---
kind: "section"
citation: "15 U.S.C. § 78o–3"
title: "15"
title_heading: "Commerce and Trade"
number: "78o–3"
heading: "Registered securities associations"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78o-3"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78o–3. Registered securities associations

- (a) **Registration; application—** An association of [brokers](/usc/15/78c.md?p=a-4-A) and [dealers](/usc/15/78c.md?p=a-5-A) may be registered as a national [securities](/usc/15/78c.md?p=a-10) association pursuant to [subsection (b)](#b), or as an affiliated [securities](/usc/15/78c.md?p=a-10) association pursuant to [subsection (d)](#d), under the terms and conditions hereinafter provided in this section and in accordance with the provisions of [section 78s(a) of this title](/usc/15/78s.md?p=a), by filing with the [Commission](/usc/15/78c.md?p=a-15) an application for registration in such form as the [Commission](/usc/15/78c.md?p=a-15), by rule, may prescribe containing the rules of the association and such other information and documents as the [Commission](/usc/15/78c.md?p=a-15), by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors.
- (b) **Determinations by Commission requisite to registration of applicant as national securities association—** An association of [brokers](/usc/15/78c.md?p=a-4-A) and [dealers](/usc/15/78c.md?p=a-5-A) shall not be registered as a national [securities](/usc/15/78c.md?p=a-10) association unless the [Commission](/usc/15/78c.md?p=a-15) determines that—
  - (1) By reason of the number and geographical distribution of its [members](/usc/15/78c.md?p=a-3-A) and the scope of their transactions, such association will be able to carry out the purposes of this section.
  - (2) Such association is so organized and has the capacity to be able to carry out the purposes of this chapter and to comply, and (subject to any rule or order of the [Commission](/usc/15/78c.md?p=a-15) pursuant to section [78q(d)](/usc/15/78q.md?p=d) or [78s(g)(2)](/usc/15/78s.md?p=g-2) of this title) to enforce compliance by its [members](/usc/15/78c.md?p=a-3-A) and [persons](/usc/15/78c.md?p=a-9) associated with its [members](/usc/15/78c.md?p=a-3-A), with the provisions of this chapter, the rules and regulations thereunder, the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73), and the rules of the association.
  - (3) Subject to the provisions of [subsection (g)](#g) of this section, the rules of the association provide that any [registered broker or dealer](/usc/15/78c.md?p=a-48) may become a [member](/usc/15/78c.md?p=a-3-A) of such association and any [person](/usc/15/78c.md?p=a-9) may become associated with a [member](/usc/15/78c.md?p=a-3-A) thereof.
  - (4) The rules of the association assure a fair representation of its [members](/usc/15/78c.md?p=a-3-A) in the selection of its [directors](/usc/15/78c.md?p=a-7) and [administration](/usc/15/636e.md?p=1) of its affairs and provide that one or more [directors](/usc/15/78c.md?p=a-7) shall be representative of [issuers](/usc/15/78c.md?p=a-8) and investors and not be associated with a [member](/usc/15/78c.md?p=a-3-A) of the association, [broker](/usc/15/78c.md?p=a-4-A), or [dealer](/usc/15/78c.md?p=a-5-A).
  - (5) The rules of the association provide for the equitable allocation of reasonable dues, fees, and other charges among [members](/usc/15/78c.md?p=a-3-A) and [issuers](/usc/15/78c.md?p=a-8) and other [persons](/usc/15/78c.md?p=a-9) using any [facility](/usc/15/78c.md?p=a-2) or system which the association operates or controls.
  - (6) The rules of the association are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with [persons](/usc/15/78c.md?p=a-9) engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in [securities](/usc/15/78c.md?p=a-10), to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and are not designed to permit unfair discrimination between customers, [issuers](/usc/15/78c.md?p=a-8), [brokers](/usc/15/78c.md?p=a-4-A), or [dealers](/usc/15/78c.md?p=a-5-A), to fix minimum profits, to impose any schedule or fix rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees to be charged by its [members](/usc/15/78c.md?p=a-3-A), or to regulate by virtue of any authority conferred by this chapter matters not related to the purposes of this chapter or the [administration](/usc/15/636e.md?p=1) of the association.
  - (7) The rules of the association provide that (subject to any rule or order of the [Commission](/usc/15/78c.md?p=a-15) pursuant to section [78q(d)](/usc/15/78q.md?p=d) or [78s(g)(2)](/usc/15/78s.md?p=g-2) of this title) its [members](/usc/15/78c.md?p=a-3-A) and [persons](/usc/15/78c.md?p=a-9) associated with its [members](/usc/15/78c.md?p=a-3-A) shall be appropriately disciplined for violation of any provision of this chapter, the rules or regulations thereunder, the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73), or the rules of the association, by expulsion, suspension, limitation of activities, functions, and operations, fine, censure, being suspended or barred from being associated with a [member](/usc/15/78c.md?p=a-3-A), or any other fitting sanction.
  - (8) The rules of the association are in accordance with the provisions of [subsection (h)](#h) of this section, and, in general, provide a fair procedure for the disciplining of [members](/usc/15/78c.md?p=a-3-A) and [persons](/usc/15/78c.md?p=a-9) associated with [members](/usc/15/78c.md?p=a-3-A), the denial of membership to any [person](/usc/15/78c.md?p=a-9) seeking membership therein, the barring of any [person](/usc/15/78c.md?p=a-9) from becoming associated with a [member](/usc/15/78c.md?p=a-3-A) thereof, and the prohibition or limitation by the association of any [person](/usc/15/78c.md?p=a-9) with respect to access to services offered by the association or a [member](/usc/15/78c.md?p=a-3-A) thereof.
  - (9) The rules of the association do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of this chapter.
  - (10) The requirements of [subsection (c)](#c), insofar as these may be applicable, are satisfied.
  - (11) The rules of the association include provisions governing the form and content of quotations relating to [securities](/usc/15/78c.md?p=a-10) sold otherwise than on a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) which may be distributed or published by any [member](/usc/15/78c.md?p=a-3-A) or [person associated with a member](/usc/15/78c.md?p=a-21), and the [persons](/usc/15/78c.md?p=a-9) to whom such quotations may be supplied. Such rules relating to quotations shall be designed to produce fair and informative quotations, to prevent fictitious or misleading quotations, and to promote orderly procedures for collecting, distributing, and publishing quotations.
  - (12) The rules of the association to promote just and equitable principles of trade, as required by [paragraph (6)](#b-6), include rules to prevent [members](/usc/15/78c.md?p=a-3-A) of the association from participating in any limited partnership rollup transaction (as such term is defined in paragraphs (4) and (5) of [section 78n(h) of this title](/usc/15/78n.md?p=h)) unless such transaction was conducted in accordance with procedures designed to protect the rights of limited partners, including—
    - (A) the right of dissenting limited partners to one of the following:
      - (i) an appraisal and compensation;
      - (ii) retention of a [security](/usc/15/78c.md?p=a-10) under substantially the same terms and conditions as the original issue;
      - (iii) approval of the limited partnership rollup transaction by not less than 75 percent of the outstanding [securities](/usc/15/78c.md?p=a-10) of each of the participating limited partnerships;
      - (iv) the use of a committee that is independent, as determined in accordance with rules prescribed by the association, of the general partner or sponsor, that has been approved by a majority of the outstanding [securities](/usc/15/78c.md?p=a-10) of each of the participating partnerships, and that has such authority as is necessary to protect the interest of limited partners, including the authority to hire independent advisors, to negotiate with the general partner or sponsor on behalf of the limited partners, and to make a recommendation to the limited partners with respect to the proposed transaction; or
      - (v) other comparable rights that are prescribed by rule by the association and that are designed to protect dissenting limited partners;
    - (B) the right not to have their voting power unfairly reduced or abridged;
    - (C) the right not to bear an unfair portion of the costs of a proposed limited partnership rollup transaction that is rejected; and
    - (D) restrictions on the conversion of contingent interests or fees into non-contingent interests or fees and restrictions on the receipt of a non-contingent equity interest in [exchange](/usc/15/78c.md?p=a-1) for fees for services which have not yet been provided.

