---
kind: "section"
citation: "15 U.S.C. § 78q–1"
title: "15"
title_heading: "Commerce and Trade"
number: "78q–1"
heading: "National system for clearance and settlement of securities transactions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78q-1"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78q–1. National system for clearance and settlement of securities transactions

- (a) **Congressional findings; facilitating establishment of system—**
  - (1) The Congress finds that—
    - (A) The prompt and accurate clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions, including the transfer of record ownership and the safeguarding of [securities](/usc/15/78c.md?p=a-10) and funds related thereto, are necessary for the protection of investors and [persons](/usc/15/78c.md?p=a-9) facilitating transactions by and acting on behalf of investors.
    - (B) Inefficient procedures for clearance and settlement impose unnecessary costs on investors and [persons](/usc/15/78c.md?p=a-9) facilitating transactions by and acting on behalf of investors.
    - (C) New data processing and communications techniques create the opportunity for more efficient, effective, and safe procedures for clearance and settlement.
    - (D) The linking of all clearance and settlement [facilities](/usc/15/78c.md?p=a-2) and the development of uniform standards and procedures for clearance and settlement will reduce unnecessary costs and increase the protection of investors and [persons](/usc/15/78c.md?p=a-9) facilitating transactions by and acting on behalf of investors.
  - (2)
    - (A) The [Commission](/usc/15/78c.md?p=a-15) is directed, therefore, having due regard for the public interest, the protection of investors, the safeguarding of [securities](/usc/15/78c.md?p=a-10) and funds, and maintenance of fair competition among [brokers](/usc/15/78c.md?p=a-4-A) and [dealers](/usc/15/78c.md?p=a-5-A), [clearing agencies](/usc/15/78c.md?p=a-23-A), and [transfer agents](/usc/15/78c.md?p=a-25), to use its authority under this chapter—
      - (i) to facilitate the establishment of a national system for the prompt and accurate clearance and settlement of transactions in [securities](/usc/15/78c.md?p=a-10) (other than exempt [securities](/usc/15/78c.md?p=a-10)); and
      - (ii) to facilitate the establishment of linked or coordinated [facilities](/usc/15/78c.md?p=a-2) for clearance and settlement of transactions in [securities](/usc/15/78c.md?p=a-10), [securities](/usc/15/78c.md?p=a-10) options, contracts of sale for future delivery and options thereon, and commodity options;

      in accordance with the findings and to carry out the objectives set forth in paragraph (1) of this subsection.

    - (B) The [Commission](/usc/15/78c.md?p=a-15) shall use its authority under this chapter to assure equal regulation under this chapter of registered [clearing agencies](/usc/15/78c.md?p=a-23-A) and registered [transfer agents](/usc/15/78c.md?p=a-25). In carrying out its responsibilities set forth in subparagraph (A)(ii) of this paragraph, the [Commission](/usc/15/78c.md?p=a-15) shall coordinate with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) and consult with the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System.
- (b) **Registration of clearing agencies; application; determinations by Commission requisite to registration of applicant as clearing agency; denial of participation; discipline; summary proceedings; exemption; facilities for handling derivatives—**
  - (1) Except as otherwise provided in this section, it shall be unlawful for any [clearing agency](/usc/15/78c.md?p=a-23-A), unless registered in accordance with this subsection, directly or indirectly, to make use of the mails or any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) to perform the functions of a [clearing agency](/usc/15/78c.md?p=a-23-A) with respect to any [security](/usc/15/78c.md?p=a-10) (other than an [exempted security](/usc/15/78c.md?p=a-12-A)). The [Commission](/usc/15/78c.md?p=a-15), by rule or order, upon its own motion or upon application, may conditionally or unconditionally exempt any [clearing agency](/usc/15/78c.md?p=a-23-A) or [security](/usc/15/78c.md?p=a-10) or any class of [clearing agencies](/usc/15/78c.md?p=a-23-A) or [securities](/usc/15/78c.md?p=a-10) from any provisions of this section or the rules or regulations thereunder, if the [Commission](/usc/15/78c.md?p=a-15) finds that such exemption is consistent with the public interest, the protection of investors, and the purposes of this section, including the prompt and accurate clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions and the safeguarding of [securities](/usc/15/78c.md?p=a-10) and funds. A [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) shall not perform the functions of both a [clearing agency](/usc/15/78c.md?p=a-23-A) and a [transfer agent](/usc/15/78c.md?p=a-25) unless such [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) is registered in accordance with this subsection and [subsection (c)](#c) of this section.
