AUTHORITY: §§ 201.1 to 201.27 issued under secs. 19, 23, 48 Stat. 85, as amended, 901, as amended, sec. 20, 49 Stat. 833, sec. 319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841, 855; 15 U.S.C. 77s, 77sss, 78w, 79t, 80a-37, 80b-11. Additional authority is cited in parentheses following the sections affected.

SOURCE: 201.1 to 201.27 appear at 25 F.R. 6728, July 15, 1960, except as otherwise noted. § 201.1

Scope of rules of practice.

These rules of practice are generally applicable to proceedings before the Commission under the statutes which it administers, particularly those which involve a hearing or opportunity for hearing before the Commission or its duly designated officer. In connection with any particular matter, reference should also be made to any special requirements of procedure and practice that may be

contained in the particular statute involved or the rules and forms adopted by the Commission thereunder, which special requirements are controlling.

§ 201.2

Appearance and practice before the Commission.1

(a) By non-lawyers. An individual may appear in his own behalf, a member of a partnership may represent the partnership, a bona fide officer of a corporation, trust or association may represent the corporation, trust or association, and an officer or employee of a State commission or of a department or political subdivision of a State may represent the State commission or the department or political subdivision of the State, in any proceeding.

(b) By lawyers. A person may be represented in any proceeding by an attorney at law admitted to practice before the Supreme Court of the United States, or the highest court of any State or Territory of the United States, or the Court of Appeals or the District Court of the United States for the District of Columbia.

(c) Representation only as specified. A person shall not be represented at any hearing before the Commission or a hearing officer except as stated in paragraphs (a) and (b) of this section or except as otherwise permitted by the Commission.

(d) Notice of appearance; power of attorney. When an attorney appears before the Commission or a hearing officer in a representative capacity in a particular proceeding which involves a hearing or an opportunity for hearing, he shall file with the Commission a written notice of such appearance, which shall state his name, address and telephone number and the name and address of the person or persons on whose behalf he appears. Any person appearing or practicing before the Commission ir. a representative capacity may be required to file a power of attorney with the Commission showing his authority to act in such capacity.

(e) Suspension and disbarment. The Commission may deny, temporarily or permanently, the privilege of appearing

1 Additional restrictions upon practice by former employees of the Commission are contained in Rule 6 of the Commission's Conduct Regulation (§ 200.36 of this chapter).

or practicing before it in any way to any person who is found by the Commission after notice of and opportunity for hearing in the matter (1) not to possess the requisite qualifications to represent others, or (2) to be lacking in character or integrity or to have engaged in unethical or improper professional conduct.

(f) Contemptuous conduct. Contemptuous conduct at any hearing before the Commission or a hearing officer shall be ground for exclusion from said hearing and for summary suspension without a hearing for the duration of the hearing.

(g) Practice defined. For the purposes of this rule, practicing before the Commission shall include, but shall not be limited to (1) transacting any business with the Commission; and (2) the preparation of any statement, opinion or other paper by any attorney, accountant, engineer or other expert, filed with the Commission in any registration statement, notification, application, report or other document with the consent of such attorney, accountant, engineer or other expert.

§ 201.3 Nonapplicability to

investiga

tions; transcripts in investigations. (a) Nonapplicability of rules of practice. These rules of practice, other than § 201.2(e) and except to the extent to which these sections specifically refer to investigations, shall not be applicable to investigations conducted by the Commission pursuant to sections 8(e), 19(b), and 20(a) of the Securities Act of 1933; section 21(a) of the Securities Exchange Act of 1934; sections 11(a), 13(g), 18(a), 18(b) and 30 of the Public Utility Holding Company Act of 1935; section 321(a) of the Trust Indenture Act of 1939; section 209(a) of the Investment Advisers Act of 1940; or sections 14(b) and 42(a) of the Investment Company Act of 1940.