    As used in this paragraph, the term “dissenting limited partner” means a [person](/usc/15/78c.md?p=a-9) who, on the date on which soliciting material is mailed to investors, is a holder of a beneficial interest in a limited partnership that is the subject of a limited partnership rollup transaction, and who casts a vote against the transaction and complies with procedures established by the association, except that for purposes of an [exchange](/usc/15/78c.md?p=a-1) or tender offer, such [person](/usc/15/78c.md?p=a-9) shall file an objection in writing under the rules of the association during the period in which the offer is outstanding.

  - (13) The rules of the association prohibit the authorization for quotation on an automated interdealer quotation system sponsored by the association of any [security](/usc/15/78c.md?p=a-10) designated by the [Commission](/usc/15/78c.md?p=a-15) as a national market system [security](/usc/15/78c.md?p=a-10) resulting from a limited partnership rollup transaction (as such term is defined in paragraphs (4) and (5) of [section 78n(h) of this title](/usc/15/78n.md?p=h)), unless such transaction was conducted in accordance with procedures designed to protect the rights of limited partners, including—
    - (A) the right of dissenting limited partners to one of the following:
      - (i) an appraisal and compensation;
      - (ii) retention of a [security](/usc/15/78c.md?p=a-10) under substantially the same terms and conditions as the original issue;
      - (iii) approval of the limited partnership rollup transaction by not less than 75 percent of the outstanding [securities](/usc/15/78c.md?p=a-10) of each of the participating limited partnerships;
      - (iv) the use of a committee that is independent, as determined in accordance with rules prescribed by the association, of the general partner or sponsor, that has been approved by a majority of the outstanding [securities](/usc/15/78c.md?p=a-10) of each of the participating partnerships, and that has such authority as is necessary to protect the interest of limited partners, including the authority to hire independent advisors, to negotiate with the general partner or sponsor on behalf of the limited partners, and to make a recommendation to the limited partners with respect to the proposed transaction; or
      - (v) other comparable rights that are prescribed by rule by the association and that are designed to protect dissenting limited partners;
    - (B) the right not to have their voting power unfairly reduced or abridged;
    - (C) the right not to bear an unfair portion of the costs of a proposed limited partnership rollup transaction that is rejected; and
    - (D) restrictions on the conversion of contingent interests or fees into non-contingent interests or fees and restrictions on the receipt of a non-contingent equity interest in [exchange](/usc/15/78c.md?p=a-1) for fees for services which have not yet been provided.

    As used in this paragraph, the term “dissenting limited partner” means a [person](/usc/15/78c.md?p=a-9) who, on the date on which soliciting material is mailed to investors, is a holder of a beneficial interest in a limited partnership that is the subject of a limited partnership rollup transaction, and who casts a vote against the transaction and complies with procedures established by the association, except that for purposes of an [exchange](/usc/15/78c.md?p=a-1) or tender offer, such [person](/usc/15/78c.md?p=a-9) shall file an objection in writing under the rules of the association during the period during which the offer is outstanding.