  - (2) A [clearing agency](/usc/15/78c.md?p=a-23-A) may be registered under the terms and conditions hereinafter provided in this subsection 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 [clearing agency](/usc/15/78c.md?p=a-23-A) 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 prompt and accurate clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions.
  - (3) A [clearing agency](/usc/15/78c.md?p=a-23-A) shall not be registered unless the [Commission](/usc/15/78c.md?p=a-15) determines that—
    - (A) Such [clearing agency](/usc/15/78c.md?p=a-23-A) is so organized and has the capacity to be able to facilitate the prompt and accurate clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions and derivative [agreements](/usc/15/7a.md?p=2), contracts, and transactions for which it is responsible, to safeguard [securities](/usc/15/78c.md?p=a-10) and funds in its custody or control or for which it is responsible, to comply with the provisions of this chapter and the rules and regulations thereunder, to enforce (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) compliance by its [participants](/usc/15/78c.md?p=a-24) with the rules of the [clearing agency](/usc/15/78c.md?p=a-23-A), and to carry out the purposes of this section.
    - (B) Subject to the provisions of paragraph (4) of this subsection, the rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) provide that any (i) [registered broker or dealer](/usc/15/78c.md?p=a-48), (ii) other registered [clearing agency](/usc/15/78c.md?p=a-23-A), (iii) registered [investment company](/usc/15/78c.md?p=a-12-A-iii), (iv) [bank](/usc/15/78c.md?p=a-6), (v) [insurance company](/usc/15/78c.md?p=a-19), or (vi) other [person](/usc/15/78c.md?p=a-9) or class of [persons](/usc/15/78c.md?p=a-9) as the [Commission](/usc/15/78c.md?p=a-15), by rule, may from time to time designate as appropriate to the development of a national system for the prompt and accurate clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions may become a [participant](/usc/15/78c.md?p=a-24) in such [clearing agency](/usc/15/78c.md?p=a-23-A).
    - (C) The rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) assure a fair representation of its shareholders (or [members](/usc/15/78c.md?p=a-3-A)) and [participants](/usc/15/78c.md?p=a-24) in the selection of its [directors](/usc/15/78c.md?p=a-7) and [administration](/usc/15/636e.md?p=1) of its affairs. (The [Commission](/usc/15/78c.md?p=a-15) may determine that the representation of [participants](/usc/15/78c.md?p=a-24) is fair if they are afforded a reasonable opportunity to acquire voting stock of the [clearing agency](/usc/15/78c.md?p=a-23-A), directly or indirectly, in reasonable proportion to their use of such [clearing agency](/usc/15/78c.md?p=a-23-A).)
    - (D) The rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) provide for the equitable allocation of reasonable dues, fees, and other charges among its [participants](/usc/15/78c.md?p=a-24).
    - (E) The rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) do not impose any schedule of prices, or fix rates or other fees, for services rendered by its [participants](/usc/15/78c.md?p=a-24).
    - (F) The rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) are designed to promote the prompt and accurate clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions and, to the extent applicable, derivative [agreements](/usc/15/7a.md?p=2), contracts, and transactions, to assure the safeguarding of [securities](/usc/15/78c.md?p=a-10) and funds which are in the custody or control of the [clearing agency](/usc/15/78c.md?p=a-23-A) or for which it is responsible, to foster cooperation and coordination with [persons](/usc/15/78c.md?p=a-9) engaged in the clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions, to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions, and, in general, to protect investors and the public interest; and are not designed to permit unfair discrimination in the admission of [participants](/usc/15/78c.md?p=a-24) or among [participants](/usc/15/78c.md?p=a-24) in the use of the [clearing agency](/usc/15/78c.md?p=a-23-A), or to regulate by virtue of any authority conferred by this chapter matters not related to the purposes of this section or the [administration](/usc/15/636e.md?p=1) of the [clearing agency](/usc/15/78c.md?p=a-23-A).
    - (G) The rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) 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 [participants](/usc/15/78c.md?p=a-24) shall be appropriately disciplined for violation of any provision of the rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) by expulsion, suspension, limitation of activities, functions, and operations, fine, censure, or any other fitting sanction.
