200.41 Disposition of business by seriatim Commission consideration.

Law

200.42 Disposition of business by exercise of authority delegated to individual Commissioner.

Subpart C-Canons of Ethics

200.50

Authority.

200.51 Policy.

200.52 Copies of the Canons. 200.53 Preamble.

200.54 Constitutional obligations.

200.55 Statutory obligations.

200.56 Personal conduct.

200.57 Relationships with other members. 200.58 Maintenance of independence.

200.59 Relationship with persons subject

to regulation.

200.60 Qualification to participate in par

ticular matters.

200.61 Impressions of influence.

200.62 Ex parte communications.

200.63 Commission opinions.

200.64 Judicial review.

200.65 Legislative proposals.

200.66 Investigations.

200.67 Power to adopt rules.

200.68 Promptness.

200.69 Conduct toward parties and their

counsel.

200.70 Business promotions.

200.71 Fiduciary relationships.

200.72 Supervision of internal organization.

Subpart D-Information and Requests

Sec.

200.511 Access by former Presidential appointees.

Subpart K-Regulations Pertaining to the Protection of the Environment

Sec.

200.550 Purpose.
200.551 Applicability.
200.552 NEPA planning.

200.553 Draft, final and supplemental

impact statements.

200.554 Public availability of information.

Subpart L-[Reserved]

Subpart M-Regulation Concerning Conduct of Members and Employees and Former Members and Employees of the Commission

200.735-1 Purpose. 200.735-2 Policy.

200.735-3 General provisions.

200.735-4 Outside or private employment. 200.735-5 Securities transactions.

200.735-6 Action in case of personal interest.

200.735-7 Negotiation for private employment.

200.735-8 Practice by former members and employees of the Commission.

200.735-9 Indebtedness.

200.735-10 Miscellaneous statutory provisions.

200.735-11 Statement of employment and financial interests.

200.735-12 Special Government employees. 200.735-13 Disciplinary and other remedial

action.

200.735-14 Employees on leave of absence. 200.735-15 Interpretative and advisory service.

Subpart A-Organization and Program Management

AUTHORITY: Secs. 19, 23, 48 Stat. 85, 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, 78w, 79t, 77sss, 80a-37, 80b-11, unless otherwise noted.

SOURCE: 27 FR 12712, Dec. 22, 1962, unless otherwise noted.

§ 200.1 General statement and statutory authority.

The Securities and Exchange Commission was created in 1934 under the Securities Exchange Act. That Act transferred to the Commission the administration of the Securities Act of 1933, formerly administered by the Federal Trade Commission. Subse

quent laws assigned to the Securities and Exchange Commission for administration are: Public Utility Holding Company Act of 1935, Trust Indenture Act of 1939, Investment Company Act of 1940, and Investment Advisers Act of 1940. By the terms of Chapter X of the Bankruptcy Act, as amended in 1938, the Commission also serves as adviser to United States District Courts in connection with certain proceedings for the reorganization of debtor corporations. Considered together, the laws administered by the Commission proved for the following.

(a) Public disclosure of pertinent facts concerning public offerings of securities and securities listed on national securities exchanges and certain securities trade in the over-the-counter markets.

(b) Enforcement of disclosure requirements in the soliciting of proxies for meetings of security holders by companies whose securities are registered pursuant to section 12 of the Securities Exchange Act of 1934, public utility holding companies, and their subsidiaries and investment companies.

(c) Regulation of the trading in securities on national securities exchanges and in the over-the-counter markets.

(d) Investigation of securities frauds, manipulations, and other violations, and the imposition and enforcement of legal sanctions therefor.

(e) Registration, and the regulation of certain activities, of brokers, dealers and investment advisers.

(f) Supervision of the activities of mutual funds and other investment companies.

(g) Administration of statutory standards governing protective and other provisions of trust indentures under which debt securities are sold to the public.

(h) Regulation of the purchase and sale of securities, utility properties, and other assets by registered public utility holding companies and their electric and gas utility subsidiaries; enforcement of statutory standards for public utility holding company system simplification and integration; and approval of their reorganization, mergers and consolidations.

(i) Performance of advisory services to Federal courts in corporate reorganization proceedings under Chapter ✗ of the Bankruptcy Act.

(j) Administrative sanctions, injunctive remedies and criminal prosecution. There are also private rights of action for investors injured by violations of the Acts.

(15 U.S.C. 78d-1, 78d-2)

[27 FR 12712, Dec. 22, 1962, as amended at 43 FR 13375, Mar. 30, 1978]

§ 200.2 Statutory functions.

Following are brief descriptions of the Commission's functions under each of the statutes it administers:

(a) Securities Act of 1933. (1) Issuers of securities making public offerings for sale in interstate commerce or through the mails, directly or by others on their behalf, are required to file with the Commission registration statements containing financial and other pertinent data about the issuer and the offering. A similar requirement is provided with respect to such public offerings on behalf of a controlling person of the issuer. Unless a registration statement is in effect with respect to such securities, it is unlawful to sell the securities in interstate commerce or through the mails. (There are certain limited exemptions, such as government securities, non-public offerings, and intrastate offerings.) The effectiveness of a registration statement may be refused or suspended after a hearing if the statement contains material misstatements or omissions, thus barring sale of the securities until it is appropriately amended. Registration is not a finding by the Commission as to the accuracy of the facts disclosed; and it is unlawful so to represent. Moreover, registration of securities does not imply approval of the issue by the Commission or insure investors against loss in their purchase, but serves rather to provide information upon which investors may make an informed and realistic evaluation of the worth of the securities.

(2) Persons responsible for filing false information with the Commission subject themselves to the risk of fine or imprisonment or both; and the issuing company, its directors, officers, and the underwriters and dealers and

others may be liable in damages to purchasers of registered securities if the disclosures in the registration statements and prospectus are materially defective. Also the statute contains antifraud provisions which apply generally to the sale of securities, whether or not registered.

(b) Securities Exchange Act of 1934. This Act requires the filing of registration applications and annual and other reports with national securities exchanges and the Commission, by companies whose securities are listed upon the exchanges. Annual and other reports must be filed also by certain companies whose securities are traded in the over-the-counter markets. These must contain financial and other data prescribed by the Commission for the information of investors. Material misstatements or omissions are grounds for suspension or withdrawal of the security from exchange trading. This Act makes unlawful solicitations of proxies, authorizations or consents from holders of listed securities in contravention of rules prescribed by the Commission. These rules provide for disclosures to securities holders of information relevant to the matters which are the subject of solicitations. The Act also requires disclosure of the holdings and the transactions by officers, directors and large (10%) holders of equity securities of companies having such securities listed on a national securities exchange. The Act also provides for reg. istration with the Commission and for regulation by the Commission of national securities exchanges, brokers and dealers engaged in an over-thecounter securities business, and national associations of such dealers. It gives the Commission rule making power with respect to short sales, stabilizing, floor trading, activities of specialists and odd-lot dealers, and such matters as excessive trading by the exchange members. The Act empowers the Board of Governors of the Federal Reserve System to prescribe minimum margin requirements with respect to listed securities.

(c) Public Utility Holding Comраnу Act of 1935. This Act provides for regulation by the Commission of the purchase and sale of securities, properties,