SECURITIES EXCHANGE ACT OF 19341 AS AMENDED TO AUGUST 10, 1954 [PUBLIC-No. 291-73D CONGRESS] [H. R. 9323] AN ACT stacks DEPOSITED BY THE UNITED STATES OF AMERICA To provide for the regulation of securities exchanges and of over-the-counter markets operating in interstate and foreign commerce and through the mails, to prevent inequitable and unfair practices on such exchanges and markets, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, TITLE I-REGULATIONS OF SECURITIES EXCHANGES SHORT TITLE SECTION 1. This act may be cited as the "Securities Exchange Act of 1934." NECESSITY FOR REGULATION AS PROVIDED IN THIS TITLE SEC. 2. For the reasons hereinafter enumerated, transactions in ecurities as commonly conducted upon securities exchanges and ver-the-counter markets are affected with a national public interest which makes it necessary to provide for regulation and control of uch transactions and of practices and matters related thereto, ncluding transactions by officers, directors, and principal security olders, to require appropriate reports, and to impose requirements ecessary to make such regulation and control reasonably complete nd effective, in order to protect interstate commerce, the national redit, the Federal taxing power, to protect and make more effective he national banking system and Federal Reserve System, and to nsure the maintenance of fair and honest markets in such ransactions: (1) Such transactions (a) are carried on in large volume by the ublic generally and in large part originate outside the States in hich the exchanges and over-the-counter markets are located and/or re effected by means of the mails and instrumentalities of interstate ommerce; (b) constitute an important part of the current of intertate commerce; (c) involve in large part the securities of issuers ngaged in interstate commerce; (d) involve the use of credit, irectly affect the financing of trade, industry, and transportation in nterstate commerce, and directly affect and influence the volume f interstate commerce; and affect the national credit. 1 This pamphlet includes amendments approved on or before August 10, 1954. Amendents are indicated by footnotes or by use of bold-face or italic type. The text prior to mendment, if any, is set forth in the footnotes. Except as otherwise noted, the matter bold-face type represents amendments contained in Public, No. 621, 74th Cong., approved ay 27, 1936, and the matter in italic type represents amendments contained in Public, 0. 719, 75th Cong., approved June 25, 1938. (1) 4 2 (2) The prices established and offered in such transactions are generally disseminated and quoted throughout the United States and foreign countries and constitute a basis for determining and establishing the prices at which securities are bought and sold, the amount of certain taxes owing to the United States and to the several States by owners, buyers, and sellers of securities, and the value of collateral for bank loans. (3) Frequently the prices of securities on such exchanges and markets are susceptible to manipulation and control, and the dissemination of such prices gives rise to excessive speculation, resulting in sudden and unreasonable fluctuations in the prices of securities which (a) cause alternately unreasonable expansion and unreasonable contraction of the volume of credit available for trade, transportation, and industry in interstate commerce, (b) hinder the proper appraisal of the value of securities and thus prevent a fair calculation of taxes owing to the United States and to the several States by owners, buyers, and sellers of securities, and (c) prevent the fair valuation of collateral for bank loans and/or obstruct the effective operation of the national banking system and Federal Reserve System. (4) National emergencies, which produce widespread unemployment and the dislocation of trade, transportation, and industry, and which burden interstate commerce and adversely affect the general welfare, are precipitated, intensified, and prolonged by manipulation and sudden and unreasonable fluctuations of security prices and by excessive speculation on such exchanges and markets, and to meet such emergencies the Federal Government is put to such great expense as to burden the national credit. DEFINITIONS AND APPLICATION OF TITLE SEC. 3. (a) When used in this title, unless the context otherwise requires (1) The term "exchange" means any organization, association, or group of persons, whether incorporated or unincorporated, which constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange as that term is generally understood, and includes the market place and the market facilities maintained by such exchange. (2) The term "facility" when used with respect to an exchange includes its premises, tangible or intangible property whether on the premises or not, any right to the use of such premises or property or any service thereof for the purpose of effecting or reporting a transaction on an exchange (including, among other things, any system of communication to or from the exchange, by ticker or otherwise, maintained by or with the consent of the exchange), and any right of the exchange to the use of any property or service. (3) The term "member" when used with respect to an exchange means any person who is permitted either to effect transactions on the exchange without the services of another person acting as broker, |