  - (14) The rules of the association include provisions governing the sales, or offers of sales, of [securities](/usc/15/78c.md?p=a-10) on the premises of any military installation to any [member](/usc/15/78c.md?p=a-3-A) of the Armed Forces or a dependent thereof, which rules require—
    - (A) the [broker or dealer](/usc/15/78c.md?p=h-2) performing brokerage services to clearly and conspicuously disclose to potential investors—
      - (i) that the [securities](/usc/15/78c.md?p=a-10) offered are not being offered or provided by the [broker or dealer](/usc/15/78c.md?p=h-2) on behalf of the Federal Government, and that its offer is not sanctioned, recommended, or encouraged by the Federal Government; and
      - (ii) the identity of the registered [broker](/usc/15/78c.md?p=a-4-A)-[dealer](/usc/15/78c.md?p=a-5-A) offering the [securities](/usc/15/78c.md?p=a-10);
    - (B) such [broker or dealer](/usc/15/78c.md?p=h-2) to perform an appropriate suitability determination, including consideration of costs and knowledge about [securities](/usc/15/78c.md?p=a-10), prior to making a recommendation of a [security](/usc/15/78c.md?p=a-10) to a [member](/usc/15/78c.md?p=a-3-A) of the Armed Forces or a dependent thereof; and
    - (C) that no [person](/usc/15/78c.md?p=a-9) receive any referral fee or incentive compensation in connection with a sale or offer of sale of [securities](/usc/15/78c.md?p=a-10), unless such [person](/usc/15/78c.md?p=a-9) is an associated [person](/usc/15/78c.md?p=a-9) of a [registered broker or dealer](/usc/15/78c.md?p=a-48) and is qualified pursuant to the [rules of a self-regulatory organization](/usc/15/78c.md?p=a-28).
  - (15) The rules of the association provide that the association shall—
    - (A) request guidance from the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) in interpretation of the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73); and
    - (B) provide information to the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) about the enforcement actions and examinations of the association under [section 78o–4(b)(2)(E)](/usc/15/78o–4.md?p=b-2-E) of this title, so that the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) may—
      - (i) assist in such enforcement actions and examinations; and
      - (ii) evaluate the ongoing effectiveness of the rules of the [Board](/usc/15/78c.md?p=a-73).
- (c) **National association rules; provision for registration of affiliated securities association—** The [Commission](/usc/15/78c.md?p=a-15) may permit or require the [rules of an association](/usc/15/78c.md?p=a-27) applying for registration pursuant to [subsection (b)](#b), to provide for the admission of an association registered as an affiliated [securities](/usc/15/78c.md?p=a-10) association pursuant to [subsection (d)](#d), to participation in said [applicant](/usc/15/7a.md?p=3) association as an affiliate thereof, under terms permitting such powers and responsibilities to such affiliate, and under such other appropriate terms and conditions, as may be provided by the rules of said [applicant](/usc/15/7a.md?p=3) association, if such rules appear to the [Commission](/usc/15/78c.md?p=a-15) to be necessary or appropriate in the public interest or for the protection of investors and to carry out the purposes of this section. The duties and powers of the [Commission](/usc/15/78c.md?p=a-15) with respect to any national [securities](/usc/15/78c.md?p=a-10) association or any affiliated [securities](/usc/15/78c.md?p=a-10) association shall in no way be limited by reason of any such affiliation.
- (d) **Registration as affiliated association; prerequisites; association rules—** An [applicant](/usc/15/7a.md?p=3) association shall not be registered as an affiliated [securities](/usc/15/78c.md?p=a-10) association unless it appears to the [Commission](/usc/15/78c.md?p=a-15) that—
  - (1) such association, notwithstanding that it does not satisfy the requirements set forth in [paragraph (1)](#b-1) of subsection (b), will, forthwith upon the registration thereof, be admitted to affiliation with an association registered as a national [securities](/usc/15/78c.md?p=a-10) association pursuant to [subsection (b)](#b), in the manner and under the terms and conditions provided by the rules of said national [securities](/usc/15/78c.md?p=a-10) association in accordance with [subsection (c)](#c); and
  - (2) such association and its rules satisfy the requirements set forth in paragraphs [(2)](#d-2) to (10), inclusive, and paragraph (12),[^1] of [subsection (b)](#b); except that in the case of any such association any restrictions upon membership therein of the type authorized by [paragraph (3)](#b-3) of subsection (b) shall not be less stringent than in the case of the national [securities](/usc/15/78c.md?p=a-10) association with which such association is to be affiliated.
- (e) **Dealings with nonmember professionals—**
  - (1) The rules of a registered [securities](/usc/15/78c.md?p=a-10) association may provide that no [member](/usc/15/78c.md?p=a-3-A) thereof shall deal with any nonmember professional (as defined in paragraph (2) of this subsection) except at the same prices, for the same [commissions](/usc/15/78c.md?p=a-15) or fees, and on the same terms and conditions as are by such [member](/usc/15/78c.md?p=a-3-A) accorded to the general public.
  - (2) For the purposes of this subsection, the term “nonmember professional” shall include (A) with respect to transactions in [securities](/usc/15/78c.md?p=a-10) other than [municipal securities](/usc/15/78c.md?p=a-29), any [registered broker or dealer](/usc/15/78c.md?p=a-48) who is not a [member](/usc/15/78c.md?p=a-3-A) of any registered [securities](/usc/15/78c.md?p=a-10) association, except such a [broker or dealer](/usc/15/78c.md?p=h-2) who deals exclusively in commercial paper, bankers’ acceptances, and commercial bills, and (B) with respect to transactions in [municipal securities](/usc/15/78c.md?p=a-29), any [municipal securities dealer](/usc/15/78c.md?p=a-30) (other than a [bank](/usc/15/78c.md?p=a-6) or division or department of a [bank](/usc/15/78c.md?p=a-6)) who is not a [member](/usc/15/78c.md?p=a-3-A) of any registered [securities](/usc/15/78c.md?p=a-10) association and any [municipal securities broker](/usc/15/78c.md?p=a-31) who is not a [member](/usc/15/78c.md?p=a-3-A) of any such association.
  - (3) Nothing in this subsection shall be so construed or applied as to prevent (A) any [member](/usc/15/78c.md?p=a-3-A) of a registered [securities](/usc/15/78c.md?p=a-10) association from granting to any other [member](/usc/15/78c.md?p=a-3-A) of any registered [securities](/usc/15/78c.md?p=a-10) association any [dealer](/usc/15/78c.md?p=a-5-A)’s discount, allowance, [commission](/usc/15/78c.md?p=a-15), or special terms, in connection with the [purchase](/usc/15/78c.md?p=a-13) or sale of [securities](/usc/15/78c.md?p=a-10), or (B) any [member](/usc/15/78c.md?p=a-3-A) of a registered [securities](/usc/15/78c.md?p=a-10) association or any [municipal securities dealer](/usc/15/78c.md?p=a-30) which is a [bank](/usc/15/78c.md?p=a-6) or a division or department of a [bank](/usc/15/78c.md?p=a-6) from granting to any [member](/usc/15/78c.md?p=a-3-A) of any registered [securities](/usc/15/78c.md?p=a-10) association or any such [municipal securities dealer](/usc/15/78c.md?p=a-30) any [dealer](/usc/15/78c.md?p=a-5-A)’s discount, allowance, [commission](/usc/15/78c.md?p=a-15), or special terms in connection with the [purchase](/usc/15/78c.md?p=a-13) or sale of [municipal securities](/usc/15/78c.md?p=a-29): Provided, however, That the granting of any such discount, allowance, [commission](/usc/15/78c.md?p=a-15), or special terms in connection with the [purchase](/usc/15/78c.md?p=a-13) or sale of [municipal securities](/usc/15/78c.md?p=a-29) shall be subject to rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) adopted pursuant to [section 78o–4(b)(2)(K)](/usc/15/78o–4.md?p=b-2-K) of this title.
- (f) **Transactions in municipal securities—** Nothing in subsection [(b)(6)](#b-6) or [(b)(11)](#b-11) of this section shall be construed to permit a registered [securities](/usc/15/78c.md?p=a-10) association to make rules concerning any transaction by a [registered broker or dealer](/usc/15/78c.md?p=a-48) in a municipal [security](/usc/15/78c.md?p=a-10).
- (g) **Denial of membership—**
  - (1) A registered [securities](/usc/15/78c.md?p=a-10) association shall deny membership to any [person](/usc/15/78c.md?p=a-9) who is not a [registered broker or dealer](/usc/15/78c.md?p=a-48).
  - (2) A registered [securities](/usc/15/78c.md?p=a-10) association may, and in cases in which the [Commission](/usc/15/78c.md?p=a-15), 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](/usc/15/78c.md?p=a-48), and bar from becoming associated with a [member](/usc/15/78c.md?p=a-3-A) any [person](/usc/15/78c.md?p=a-9), who is subject to a statutory disqualification. A registered [securities](/usc/15/78c.md?p=a-10) association shall file notice with the [Commission](/usc/15/78c.md?p=a-15) not less than thirty days prior to admitting any [registered broker or dealer](/usc/15/78c.md?p=a-48) to membership or permitting any [person](/usc/15/78c.md?p=a-9) to become associated with a [member](/usc/15/78c.md?p=a-3-A), if the association knew, or in the exercise of reasonable care should have known, that such [broker or dealer](/usc/15/78c.md?p=h-2) or [person](/usc/15/78c.md?p=a-9) was subject to a statutory disqualification. The notice shall be in such form and contain such information as the [Commission](/usc/15/78c.md?p=a-15), by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors.
  - (3)