    - (H) The rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) are in accordance with the provisions of paragraph (5) of this subsection, and, in general, provide a fair procedure with respect to the disciplining of [participants](/usc/15/78c.md?p=a-24), the denial of participation to any [person](/usc/15/78c.md?p=a-9) seeking participation therein, and the prohibition or limitation by the [clearing agency](/usc/15/78c.md?p=a-23-A) of any [person](/usc/15/78c.md?p=a-9) with respect to access to services offered by the [clearing agency](/usc/15/78c.md?p=a-23-A).
    - (I) The rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of this chapter.
  - (4)
    - (A) A registered [clearing agency](/usc/15/78c.md?p=a-23-A) may, and in cases in which the [Commission](/usc/15/78c.md?p=a-15), by order, directs as appropriate in the public interest shall, deny participation to any [person](/usc/15/78c.md?p=a-9) subject to a statutory disqualification. A registered [clearing agency](/usc/15/78c.md?p=a-23-A) shall file notice with the [Commission](/usc/15/78c.md?p=a-15) not less than thirty days prior to admitting any [person](/usc/15/78c.md?p=a-9) to participation, if the [clearing agency](/usc/15/78c.md?p=a-23-A) knew, or in the exercise of reasonable care should have known, that such [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.
    - (B) A registered [clearing agency](/usc/15/78c.md?p=a-23-A) may deny participation to, or condition the participation of, any [person](/usc/15/78c.md?p=a-9) if such [person](/usc/15/78c.md?p=a-9) does not meet such standards of financial responsibility, operational capability, experience, and competence as are prescribed by the rules of the [clearing agency](/usc/15/78c.md?p=a-23-A). A registered [clearing agency](/usc/15/78c.md?p=a-23-A) may examine and verify the qualifications of an [applicant](/usc/15/7a.md?p=3) to be a [participant](/usc/15/78c.md?p=a-24) in accordance with procedures established by the rules of the [clearing agency](/usc/15/78c.md?p=a-23-A).
  - (5)
    - (A) In any proceeding by a registered [clearing agency](/usc/15/78c.md?p=a-23-A) to determine whether a [participant](/usc/15/78c.md?p=a-24) should be disciplined (other than a summary proceeding pursuant to subparagraph (C) of this paragraph), the [clearing agency](/usc/15/78c.md?p=a-23-A) shall bring specific charges, notify such [participant](/usc/15/78c.md?p=a-24) of, and give him an opportunity to defend against such charges, and keep a record. A determination by the [clearing agency](/usc/15/78c.md?p=a-23-A) to impose a disciplinary sanction shall be supported by a statement setting forth—
      - (i) any act or practice in which such [participant](/usc/15/78c.md?p=a-24) has been found to have engaged, or which such [participant](/usc/15/78c.md?p=a-24) has been found to have omitted;
      - (ii) the specific provisions of the rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) which any such act or practice, or omission to act, is deemed to violate; and
      - (iii) the sanction imposed and the reasons therefor.
    - (B) In any proceeding by a registered [clearing agency](/usc/15/78c.md?p=a-23-A) to determine whether a [person](/usc/15/78c.md?p=a-9) shall be denied participation or prohibited or limited with respect to access to services offered by the [clearing agency](/usc/15/78c.md?p=a-23-A), the [clearing agency](/usc/15/78c.md?p=a-23-A) 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 or prohibition or limitation under consideration and keep a record. A determination by the [clearing agency](/usc/15/78c.md?p=a-23-A) to deny participation or prohibit or limit a [person](/usc/15/78c.md?p=a-9) with respect to access to services offered by the [clearing agency](/usc/15/78c.md?p=a-23-A) shall be supported by a statement setting forth the specific grounds on which the denial or prohibition or limitation is based.
