long or short position in a security entitling the holder to acquire or sell such equity security, or any risk arbitrage transaction in connection with a merger, acquisition, tender offer, or similar transaction involving a recapitalization; " (E) any transaction for the account of a natural person, the estate of a n a t u r a l person, or a trust (other than an investment company) created by a natural person for himself or another natural person; " (F) any transaction to offset a transaction made in e r r o r; " (G) any other transaction for a member's own account provided that (i) such member is primarily engaged in the business of underwriting and distributing securities issued by other persons, selling securities to customers, and acting as broker, or any one or more of such activities, and whose gross income normally is derived principally from such business and related activities and (ii) such transaction is effected in compliance with rules of the Commission which, as a minimum, assure that the transaction is not inconsistent with the maintenance of fair and orderly markets and yields priority, parity, and precedence in execution to orders for the account of persons who are not members or associated with members of the exchange; and " (H) any other transaction of a kind which the Commission, by rule, determines is consistent with the purposes of this paragraph, the protection of investors, and the maintenance of fair and orderly markets. " (2) The Commission, by rule, as it deems necessary or appropriate in the public interest and for the protection of investors, to maintain fair and orderly markets, or to assure equal regulation of exchange markets and markets occurring otherwise than on an exchange, may regulate or p r o h i b i t: " (A) transactions on a national securities exchange not unlawful under paragraph (1) of this subsection effected by any member thereof for its own account (unless such member is acting in the capacity of market maker or odd-lot dealer), the account of an associated person, or an account with respect to which such member or an associated person thereof exercises investment discretion:

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