    - (A) A registered [securities](/usc/15/78c.md?p=a-10) association may deny membership to, or condition the membership of, a [registered broker or dealer](/usc/15/78c.md?p=a-48) if (i) such [broker or dealer](/usc/15/78c.md?p=h-2) does not meet such standards of financial responsibility or operational capability or such [broker or dealer](/usc/15/78c.md?p=h-2) or any natural [person associated with](/usc/15/78c.md?p=a-63) such [broker or dealer](/usc/15/78c.md?p=h-2) 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](/usc/15/78c.md?p=h-2) or [person associated with](/usc/15/78c.md?p=a-63) such [broker or dealer](/usc/15/78c.md?p=h-2) 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](/usc/15/78c.md?p=a-10) association may examine and verify the qualifications of an [applicant](/usc/15/7a.md?p=3) to become a [member](/usc/15/78c.md?p=a-3-A) and the [natural persons](/usc/15/15g.md?p=3) associated with such an [applicant](/usc/15/7a.md?p=3) in accordance with procedures established by the rules of the association.
    - (B) A registered [securities](/usc/15/78c.md?p=a-10) association may bar a natural [person](/usc/15/78c.md?p=a-9) from becoming associated with a [member](/usc/15/78c.md?p=a-3-A) or condition the association of a natural [person](/usc/15/78c.md?p=a-9) with a [member](/usc/15/78c.md?p=a-3-A) if such natural [person](/usc/15/78c.md?p=a-9) (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](/usc/15/78c.md?p=a-10) association may examine and verify the qualifications of an [applicant](/usc/15/7a.md?p=3) to become a [person associated with a member](/usc/15/78c.md?p=a-21) in accordance with procedures established by the rules of the association and require a natural [person associated with a member](/usc/15/78c.md?p=a-21), or any class of such [natural persons](/usc/15/15g.md?p=3), to be registered with the association in accordance with procedures so established.
    - (C) A registered [securities](/usc/15/78c.md?p=a-10) association may bar any [person](/usc/15/78c.md?p=a-9) from becoming associated with a [member](/usc/15/78c.md?p=a-3-A) if such [person](/usc/15/78c.md?p=a-9) does not agree (i) to supply the association with such information with respect to its relationship and dealings with the [member](/usc/15/78c.md?p=a-3-A) as may be specified in the rules of the association and (ii) to permit examination of its books and [records](/usc/15/78c.md?p=a-37) to verify the accuracy of any information so supplied.
    - (D) Nothing in subparagraph (A), (B), or (C) of this paragraph shall be construed to permit a registered [securities](/usc/15/78c.md?p=a-10) association to deny membership to or condition the membership of, or bar any [person](/usc/15/78c.md?p=a-9) from becoming associated with or condition the association of any [person](/usc/15/78c.md?p=a-9) with, a [broker or dealer](/usc/15/78c.md?p=h-2) that engages exclusively in transactions in [municipal securities](/usc/15/78c.md?p=a-29).
  - (4) A registered [securities](/usc/15/78c.md?p=a-10) association may deny membership to a [registered broker or dealer](/usc/15/78c.md?p=a-48) not engaged in a type of business in which the rules of the association require [members](/usc/15/78c.md?p=a-3-A) to be engaged: Provided, however, That no registered [securities](/usc/15/78c.md?p=a-10) association may deny membership to a [registered broker or dealer](/usc/15/78c.md?p=a-48) by reason of the amount of such type of business done by such [broker or dealer](/usc/15/78c.md?p=h-2) or the other types of business in which he is engaged.
- (h) **Discipline of registered securities association members and persons associated with members; summary proceedings—**
  - (1) In any proceeding by a registered [securities](/usc/15/78c.md?p=a-10) association to determine whether a [member](/usc/15/78c.md?p=a-3-A) or [person associated with a member](/usc/15/78c.md?p=a-21) should be disciplined (other than a summary proceeding pursuant to paragraph (3) of this subsection) the association shall bring specific charges, notify such [member](/usc/15/78c.md?p=a-3-A) or [person](/usc/15/78c.md?p=a-9) of, and give him an opportunity to defend against, such charges, and keep a record. A determination by the association to impose a disciplinary sanction shall be supported by a statement setting forth—
    - (A) any act or practice in which such [member](/usc/15/78c.md?p=a-3-A) or [person associated with a member](/usc/15/78c.md?p=a-21) has been found to have engaged, or which such [member](/usc/15/78c.md?p=a-3-A) or [person](/usc/15/78c.md?p=a-9) has been found to have omitted;
    - (B) the specific provision of this chapter, the rules or regulations thereunder, the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73), or the rules of the association which any such act or practice, or omission to act, is deemed to violate; and
    - (C) the sanction imposed and the reason therefor.
  - (2) In any proceeding by a registered [securities](/usc/15/78c.md?p=a-10) association to determine whether a [person](/usc/15/78c.md?p=a-9) shall be denied membership, barred from becoming associated with a [member](/usc/15/78c.md?p=a-3-A), or prohibited or limited with respect to access to services offered by the association or a [member](/usc/15/78c.md?p=a-3-A) thereof (other than a summary proceeding pursuant to paragraph (3) of this subsection), the association shall notify such [person](/usc/15/78c.md?p=a-9) of and give him an opportunity to be heard upon, the specific grounds for denial, bar, or prohibition or limitation under consideration and keep a record. A determination by the association to deny membership, bar a [person](/usc/15/78c.md?p=a-9) from becoming associated with a [member](/usc/15/78c.md?p=a-3-A), or prohibit or limit a [person](/usc/15/78c.md?p=a-9) with respect to access to services offered by the association or a [member](/usc/15/78c.md?p=a-3-A) thereof shall be supported by a statement setting forth the specific grounds on which the denial, bar, or prohibition or limitation is based.
  - (3) A registered [securities](/usc/15/78c.md?p=a-10) association may summarily (A) suspend a [member](/usc/15/78c.md?p=a-3-A) or [person associated with a member](/usc/15/78c.md?p=a-21) who has been and is expelled or suspended from any [self-regulatory organization](/usc/15/78c.md?p=a-26) or barred or suspended from being associated with a [member](/usc/15/78c.md?p=a-3-A) of any [self-regulatory organization](/usc/15/78c.md?p=a-26), (B) suspend a [member](/usc/15/78c.md?p=a-3-A) who is in such financial or operating difficulty that the association determines and so notifies the [Commission](/usc/15/78c.md?p=a-15) that the [member](/usc/15/78c.md?p=a-3-A) cannot be permitted to continue to do business as a [member](/usc/15/78c.md?p=a-3-A) with safety to investors, creditors, other [members](/usc/15/78c.md?p=a-3-A), or the association, or (C) limit or prohibit any [person](/usc/15/78c.md?p=a-9) with respect to access to services offered by the association if subparagraph (A) or (B) of this paragraph is applicable to such [person](/usc/15/78c.md?p=a-9) or, in the case of a [person](/usc/15/78c.md?p=a-9) who is not a [member](/usc/15/78c.md?p=a-3-A), if the association determines that such [person](/usc/15/78c.md?p=a-9) does not meet the qualification requirements or other prerequisites for such access and such [person](/usc/15/78c.md?p=a-9) cannot be permitted to continue to have such access with safety to investors, creditors, [members](/usc/15/78c.md?p=a-3-A), or the association. Any [person](/usc/15/78c.md?p=a-9) aggrieved by any such summary action shall be promptly afforded an opportunity for a hearing by the association in accordance with the provisions of paragraph (1) or (2) of this subsection. The [Commission](/usc/15/78c.md?p=a-15), by order, may stay any such summary action on its own motion or upon application by any [person](/usc/15/78c.md?p=a-9) aggrieved thereby, if the [Commission](/usc/15/78c.md?p=a-15) determines summarily or after notice and opportunity for hearing (which hearing may consist solely of the submission of affidavits or presentation of oral arguments) that such stay is consistent with the public interest and the protection of investors.
- (i) **Obligation to maintain registration, disciplinary, and other data—**
  - (1) **Maintenance of system to respond to inquiries—** A registered [securities](/usc/15/78c.md?p=a-10) association shall—
    - (A) establish and maintain a system for collecting and retaining registration information;
    - (B) establish and maintain a toll-free telephone listing, and a readily accessible electronic or other process, to receive and promptly respond to inquiries regarding—
      - (i) registration information on its [members](/usc/15/78c.md?p=a-3-A) and their associated [persons](/usc/15/78c.md?p=a-9); and
      - (ii) registration information on the [members](/usc/15/78c.md?p=a-3-A) and their associated [persons](/usc/15/78c.md?p=a-9) of any registered national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) that uses the system described in [subparagraph (A)](#i-1-A) for the registration of its [members](/usc/15/78c.md?p=a-3-A) and their associated [persons](/usc/15/78c.md?p=a-9); and
    - (C) adopt rules governing the process for making inquiries and the type, scope, and presentation of information to be provided in response to such inquiries in consultation with any registered national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) providing information pursuant to [subparagraph (B)(ii)](#i-1-B-ii).
  - (2) **Recovery of costs—** A registered [securities](/usc/15/78c.md?p=a-10) association may charge [persons](/usc/15/78c.md?p=a-9) making inquiries described in [paragraph (1)(B)](#i-1-B), other than individual investors, reasonable fees for responses to such inquiries.
