Page:United States Statutes at Large Volume 89.djvu/189

 PUBLIC LAW 94-29—JUNE 4, 1975 of any registered securities association and any municipal securities broker who is not a member of any such association, " (3) Nothing in this subsection shall be so construed or applied as to prevent (A) any member of a registered securities association from g r a n t i n g to any other member of any registered securities association any dealer's discount, allowance, commission, or special terms, in connection with the purchase or sale of securities, or (B) any member of a registered securities association or any municipal securities dealer which is a bank or a division or department of a bank from g r a n t i n g to any member of any registered securities association or any such municipal securities dealer any dealer's discount, allowance, commission, or special terms in connection with the purchase or sale of municipal securities: Provided, however, That the g r a n t i n g of any such discount, allowance, commission, or special terms in connection with the purchase or sale of municipal securities shall be subject to rules of the Municipal Securities Rulemaking Board adopted pursuant to section 15B (b)(2)(K) of this title.". (4) The section is further amended by adding at the end thereof the following new subsections: " (g)(1) A registered securities association shall deny membershij) to any person who is not a registered broker or dealer. " (2) A registered securities association may, and in cases in which the Commission, by order, directs as necessary or appropriate in the public interest or for the protection of investors shall, deny membership to any registered broker or dealer, and bar from becoming associated with a member any person, who is subject to a statutory disqualification. A registered securities association shall file notice with the Commission not less than t h i r t y days p r i o r to admitting any registered broker or dealer to membership or permitting any person to become associated with a member, if the association knew, or in the exercise of reasonable care should have known, that such broker or dealer or person was subject to a statutory disqualification. The notice shall be in such form and contain such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. " (3)(A) A registered securities association may deny membership to, or condition the membership of, a registered broker or dealer if (i) such broker or dealer does not meet such standards of financial responsibility or operational capability or such broker or dealer or any natural person associated with such broker or dealer does not meet such standards of training, experience, and competence as are prescribed by the rules of the association or (ii) such broker or dealer or person associated with such broker or dealer has engaged and there is a reasonable likelihood he will again engage in acts or practices inconsistent wnth just and equitable principles of trade. A registered securities association may examine and verify the qualifications of an applicant to become a member and the n a t u r a l persons associated with such an applicant in accordance with procedures established by the rules of the association. " (B) A registered securities association may b a r a natural person from becoming associated with a member or condition the association of a natural person with a member if such natural person (i) does not meet such standards of training, experience, and competence as are prescribed by the rules of the association or (ii) has engaged and there is a reasonable likelihood he will again engage in acts or practices inconsistent with just and equitable principles of trade. A registered securities association may examine and verify the qualifications of an applicant to become a person associated with a member in accordance with procedures established by the rules of the association and require

89 STAT. 129

Post, p. 131. Membership denial 15 USC 78o-3.

Notice,