(b) Right to copy of data or transcript of testimony. A person who has submitted data or evidence in such investigations shall be entitled to retain or procure a copy of his data or a transcript of his testimony on payment of the prescribed fees; provided, however, in the case of non-public investigations such person shall file a written request stating the reason for desiring to procure such copy

or transcript. The Commission may in any non-public investigatory proceeding for good cause deny such request. In the latter event, such person, upon

proper identification, shall have the right to inspect the official transcript of his testimony.

(c) Counsel for witnesses in investigations. Any person compelled to appear in person at an investigation designated in paragraph (a) of this section may be accompanied, represented and advised by counsel, but such counsel may not represent any other witness or any person being investigated, unless permitted in the discretion of the officer conducting the investigation or of the Commission upon being satisfied that there is no conflict of interest in such representation and that the presence of identical counsel for other witnesses or persons being investigated would not tend to hinder the course of the investigation.

§ 201.4 Issuance, amendment and repeal of rules of general application. (a) By petition. Any person desiring the issuance, amendment or repeal of a rule of general application may file a petition therefor with the Secretary of the Commission. Such petition shall include a statement setting forth the text of any proposed rule or amendment desired or specifying the rule, the repeal of which is desired and stating the nature of his interest and his reasons for seeking the issuance, amendment or repeal of the rule. The Secretary shall acknowledge receipt of the petition and refer it to the Commission for such action as the Commission deems appropriate, and shall notify the petitioner of the action taken by the Commission.

(b) Notice of proposed issuance, amendment or repeal of rules. Except where the Commission finds that notice and public procedure are impracticable, unnecessary, or contrary to the public interest, whenever the Commission proposes to issue, amend, or repeal any rule or regulation of general application other than an interpretative rule, general statement of policy, or a rule of agency organization, procedure, or practice, or any matter relating to agency management or personnel or to public property, loans, grants, benefits, or contracts, there shall first be published in the FEDERAL REGISTER a notice of the proposed action. Such notice shall include (1) a statement of the time, place, and nature of the rulemaking proceeding, with particular reference to the manner in which interested persons shall be afforded the op

portunity to participate in such proceedings; (2) reference to the authority under which the rule is proposed; and (3) the terms or substance of the proposed rule or a description of the subjects and issues involved.

§ 201.5 Business hours.

The principal office of the Commission, at 425 Second Street NW., Washington, D.C., is open each day, except Saturdays, Sundays, and holidays, from 9 a.m. to 5:30 p.m., eastern standard time or eastern daylight-saving time, whichever is currently in effect in Washington.

§ 201.6 Notice of proceedings and hearings.

(a) Notice of proceedings; order for proceedings. Whenever an order for proceeding is issued by the Commission, appropriate notice thereof shall be given by the Secretary or other duly designated officer of the Commission to each party to the proceeding and any other person entitled to notice or to the person designated by any such party or person as being authorized to receive on his behalf notices issued by the Commission. The parties or persons entitled to notice shall be timely informed of the time, place and nature of any hearing and the legal authority and jurisdiction under which the hearing is to be held, and furnished a short and simple statement of the matters of fact and law to be considered and determined. In proceedings in which an answer is directed pursuant to § 2017, the order for proceeding shall set forth the action proposed and the factual and legal basis alleged therefor in such detail as will permit a specific response thereto.

(b) Notice of hearing; service of notice. The time and place for any hearing in a proceeding shall be fixed with due regard for the public interest and the convenience and necessity of the parties or their representatives. Each party or person entitled to notice shall be given notice of hearing a reasonable time in advance of the hearing, and such notice may be given by personal service, by confirmed telegraphic notice or, in any proceedings other than those pursuant to section 8 of the Securities Act of 1933 or sections 305 or 307 of the Trust Indenture Act of 1939, by registered mail, addressed to his last known business or residence address or to the address of his agent for service.

(c) Publication of notice of hearing. Unless otherwise ordered by the Commission, notice of any public hearing shall be given general circulation by release to the public press and, where ordered, by publication in the FEDERAL REGISTER.