  - (3) **Process for disputed information—** Each registered [securities](/usc/15/78c.md?p=a-10) association shall adopt rules establishing an administrative process for disputing the accuracy of information provided in response to inquiries under this subsection in consultation with any registered national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) providing information pursuant to [paragraph (1)(B)(ii)](#i-1-B-ii).
  - (4) **Limitation on liability—** A registered [securities](/usc/15/78c.md?p=a-10) association, or an [exchange](/usc/15/78c.md?p=a-1) reporting information to such an association, shall not have any liability to any [person](/usc/15/78c.md?p=a-9) for any actions taken or omitted in good faith under this subsection.
  - (5) **Definition—** For purposes of this subsection, the term “registration information” means the information reported in connection with the registration or licensing of [brokers](/usc/15/78c.md?p=a-4-A) and [dealers](/usc/15/78c.md?p=a-5-A) and their associated [persons](/usc/15/78c.md?p=a-9), including disciplinary actions, regulatory, judicial, and arbitration proceedings, and other information required by law, or [exchange](/usc/15/78c.md?p=a-1) or association rule, and the source and status of such information.
- (j) **Registration for sales of private securities offerings—** A registered [securities](/usc/15/78c.md?p=a-10) association shall create a limited qualification category for any [associated person of a member](/usc/15/78c.md?p=a-21) who effects sales as part of a primary offering of [securities](/usc/15/78c.md?p=a-10) not involving a public offering, pursuant to section 77c(b), 77d(2),[^1] or 77d(6)[^1] of this title and the rules and regulations thereunder, and shall deem qualified in such limited qualification category, without testing, any [bank](/usc/15/78c.md?p=a-6) employee who, in the six month period preceding November 12, 1999, engaged in effecting such sales.
- (k) **Limited purpose national securities association—**
  - (1) **Regulation of members with respect to security futures products—** A futures association registered under [section 21 of title 7](/usc/7/21.md) shall be a registered national [securities](/usc/15/78c.md?p=a-10) association for the limited purpose of regulating the activities of [members](/usc/15/78c.md?p=a-3-A) who are registered as [brokers](/usc/15/78c.md?p=a-4-A) or [dealers](/usc/15/78c.md?p=a-5-A) in [security futures products](/usc/15/78c.md?p=a-56) pursuant to [section 78o(b)(11)](/usc/15/78o.md?p=b-11) of this title.
  - (2) **Requirements for registration—** Such a [securities](/usc/15/78c.md?p=a-10) association shall—
    - (A) be so organized and have the capacity to carry out the purposes of the [securities laws](/usc/15/78c.md?p=a-47) applicable to [security futures products](/usc/15/78c.md?p=a-56) and to comply, and (subject to any rule or order of the [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 78s(g)(2) of this title](/usc/15/78s.md?p=g-2)) to enforce compliance by its [members](/usc/15/78c.md?p=a-3-A) and [persons](/usc/15/78c.md?p=a-9) associated with its [members](/usc/15/78c.md?p=a-3-A), with the provisions of the [securities laws](/usc/15/78c.md?p=a-47) applicable to [security futures products](/usc/15/78c.md?p=a-56), the rules and regulations thereunder, and its rules;
    - (B) have rules that—
      - (i) are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest, including rules governing sales practices and the advertising of [security futures products](/usc/15/78c.md?p=a-56) reasonably comparable to those of other national [securities](/usc/15/78c.md?p=a-10) associations registered pursuant to [subsection (a)](#a) that are applicable to [security futures products](/usc/15/78c.md?p=a-56); and
      - (ii) are not designed to regulate by virtue of any authority conferred by this chapter matters not related to the purposes of this chapter or the [administration](/usc/15/636e.md?p=1) of the association;
    - (C) have rules that provide that (subject to any rule or order of the [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 78s(g)(2) of this title](/usc/15/78s.md?p=g-2)) its [members](/usc/15/78c.md?p=a-3-A) and [persons](/usc/15/78c.md?p=a-9) associated with its [members](/usc/15/78c.md?p=a-3-A) shall be appropriately disciplined for violation of any provision of the [securities laws](/usc/15/78c.md?p=a-47) applicable to [security futures products](/usc/15/78c.md?p=a-56), the rules or regulations thereunder, or the rules of the association, by expulsion, suspension, limitation of activities, functions, and operations, fine, censure, being suspended or barred from being associated with a [member](/usc/15/78c.md?p=a-3-A), or any other fitting sanction; and
    - (D) have rules that ensure that [members](/usc/15/78c.md?p=a-3-A) and [natural persons](/usc/15/15g.md?p=3) associated with [members](/usc/15/78c.md?p=a-3-A) meet such standards of training, experience, and competence necessary to effect transactions in [security futures products](/usc/15/78c.md?p=a-56) and are tested for their knowledge of [securities](/usc/15/78c.md?p=a-10) and [security futures products](/usc/15/78c.md?p=a-56).
  - (3) **Exemption from rule change submission—** Such a [securities](/usc/15/78c.md?p=a-10) association shall be exempt from submitting proposed rule changes pursuant to [section 78s(b) of this title](/usc/15/78s.md?p=b), except that—
    - (A) the association shall file proposed rule changes related to [higher margin levels](/usc/15/78c.md?p=a-57-C), fraud or manipulation, recordkeeping, reporting, listing standards, or decimal pricing for [security futures products](/usc/15/78c.md?p=a-56), sales practices for, advertising of, or standards of training, experience, competence, or other qualifications for [security futures products](/usc/15/78c.md?p=a-56) for [persons](/usc/15/78c.md?p=a-9) who effect transactions in [security futures products](/usc/15/78c.md?p=a-56), or rules effectuating the association’s obligation to enforce the [securities laws](/usc/15/78c.md?p=a-47) pursuant to [section 78s(b)(7) of this title](/usc/15/78s.md?p=b-7);
    - (B) the association shall file pursuant to sections [78s(b)(1)](/usc/15/78s.md?p=b-1) and [78s(b)(2)](/usc/15/78s.md?p=b-2) of this title proposed rule changes related to [margin](/usc/15/78c.md?p=a-57-A), except for changes resulting in [higher margin levels](/usc/15/78c.md?p=a-57-C); and
    - (C) the association shall file pursuant to [section 78s(b)(1) of this title](/usc/15/78s.md?p=b-1) proposed rule changes that have been abrogated by the [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 78s(b)(7)(C) of this title](/usc/15/78s.md?p=b-7-C).
  - (4) **Other exemptions—** Such a [securities](/usc/15/78c.md?p=a-10) association shall be exempt from and shall not be required to enforce compliance by its [members](/usc/15/78c.md?p=a-3-A), and its [members](/usc/15/78c.md?p=a-3-A) shall not, solely with respect to their transactions effected in [security futures products](/usc/15/78c.md?p=a-56), be required to comply, with the following provisions of this chapter and the rules thereunder:
    - (A) [Section 78h of this title](/usc/15/78h.md).
    - (B) Subsections [(b)(1)](#b-1), [(b)(3)](#b-3), [(b)(4)](#b-4), [(b)(5)](#b-5), [(b)(8)](#b-8), [(b)(10)](#b-10), [(b)(11)](#b-11), [(b)(12)](#b-12), [(b)(13)](#b-13), [(c)](#c), [(d)](#d), [(e)](#e), [(f)](#f), [(g)](#g), [(h)](#h), and [(i)](#i) of this section.
    - (C) Subsections [(d)](#d), [(f)](#f), and [(k)](#k)[^1] of [section 78q of this title](/usc/15/78q.md).
    - (D) Subsections (a), (f), and (h) of [section 78s of this title](/usc/15/78s.md).
- (l) **Rules to avoid duplicative regulation of dual registrants—** Consistent with this chapter, each national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [subsection (a)](#a) of this section shall issue such rules as are necessary to avoid duplicative or conflicting rules applicable to any [broker or dealer](/usc/15/78c.md?p=h-2) registered with the [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 78o(b)](/usc/15/78o.md?p=b) of this title (except paragraph (11) thereof), that is also registered with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 6f(a) of title 7](/usc/7/6f.md?p=a) (except [paragraph (2)](#l-2) thereof), with respect to the application of—
  - (1) rules of such national [securities](/usc/15/78c.md?p=a-10) association of the type specified in [section 78o(c)(3)(B)](/usc/15/78o.md?p=c-3-B) of this title involving [security futures products](/usc/15/78c.md?p=a-56); and
  - (2) similar rules of national [securities](/usc/15/78c.md?p=a-10) associations registered pursuant to [subsection (k)](#k) of this section and national [securities](/usc/15/78c.md?p=a-10) [exchanges](/usc/15/78c.md?p=a-1) registered pursuant to [section 78f(g) of this title](/usc/15/78f.md?p=g) involving [security futures products](/usc/15/78c.md?p=a-56).
- (m) **Procedures and rules for security future products—** A national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [subsection (a)](#a) shall, not later than 8 months after December 21, 2000, implement the procedures specified in [section 78f(h)(5)(A) of this title](/usc/15/78f.md?p=h-5-A) and adopt the rules specified in subparagraphs (B) and (C) of [section 78f(h)(5) of this title](/usc/15/78f.md?p=h-5).
- (n) **Data standards—**
  - (1) **Requirement—** A national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [subsection (a)](#a) shall adopt data standards for all information that is regularly filed with or submitted to the association.
  - (2) **Consistency—** The data standards required under [paragraph (1)](#n-1) shall incorporate, and ensure compatibility with (to the extent feasible), all applicable data standards established in the rules promulgated under [section 5334 of title 12](/usc/12/5334.md), including, to the extent practicable, by having the characteristics described in clauses (i) through (vi) of subsection (c)(1)(B) of such section 5334.