    - (C) A registered [clearing agency](/usc/15/78c.md?p=a-23-A) may summarily suspend and close the accounts of a [participant](/usc/15/78c.md?p=a-24) who (i) has been and is expelled or suspended from any [self-regulatory organization](/usc/15/78c.md?p=a-26), (ii) is in default of any delivery of funds or [securities](/usc/15/78c.md?p=a-10) to the [clearing agency](/usc/15/78c.md?p=a-23-A), or (iii) is in such financial or operating difficulty that the [clearing agency](/usc/15/78c.md?p=a-23-A) determines and so notifies the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [participant](/usc/15/78c.md?p=a-24) that such suspension and closing of accounts are necessary for the protection of the [clearing agency](/usc/15/78c.md?p=a-23-A), its [participants](/usc/15/78c.md?p=a-24), creditors, or investors. A [participant](/usc/15/78c.md?p=a-24) so summarily suspended shall be promptly afforded an opportunity for a hearing by the [clearing agency](/usc/15/78c.md?p=a-23-A) in accordance with the provisions of subparagraph (A) of this paragraph. The [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [participant](/usc/15/78c.md?p=a-24), by order, may stay any such summary suspension on its own motion or upon application by any [person](/usc/15/78c.md?p=a-9) aggrieved thereby, if such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) 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 protection of investors.
  - (6) No registered [clearing agency](/usc/15/78c.md?p=a-23-A) shall prohibit or limit access by any [person](/usc/15/78c.md?p=a-9) to services offered by any [participant](/usc/15/78c.md?p=a-24) therein.
  - (7)
    - (A) A [clearing agency](/usc/15/78c.md?p=a-23-A) that is regulated directly or indirectly by the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) through its association with a designated contract market for [security futures products](/usc/15/78c.md?p=a-56) that is a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) registered pursuant to [section 78f(g) of this title](/usc/15/78f.md?p=g), and that would be required to register pursuant to paragraph (1) of this subsection only because it performs the functions of a [clearing agency](/usc/15/78c.md?p=a-23-A) with respect to [security futures products](/usc/15/78c.md?p=a-56) effected pursuant to the rules of the designated contract market with which such agency is associated, is exempted from the provisions of this section and the rules and regulations thereunder, except that if such a [clearing agency](/usc/15/78c.md?p=a-23-A) performs the functions of a [clearing agency](/usc/15/78c.md?p=a-23-A) with respect to a [security futures product](/usc/15/78c.md?p=a-56) that is not cash settled, it must have arrangements in place with a registered [clearing agency](/usc/15/78c.md?p=a-23-A) to effect the payment and delivery of the [securities](/usc/15/78c.md?p=a-10) underlying the [security futures product](/usc/15/78c.md?p=a-56).
    - (B) Any [clearing agency](/usc/15/78c.md?p=a-23-A) that performs the functions of a [clearing agency](/usc/15/78c.md?p=a-23-A) with respect to [security futures products](/usc/15/78c.md?p=a-56) must coordinate with and develop fair and reasonable links with any and all other [clearing agencies](/usc/15/78c.md?p=a-23-A) that perform the functions of a [clearing agency](/usc/15/78c.md?p=a-23-A) with respect to [security futures products](/usc/15/78c.md?p=a-56), in order to permit, as of the compliance date (as defined in [section 78f(h)(6)(C)](/usc/15/78f.md)[^1] of this title), [security futures products](/usc/15/78c.md?p=a-56) to be purchased on one market and offset on another market that trades such products.
  - (8) A registered [clearing agency](/usc/15/78c.md?p=a-23-A) shall be permitted to provide [facilities](/usc/15/78c.md?p=a-2) for the clearance and settlement of any derivative [agreements](/usc/15/7a.md?p=2), contracts, or transactions that are excluded from the Commodity Exchange Act [[7 U.S.C. 1](/usc/7/1.md) et seq.], subject to the requirements of this section and to such rules and regulations as the [Commission](/usc/15/78c.md?p=a-15) may prescribe as necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter.
- (c) **Registration of transfer agents—**
  - (1) Except as otherwise provided in this section, it shall be unlawful for any [transfer agent](/usc/15/78c.md?p=a-25), unless registered in accordance with this section, directly or indirectly, to make use of the mails or any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) to perform the function of a [transfer agent](/usc/15/78c.md?p=a-25) with respect to any [security](/usc/15/78c.md?p=a-10) registered under [section 78l](/usc/15/78l.md) of this title or which would be required to be registered except for the exemption from registration provided by subsection [(g)(2)(B)](/usc/15/78l.md?p=g-2-B) or [(g)(2)(G)](/usc/15/78l.md?p=g-2-G) of that section. The [appropriate regulatory agency](/usc/15/78c.md?p=a-34), by rule or order, upon its own motion or upon application, may conditionally or unconditionally exempt any [person](/usc/15/78c.md?p=a-9) or [security](/usc/15/78c.md?p=a-10) or class of [persons](/usc/15/78c.md?p=a-9) or [securities](/usc/15/78c.md?p=a-10) from any provision of this section or any rule or regulation prescribed under this section, if the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) finds (A) that such exemption is in the public interest and consistent with the protection of investors and the purposes of this section, including the prompt and accurate clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions and the safeguarding of [securities](/usc/15/78c.md?p=a-10) and funds, and (B) the [Commission](/usc/15/78c.md?p=a-15) does not object to such exemption.
