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SEC. 2. Except as otherwise provided in this Act, the 2 provisions of the Securities Exchange Act of 1934 (15 3 U.S.C. 78a and following; hereinafter referred to as the

4 "1934 Act") apply as if this Act constituted an amendment

5 to, and was included as a section of, such Act.

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(1) The term "clearing agency" means any person 8 who engages in providing facilities or serves as a distribu9 tion point for brokers, dealers, or others in accordance with 10 a system (A) for comparison among participants of data 11 respecting the terms of settlement of transactions in secu12 rities; (B) for netting of purchases and sales of securities 13 among participants to reduce the number of settlements of 14 transactions; or (C) for allocation of responsibilities for 15 payment and delivery among itself and participants in con16 nection with the settlement of securities transactions. 17 (2) The term "transfer agent" means any person who 18 engages, on behalf of an issuer, or on behalf of itself as an 19 issuer, of securities registered under section 12 of the 1934 20 Act or of securities which would be required to be so regis21 tered except for the exemption from registration provided 22 by paragraphs (2) (B) or (G) of subsection 12 (g) of 23 the 1934 Act, in: (A) countersigning such securities upon 24 issuance; (B) monitoring the issuance of such securities 25 with a view to preventing unauthorized issuance, a func

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1 tion commonly performed by a person called a registrar; 2 (C) registering the transfer of such securities; or (D)

3 exchanging or converting such securities.

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(3) The term "depository" means any person who acts

as the custodian of securities in accordance with a system 6 whereby: (A) securities so held may (i) be transferred 7 among participants without physical delivery or (ii) be 8 made the subject of a pledge or of a security interest by 9 participants without physical delivery or (B) such custody 10 otherwise plays an integral role in the settlement of securi11 ties transactions among participants.

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(4) The term "participant" when used with respect

to a clearing agency or depository means a person entitled 14 to direct use of the services provided by such clearing 15 agency or depository.

(5) The term "appropriate regulatory agency" means: (i) the Comptroller of the Currency, in the case of

a national bank or a bank operating under the Code of Law for the District of Columbia, or a subsidiary of any

such bank, acting as a transfer agent;

(ii) the Board of Governors of the Federal Reserve

System, in the case of a member bank of the Federal

23 Reserve System (other than a bank referred to in sub

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paragraph (i) above) or a subsidiary thereof, acting

as a transfer agent;

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(iii) the Federal Deposit Insurance Corporation, in the case of a bank insured by the Federal Deposit Insurance Corporation (other than a member of the Federal Reserve System) or a subsidiary thereof, acting as a transfer agent; and

(iv) the Commission, in the case of all other transfer agents and all depositories and clearing agencies, required to be registered pursuant to this Act.

9 The terms "clearing agency" and "depository" shall not 10 include (1) Federal Reserve Banks, Federal Home Loan 11 Banks, Federal Land Banks, or any person controlled or 12 supervised by and acting as an instrumentality of the Gov13 ernment of the United States pursuant to authority granted 14 by the Congress of the United States, and (2) banks, brok15 ers, building and loan, savings and loan, and homestead asso16 ciations and cooperative banks by reason of lending, fiduciary, 17 correspondent, or safekeeping functions commonly per18 formed by them.

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SEC. 4. (a) No person shall make use of the mails 20 or of any means or instrumentality of interstate commerce, 21 directly or indirectly, in order to perform the function of 22 a depository or clearing agency with respect to any security 23 (other than an exempted security) or the function of a 24 transfer agent, unless such person is registered in accordance 25 with this section 4.

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(b) The Commission may by such rules and regulations 2 or orders as it deems necessary or appropriate in the public 3 interest or for the protection of investors, either uncondi4 tionally or upon specified terms and conditions or for 5 stated periods, exempt from subsection 4 (a) or from any rule 6 or regulation under this section 4 any person, security, or 7 transaction or any class or classes of persons, securities, or 8 transactions.

9 (c) (1) Any depository or clearing agency may be 10 registered for the purposes of this section by filing with the 11 Commission a registration statement which shall contain the 12 information and be accompanied by the documents, below 13 specified:

(i) Such data as the Commission may by rules and regulations require as to performance capability, measures and personnel standards for safe handling and custody of securities and funds, operational compatibility of the depository or clearing agency with other

persons involved in the securities handling process, and

access to the services provided by such depository or clearing agency; and

(ii) Copies of its charter, bylaws, or rules, and instruments corresponding thereto and manuals and forms relating to operations and custody of securities and funds.

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1 Except as hereinafter provided, registration under this 2 subsection (c) (1) shall become effective sixty days after 3 receipt of the registration statement by the Commission or 4 within such shorter period of time as the Commission may 5 determine.

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(2) Any transfer agent may be registered for the pur7 poses of this section 4 by filing with the appropriate regu8 latory agency a registration statement which shall state the 9 address of its principal office or offices for transfer agent 10 activities, the length of time it has been acting as a transfer 11 agent, and the identity of the issuers and issues of securi12 ties for which it is then acting as transfer agent, and shall 13 contain such other information in such detail as the appro14 priate regulatory agency may require as necessary or ap15 propriate with regard to performance of transfer functions, 16 measures, and personnel standards for safe handling and 17 custody of securities and funds, and operational compatibil18 ity of the transfer agent with other persons involved in the 19 securities handling process. Any transfer agent required to 20 register hereunder with a regulatory agency other than the 21 Commission shall file with the Commission a notice which 22 shall state its name, the address of its principal office or offices 23 for transfer agent activity, the identity of the issuers and 24 issues of securities for which it is then acting as transfer