## Footnotes

[^1]: See References in Text note below.

## Source credit

(June 6, 1934, ch. 404, title I, § 15A, as added June 25, 1938, ch. 677, § 1, 52 Stat. 1070; amended Pub. L. 88–467, § 7, Aug. 20, 1964, 78 Stat. 574; Pub. L. 94–29, § 12, June 4, 1975, 89 Stat. 127; Pub. L. 99–571, title I, § 102(g), Oct. 28, 1986, 100 Stat. 3218; Pub. L. 101–429, title V, § 509, Oct. 15, 1990, 104 Stat. 957; Pub. L. 103–202, title I, § 106(b)(1), title III, § 303(a), (c), Dec. 17, 1993, 107 Stat. 2350, 2364, 2366; Pub. L. 106–102, title II, § 203, Nov. 12, 1999, 113 Stat. 1391; Pub. L. 106–554, § 1(a)(5) [title II, §§ 203(c), 206(j), (k)(1)], Dec. 21, 2000, 114 Stat. 2763, 2763A–422, 2763A–433; Pub. L. 109–290, §§ 5, 6, Sept. 29, 2006, 120 Stat. 1319, 1320; Pub. L. 111–203, title IX, § 975(f), July 21, 2010, 124 Stat. 1923; Pub. L. 117–263, div. E, title LVIII, § 5824(a), Dec. 23, 2022, 136 Stat. 3428.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsecs. (b)(2), (6), (7), (9), (h)(1)(B), (k)(2)(B)(ii), (4), and (l), was in the original “this title”. See References in Text note set out under section 78a of this title.

Paragraph (12), of subsection (b) of this section, referred to in subsec. (d)(2), was omitted in the general amendment of subsec. (b) by Pub. L. 94–29, see par. (11) of subsec. (b). A new par. (12) was added by Pub. L. 103–302, § 303(a).

Sections 77d(2) and 77d(6) of this title, referred to in subsec. (j), were redesignated sections 77d(a)(2) and 77d(a)(6), respectively, of this title by Pub. L. 112–106, title II, § 201(b)(1), (c)(1), Apr. 5, 2012, 126 Stat. 314.

Subsection (k) of section 78q of this title, referred to in subsec. (k)(4)(C), was redesignated subsec. (j) by Pub. L. 111–203, title VI, § 617(a)(2), July 21, 2010, 124 Stat. 1616.

### Amendments

2022—Subsec. (n). Pub. L. 117–263 added subsec. (n).

2010—Subsec. (b)(15). Pub. L. 111–203 added par. (15).

2006—Subsec. (b)(14). Pub. L. 109–290, § 5, added par. (14).

Subsec. (i). Pub. L. 109–290, § 6, inserted heading and amended text of subsec. (i) generally. Prior to amendment, text read as follows: “A registered securities association shall, within one year from October 15, 1990, (1) establish and maintain a toll-free telephone listing to receive inquiries regarding disciplinary actions involving its members and their associated persons, and (2) promptly respond to such inquiries in writing. Such association may charge persons, other than individual investors, reasonable fees for written responses to such inquiries. Such an association shall not have any liability to any person for any actions taken or omitted in good faith under this paragraph.”

2000—Subsec. (k). Pub. L. 106–554, § 1(a)(5) [title II, § 203(c)], added subsec. (k).