  - (2) A [transfer agent](/usc/15/78c.md?p=a-25) may be registered by filing with the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [transfer agent](/usc/15/78c.md?p=a-25) an application for registration in such form and containing such information and documents concerning such [transfer agent](/usc/15/78c.md?p=a-25) and any [persons](/usc/15/78c.md?p=a-9) associated with the [transfer agent](/usc/15/78c.md?p=a-25) as such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) may prescribe as necessary or appropriate in furtherance of the purposes of this section. Except as hereinafter provided, such registration shall become effective 45 days after receipt of such application by such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) or within such shorter period of time as such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) may determine.
  - (3) The [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for a [transfer agent](/usc/15/78c.md?p=a-25), by order, shall deny registration to, censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding 12 months, or revoke the registration of such [transfer agent](/usc/15/78c.md?p=a-25), if such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) finds, on the record after notice and opportunity for hearing, that such denial, censure, placing of limitations, suspension, or revocation is in the public interest and that such [transfer agent](/usc/15/78c.md?p=a-25), whether prior or subsequent to becoming such, or any [person associated with](/usc/15/78c.md?p=a-63) such [transfer agent](/usc/15/78c.md?p=a-25), whether prior or subsequent to becoming so associated—
    - (A) has committed or omitted any act, or is subject to an order or finding, enumerated in subparagraph [(A)](#c-4-A), (D), (E), (H), or (G) of paragraph (4) of [section 78o(b)](/usc/15/78o.md?p=b) of this title, has been convicted of any offense specified in [subparagraph (B)](#c-3-B) of such [paragraph (4)](#c-4) within ten years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in [subparagraph (C)](#c-4-C) of such [paragraph (4)](#c-4); or
    - (B) is subject to an order entered pursuant to [subparagraph (C)](#c-4-C) of paragraph (4) of this subsection barring or suspending the right of such [person](/usc/15/78c.md?p=a-9) to be associated with a [transfer agent](/usc/15/78c.md?p=a-25).
  - (4)
    - (A) Pending [final determination](/usc/15/37a.md?p=4) whether any registration by a [transfer agent](/usc/15/78c.md?p=a-25) under this subsection shall be denied, the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [transfer agent](/usc/15/78c.md?p=a-25), by order, may postpone the effective date of such registration for a period not to exceed fifteen days, but if, after notice and opportunity for hearing (which may consist solely of affidavits and oral arguments), it shall appear to such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) to be necessary or appropriate in the public interest or for the protection of investors to postpone the effective date of such registration until [final determination](/usc/15/37a.md?p=4), such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) shall so order. Pending [final determination](/usc/15/37a.md?p=4) whether any registration under this subsection shall be revoked, such [appropriate regulatory agency](/usc/15/78c.md?p=a-34), by order, may suspend such registration, if such suspension appears to such [appropriate regulatory agency](/usc/15/78c.md?p=a-34), after notice and opportunity for hearing, to be necessary or appropriate in the public interest or for the protection of investors.
    - (B) A registered [transfer agent](/usc/15/78c.md?p=a-25) may, upon such terms and conditions as the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [transfer agent](/usc/15/78c.md?p=a-25) deems necessary or appropriate in the public interest, for the protection of investors, or in furtherance of the purposes of this section, withdraw from registration by filing a written notice of withdrawal with such [appropriate regulatory agency](/usc/15/78c.md?p=a-34). If such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) finds that any [transfer agent](/usc/15/78c.md?p=a-25) for which it is the [appropriate regulatory agency](/usc/15/78c.md?p=a-34), is no longer in existence or has ceased to do business as a [transfer agent](/usc/15/78c.md?p=a-25), such [appropriate regulatory agency](/usc/15/78c.md?p=a-34), by order, shall cancel or deny the registration.