(d) Amendment of order for proceedings. In any proceeding amendments to the matters of fact and law to be considered may be authorized, for cause shown, by the hearing officer during the course of the hearing, or by the Commission at any time.

§ 201.7

Answers.

(a) When required. In any order for proceeding issued by the Commission, the Commission may direct that any party respondent shall file an answer to the allegations contained in the order for proceeding, and any party in any proceeding may file an answer.

(b) Time to file answer. Except where a different period is provided by rule or by order, a party respondent directed to file an answer as provided in paragraph (a) of this section shall do so within 15. days after service upon him of the order for proceeding. Any other person admitted to such a proceeding (except a a becoming party under person § 201.9(a)) may be required to file an answer within such time as is directed by the hearing officer or the Commission. Where amendments to the matters of fact and law to be considered in such proceeding are authorized subsequent to the institution of the proceeding, the parties may be required to answer within a reasonable time the matters of fact and law to be considered as amended.

(c) Requirements of answer; effect of failure to deny. Unless otherwise directed by the Commission, an answer required by this section shall specifically admit, deny, or state that the party does not have and is unable to obtain sufficient information to admit or deny, each allegation in the order for proceeding. A statement of a lack of information shall have the effect of a denial. Any allegation not denied shall be deemed to be admitted. When a party intends in good faith to deny only a part or a qualification of an allegation, he shall specify so much of it as is true and shall deny only the remainder.

(d) Motion for more definite statement. A party may file, with an answer

required by this section, a motion for a more definite statement of specified matters of fact or law to be considered or determined. Such motion shall state the respects in which, and the reasons why, each such matter of fact or law should be required to be made more definite. If the motion is granted, the order granting such motion will set the periods in which such statement, and any answer thereto, shall be filed.

If

(e) Effect of failure to file answer. a party fails to file an answer required by this section within the time provided, the proceeding may be determined against such party by the Commission upon consideration of the order for proceeding, the allegations of which may be deemed to be true.

(f) Signature on answer; requirement and effect. Every answer filed pursuant to this section shall be signed by the party filing it or by at least one attorney, in his individual name, who represents such party. The signature constitutes a certificate by the signer that he has read the answer; that to the best of his knowledge, information and belief there is good ground to support it; and that it is not interposed for delay.

§ 201.8 Settlements, pre-trial conferences and procedural agreements. (a) Offers of settlement. (1) Parties may propose in writing offers of settlement which shall be submitted to and considered by the interested division of the Commission where time, the nature of the proceeding, and the public interest permit. Such offers may be made at any time during the course of the proceeding; and (2) the interested division shall present an offer of settlement to the Commission with its recommendation, except that where the division's recommendation is unfavorable, the offer shall not be presented to the Commission by the division unless the party making the offer so requests. Where the Commission deems it appropriate, it may also give the party making the offer an opportunity to make an oral presentation to the Commission. Where the Commission rejects an offer of settlement, the party making the offer shall be notified of the Commission's action and the offer of settlement shall be deemed withdrawn and such offer and any documents relating thereto shall not constitute a part of the record. Final acceptance by the

Commission of any offer of settlement will be only by its Findings and Opinion issued in the proceedings.

In

(b) Specification of procedures. any proceeding the moving party shall, in the moving papers or the notice of hearing if that is practicable, or, if not, as early as practicable in the course of the hearing, specify the procedures considered necessary or appropriate in the proceeding, with particular reference to (1) whether there should be a recommended decision by a hearing officer, (2) whether there should be a recommended decision by any other responsible officer of the Commission, (3) whether the interested division of the Commission may assist in the preparation of the Commission's decision, and (4) whether there should be a 30-day waiting period between the issuance of the Commission's order and the date it is to become effective. Any other party may object promptly or within such time as shall be designated by the hearing officer, having due regard to the circumstances of the case, to the procedure so specified and such party may specify such additional procedure as he considers necessary or appropriate; in the absence of such objection or specification of additional procedure, such party may be deemed to have waived objection to the specified procedure and to the omission of any procedure not specified, unless the Commission, for good cause shown and upon taking into account any resulting prejudice to other parties, determines the contrary.