Subsec. (l). Pub. L. 106–554, § 1(a)(5) [title II, § 206(j)], added subsec. (l).

Subsec. (m). Pub. L. 106–554, § 1(a)(5) [title II, § 206(k)(1)], added subsec. (m).

1999—Subsec. (j). Pub. L. 106–102 added subsec. (j).

1993—Subsec. (b)(12). Pub. L. 103–202, § 303(a), added par. (12).

Subsec. (b)(13). Pub. L. 103–202, § 303(c), added par. (13).

Subsec. (f). Pub. L. 103–202, § 106(b)(1)(A), redesignated par. (3) as entire subsec. (f) and struck out pars. (1) and (2) which read as follows:

“(1) Except as provided in paragraph (2) of this subsection, nothing in this section shall be construed to apply with respect to any transaction by a registered broker or dealer in any exempted security.

“(2) A registered securities association may adopt and implement rules applicable to members of such association (A) to enforce compliance by registered brokers and dealers with applicable provisions of this chapter and the rules and regulations thereunder, (B) to provide that its members and persons associated with its members shall be appropriately disciplined, in accordance with subsections (b)(7), (b)(8), and (h) of this section, for violation of applicable provisions of this chapter and the rules and regulations thereunder, (C) to provide for reasonable inspection and examination of the books and records of registered brokers and dealers, (D) to provide for the matters described in paragraphs (b)(3), (b)(4), and (b)(5) of this section, (E) to implement the provisions of subsection (g) of this section, and (F) to prohibit fraudulent, misleading, deceptive, and false advertising.”

Subsec. (g)(3)(D). Pub. L. 103–202, § 106(b)(1)(B)(i), substituted “transactions in municipal securities” for “transactions in exempted securities”.

Subsec. (g)(4), (5). Pub. L. 103–202, § 106(b)(1)(B)(ii), (iii), redesignated par. (5) as (4) and struck out former par. (4) which allowed a registered securities association to deny membership to, condition the membership of, or to otherwise bar association with, the association, under circumstances where a government securities broker or dealer or other person violated financial responsibility rules adopted under section 78o–5(b)(1)(A) of this title, or where it appeared likely that such person or entity had or would engage in conduct which would subject such person or entity to sanctions under section 78o–5(c) of this title.

1990—Subsec. (i). Pub. L. 101–429 added subsec. (i).

1986—Subsec. (f). Pub. L. 99–571, § 102(g)(1), amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: “Nothing in this section shall be construed to apply with respect to any transaction by a broker or dealer in any exempted security.”

Subsec. (g)(3)(D). Pub. L. 99–571, § 102(g)(2)(A), added subpar. (D).

Subsec. (g)(4), (5). Pub. L. 99–571, § 102(g)(2)(B), (C), added par. (4) and redesignated former par. (4) as (5).

1975—Subsec. (a). Pub. L. 94–29, § 12(2), struck out “with the Commission” after “registered”, inserted reference to section 78s(a) of this title, substituted provisions covering an application for registration in the form prescribed by Commission rule containing the rules of the association and such other information and documents as the Commission prescribes as necessary or appropriate in the public interest or for the protection of investors for provisions covering a statement in the form prescribed by the Commission setting forth specified information and accompanied by specified documents, and struck out provision that registration not be construed as a waiver of constitutional rights or as a waiver of the right to contest the validity of Commission rules or regulations.

Subsec. (b). Pub. L. 94–29, § 12(2), amended subsec. (b) generally, to conform its provisions concerning the registration and regulation of national and affiliated securities associations to those covering the registration and regulation of national securities exchanges contained in section 78f of this title and inserted provisions necessary to accommodate the creation of the Municipal Securities Rulemaking Board and to implement its purposes.

Subsec. (e). Pub. L. 94–29, § 12(3), redesignated subsec. (i) as (e) and in subsec. (e) as so redesignated substituted “nonmember professional” for “nonmember broker or dealer” in par. (1), substituted “term ‘nonmember professional’ shall include (A) with respect to transactions in securities other than municipal securities, any registered broker or dealer who is not a member of any registered securities association, except such a broker or dealer who deals exclusively in commercial paper, bankers’ acceptances, and commercial bills” for “term ‘nonmember broker or dealer’ shall include any broker or dealer who makes use of the mails or of any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security otherwise than on a national securities exchange, who is not a member of any registered securities association, except a broker or dealer who deals exclusively in commercial paper, bankers’ acceptances, or commercial bills” and added cl. (B) in par. (2), and, in par. (3), designated existing provisions as cl. (A) and added cl. (B). Former subsec. (e), covering the grant and denial of registration and the revocation of affiliated association registration, was struck out. See section 78s of this title.

Subsec. (f). Pub. L. 94–29, § 12(3), redesignated subsec. (m) as (f). Former subsec. (f), covering withdrawal from registration, was struck out. See section 78s of this title.

Subsec. (g). Pub. L. 94–29, § 12(3), (4), added subsec. (g). Former subsec. (g), covering review by the Commission of adverse actions against association members and stays of such actions, was struck out. See section 78s of this title.

Subsec. (h). Pub. L. 94–29, § 12(3), (4), added subsec. (h). Former subsec. (h), covering the Commission’s action upon findings, was struck out. See section 78s of this title.

Subsec. (i). Pub. L. 94–29, § 12(3), redesignated subsec. (i) as (e) and amended subsec. (e) as so redesignated.

Subsecs. (j) to (l). Pub. L. 94–29, § 12(3), struck out subsecs. (j) to (l) which covered the filing of changes or additions to association rules and current information, the abrogation and alteration of association rules and supplements to association rules, the suspension of an association or its members, the revocation of registration, the expulsion of members, and the removal of officers or directors. See section 78s of this title.

Subsec. (m). Pub. L. 94–29, § 12(3), redesignated subsec. (m) as (f).

Subsec. (n). Pub. L. 94–29, § 12(3), struck out subsec. (n) which directed that provisions of this section prevail in the event of any conflict between this section and any other law of the United States in force on June 25, 1938.

1964—Subsec. (b)(1), (2). Pub. L. 88–467, § 7(a)(1), substituted a period for the semicolon at end of pars. (1) and (2).

Subsec. (b)(3). Pub. L. 88–467, § 7(a)(1), (2), substituted a period for the semicolon at end of par. (3), struck out “of” before “any means”, substituted “paragraph (4) or (5) of this subsection, or a rule of the association permitted under this paragraph. The rules” for “paragraph (4) of this subsection: Provided, That the rules”, and inserted provision authorizing a registered securities association to adopt rules under which it might exclude from membership persons who had been suspended or expelled from a national securities exchange or who were barred or suspended from being associated with all brokers or dealers who are members of such an exchange for violation of exchange rules.

Subsec. (b)(4). Pub. L. 88–467, § 7(a)(1), (3), substituted a period for the semicolon at end of par. (4), deleted from text preceding cl. (A) the language “or (2) any partner, officer, director, or branch manager of such broker or dealer (or any person occupying a similar status or performing similar functions), or any person directly or indirectly controlling or controlled by such broker or dealer, whether prior or subsequent to becoming such”, inserted in cl. (A) “or has been and is barred or suspended from being associated with all brokers or dealers which are members of such exchange”, inserted in cl. (B) provision for suspension for period not exceeding twelve months or barring or suspending the broker or dealer from being associated with a broker or dealer, inserted at the beginning of cl. (C) “whether prior or subsequent to becoming a broker or dealer,” (derived from former cl. (1) of this paragraph) and added to cl. (C) provision conferring jurisdiction upon the Commission, an exchange, or a registered securities association to determine whether an individual is the cause of disciplinary action taken by them against a broker or a dealer, and added cl. (D).

Subsec. (b)(5). Pub. L. 88–467, § 7(a)(4), added par. (5). Former par. (5) redesignated (6).

Subsec. (b)(6) to (8). Pub. L. 88–467, § 7(a)(1), (4), substituted periods for semicolons at end of paragraphs, and redesignated former pars. (5) to (7) as (6) to (8), respectively. Former pars. (6) to (8) redesignated (7) to (9), respectively.

Subsec. (b)(9). Pub. L. 88–467, § 7(a)(1), (4), (5), substituted a period for the semicolon at the end, redesignated former par. (8) as (9), and inserted “and persons associated with its members” and “or being suspended or barred from being associated with all members,”, respectively. Former par. (9) redesignated (10).

Subsec. (b)(10). Pub. L. 88–467, § 7(a)(4), (6), redesignated former par. (9) as (10), and inserted in paragraph preceding cl. (A) “and persons associated with members”, “or the barring of any person from being associated with a member”, “or other persons”, and “or person”, substituted a period for a comma at end of cls. (A) and (B) and a period for “, and” at end of cl. (C), inserted in cl. (A) “or other person” in two places and in concluding sentence “or whether any person shall be barred from being associated with a member”, “or person”, “or bar” in two places, and substituted a period for “; and”, respectively. Former par. (10) redesignated (11).

Subsec. (b)(11). Pub. L. 88–467, § 7(a)(4), redesignated former par. (10) as (11).

Subsec. (b)(12). Pub. L. 88–467, § 7(a)(7), added par. (12).

Pub. L. 88–467, § 7(a)(7), inserted effective date provisions for application of subsec. (b) prior to its amendment and since its amendment with July 1, 1964 as the guiding date.

Subsec. (d)(2). Pub. L. 88–467, § 7(b), substituted “(10)” for “(9)” and inserted “and paragraph (12),” after “, inclusive,”.

Subsec. (g). Pub. L. 88–467, § 7(c), provided that disciplinary action taken by a registered securities association against a person associated with a member will be reviewable by the Commission, shortened the period for review by an aggrieved person from sixty days or within such longer period as the Commission may determine to thirty days or within such longer period as the Commission may determine, authorized the Commission, after notice and opportunity for hearing on the question of stay to order no stay of action of a registered securities association pending the Commission’s decision on review, and authorized the Commission to limit the hearing on the question of stay to affidavits and oral arguments.

Subsec. (h). Pub. L. 88–467, § 7(d), made the procedures and the Commission’s authority in reviewing disciplinary action by a registered securities association against members and in reviewing association action in denying membership also applicable to Commission review of disciplinary action against persons associated with members and to the barring by an association of any person from being associated with a member.

Subsec. (k)(2). Pub. L. 88–467, § 7(e), inserted “, or with such modifications of such alteration or supplement as it deems necessary” after “in the manner theretofore requested”, redesignated cls. (1) to (4) as (A) to (D), respectively, and inserted in cl. (A) “or the barring from being associated with a member” and “or persons associated with members, or the qualifications required for members or natural persons associated with members or any class thereof”.

Subsec. (l). Pub. L. 88–467, § 7(f), substituted a period for a semicolon at end of par. (1) and inserted in par. (2) preceding cl. (A) “, or to suspend for a period not exceeding twelve months or to bar any person from being associated with a member thereof,”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective Oct. 1, 2010, see section 975(i) of Pub. L. 111–203, set out as a note under section 78o of this title.

### Effective Date of 1999 Amendment

Amendment by Pub. L. 106–102 effective at the end of the 18-month period beginning on Nov. 12, 1999, see section 209 of Pub. L. 106–102, set out as a note under section 1828 of Title 12, Banks and Banking.

### Effective Date of 1993 Amendment

Amendment by section 303(a), (c) of Pub. L. 103–202 effective 12 months after Dec. 17, 1993, with provisions for rulemaking authority and review of filings prior to effective date, see section 304(a) of Pub. L. 103–202, set out as a note under section 78f of this title.

### Effective Date of 1990 Amendment

Amendment by Pub. L. 101–429 effective Oct. 15, 1990, with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(1), (2) of Pub. L. 101–429, set out in a note under section 77g of this title.

### Effective Date of 1986 Amendment

Amendment by Pub. L. 99–571 effective 270 days after Oct. 28, 1986, see section 401 of Pub. L. 99–571, set out as an Effective Date note under section 78o–5 of this title.

### Effective Date of 1975 Amendment

Amendment by Pub. L. 94–29 effective 180 days after June 4, 1975, see section 31(a) of Pub. L. 94–29, set out as a note under section 78b of this title.

### Effective Date of 1964 Amendment

Amendment by Pub. L. 88–467 effective Aug. 20, 1964, see section 13 of Pub. L. 88–467, set out as a note under section 78c of this title.

### Rulemaking

Pub. L. 117–263, div. E, title LVIII, § 5824(b), Dec. 23, 2022, 136 Stat. 3428, provided that: In general.—Not later than 2 years after the date on which final rules are promulgated under section 124(b)(2) of the Financial Stability Act of 2010 [12 U.S.C. 5334(b)(2)], as added by section 5811(a) of this title, each national securities association registered pursuant to section 15A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–3(a)) shall issue rules to adopt the standards required under subsection (n) of section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o–3), as added by subsection (a) of this section. Scaling of regulatory requirements; minimizing disruption.—In issuing the rules required under paragraph (1), a national securities association described in that paragraph— may scale data reporting requirements in order to reduce any unjustified burden on smaller regulated entities; and shall seek to minimize disruptive changes to the persons affected by those standards.”

### Rule of Construction—No New Disclosure Requirements

Amendment by Pub. L. 117–263 not to be construed to require certain additional information to be collected or disclosed, see section 5826 of Pub. L. 117–263, set out as a note under section 77g of this title.

### Construction of 1993 Amendment

Amendment by section 106(b)(1) of Pub. L. 103–202 not to be construed to govern initial issuance of any public debt obligation or to grant any authority to (or extend any authority of) the Securities and Exchange Commission, any appropriate regulatory agency, or a self-regulatory organization to prescribe any procedure, term, or condition of such initial issuance, to promulgate any rule or regulation governing such initial issuance, or to otherwise regulate in any manner such initial issuance, see section 111 of Pub. L. 103–202, set out as a note under section 78o–5 of this title.

Amendment by section 303(a), (c) of Pub. L. 103–202 not to limit authority of Securities and Exchange Commission, a registered securities association or a national securities exchange under any provision of this chapter, or preclude the Commission or such association or exchange from imposing a remedy or procedure required to be imposed under such amendment, see section 304(b) of Pub. L. 103–202, set out in an Effective Date of 1993 Amendment note under section 78f of this title.

### Executive Documents

### Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.