(c) Conferences on procedure; stipulations. The hearing officer on his own motion may, or at the request of any party shall, call a conference of the parties at the opening of the hearing or at any subsequent time for the purpose of specifying and agreeing on the procedural steps to be followed or omitted in the proceeding. Any proposal as to the procedural matters enumerated in paragraph (b) of this section, or, subject to the approval of the hearing officer, any other procedural matter which is agreed upon by all parties present and which is not contrary to any specific provision of this part, shall be embodied in an appropriate stipulation, which shall become part of the record, and shall determine the procedure in that respect, except that the Commission may, upon taking into account any resulting prejudice to the parties, vary

§ 201.9 Parties and limited participation.

(a) Who may become parties; interested division a party. Any interested representative, agency, authority or instrumentality of the United States or any interested State, State commission, municipality or other political subdivision of a State shall become a party to any proceeding upon the filing of a written notice of appearance therein. The interested division of the Commission shall be deemed a party to all proceedings.

(b) Parties in broker-dealer proceedings. In proceedings under sections 15(b), 15A(1) (2) or 19(a)(3) of the Securities Exchange Act of 1934, any person associated with a member of a national securities association, a member of a national securities exchange, a broker or a dealer, whose interests may be affected by the proceedings, shall be entitled to participate as a party. If he participates generally in the proceedings or files a notice of appearance, he shall be deemed a party of record and will be given notices of intermediate developments in the proceedings. In any event he may inform himself of such developments by attendance at the hearings or examination of the record (whether the proceedings be public or private) or by arrangement with a party of record so that he can determine whether he desires to be heard at any time. The term "person associated" as used in this section shall mean a person associated with a member, broker or dealer in any of the capacities specified in sections 15(b) and 15A(b)(4) of the Securities Exchange Act of 1934.

(c) Limited participation; leave to be heard. Any person may, at the discretion of the hearing officer, be given leave to be heard in any proceeding as to any matter affecting his interests. Requests for leave to be heard shall be in writing, shall set forth the nature and extent of

the aplicant's interest in the proceeding, and, except where good cause for late filing is shown, shall be filed not later than 2 days prior to the date fixed for the commencement of the hearing, or where a respondent is required to answer, requests for leave to be heard shall be filed within the time provided for the filing of the answer. The hearing officer or the Commission may direct any person requesting leave to be heard to submit himself to examination as to his interest in the proceeding.

(d) Rights of participant. Leave to be heard pursuant to paragraph (c) of this section may include such rights of a party as the hearing officer may deem appropriate, except that oral argument before the Commission may be permitted only by the Commission upon written request therefor. Persons granted leave to be heard shall be bound, except as may be otherwise determined by the hearing officer, by any stipulation between the parties to the proceeding with respect to procedure, including submission of evidence, substitution of exhibits, corrections of the record, the time within which briefs or exceptions may be filed or proposed findings and conclusions may be submitted, the filing of recommended decisions, the procedure to be followed in the preparation of decisions, and the effective date of the Commission's order in the case. Where the filing of briefs or exceptions or the submission of proposed findings and conclusions are waived by the parties to the proceedings, a person granted leave to be heard pursuant to paragraph (c) of this section shall not be permitted to file a brief or exceptions or submit proposed findings and conclusions except by leave of the Commission or of the hearing officer, if the hearing is pending before the hearing officer. Except as may otherwise be specifically directed by the hearing officer at the request of any person granted leave to be heard, such person shall be expected to inform himself by attendance at public hearings and by examination of the public files of the Commission as to the various steps taken in the proceeding including continuances, the filing of amendments, answers, motions, or briefs by parties to the proceeding, or the fixing of time for any such action, and such person shall not be entitled as of right to other notice thereof, or to service of copies of documents.