    - (C) The [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for a [transfer agent](/usc/15/78c.md?p=a-25), by order, shall censure or place limitations on the activities or functions of any [person](/usc/15/78c.md?p=a-9) associated, seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated with the [transfer agent](/usc/15/78c.md?p=a-25), or suspend for a period not exceeding 12 months or bar any such [person](/usc/15/78c.md?p=a-9) from being associated with any [transfer agent](/usc/15/78c.md?p=a-25), [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), [investment adviser](/usc/15/78c.md?p=a-20), [municipal securities dealer](/usc/15/78c.md?p=a-30), municipal advisor, or [nationally recognized statistical rating organization](/usc/15/78c.md?p=a-62), if the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or bar is in the public interest and that such [person](/usc/15/78c.md?p=a-9) has committed or omitted any act, or is subject to an order or finding, enumerated in subparagraph [(A)](#c-4-A), (D), (E), (H), or (G) or[^2] [paragraph (4)](/usc/15/78o.md?p=b-4) of section 78o(b) of this title, has been convicted of any offense specified in [subparagraph (B)](#c-4-B) of such [paragraph (4)](#c-4) within ten years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in [subparagraph (C)](#c-4-C) of such [paragraph (4)](#c-4). It shall be unlawful for any [person](/usc/15/78c.md?p=a-9) as to whom such an order suspending or barring him from being associated with a [transfer agent](/usc/15/78c.md?p=a-25) is in effect willfully to become, or to be, associated with a [transfer agent](/usc/15/78c.md?p=a-25) without the consent of the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) that entered the order and the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for that [transfer agent](/usc/15/78c.md?p=a-25). It shall be unlawful for any [transfer agent](/usc/15/78c.md?p=a-25) to permit such a [person](/usc/15/78c.md?p=a-9) to become, or remain, a [person associated with](/usc/15/78c.md?p=a-63) it without the consent of such [appropriate regulatory agencies](/usc/15/78c.md?p=a-34), if the [transfer agent](/usc/15/78c.md?p=a-25) knew, or in the exercise of reasonable care should have known, of such order. The [Commission](/usc/15/78c.md?p=a-15) may establish, by rule, procedures by which a [transfer agent](/usc/15/78c.md?p=a-25) reasonably can determine whether a [person](/usc/15/78c.md?p=a-9) associated or seeking to become associated with it is subject to any such order, and may require, by rule, that any [transfer agent](/usc/15/78c.md?p=a-25) comply with such procedures.
- (d) **Activities of clearing agencies and transfer agents; enforcement by appropriate regulatory agencies—**
  - (1) No registered [clearing agency](/usc/15/78c.md?p=a-23-A) or registered [transfer agent](/usc/15/78c.md?p=a-25) shall, directly or indirectly, engage in any activity as [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) in contravention of such rules and regulations (A) as the [Commission](/usc/15/78c.md?p=a-15) may prescribe as necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter, or (B) as the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) may prescribe as necessary or appropriate for the safeguarding of [securities](/usc/15/78c.md?p=a-10) and funds.
  - (2) With respect to any [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) for which the [Commission](/usc/15/78c.md?p=a-15) is not the [appropriate regulatory agency](/usc/15/78c.md?p=a-34), the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) may, in accordance with [section 1818 of title 12](/usc/12/1818.md), enforce compliance by such [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) with the provisions of this section, sections [78q](/usc/15/78q.md) and [78s](/usc/15/78s.md) of this title, and the rules and regulations thereunder. For purposes of the preceding sentence, any violation of any such provision shall constitute adequate basis for the issuance of an order under section [1818(b)](/usc/12/1818.md?p=b) or [1818(c)](/usc/12/1818.md?p=c) of title 12, and the [participants](/usc/15/78c.md?p=a-24) in any such [clearing agency](/usc/15/78c.md?p=a-23-A) and the [persons](/usc/15/78c.md?p=a-9) doing business with any such [transfer agent](/usc/15/78c.md?p=a-25) shall be deemed to be “depositors” as that term is used in [section 1818(c) of title 12](/usc/12/1818.md?p=c).
  - (3)
    - (A) With respect to any [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) for which the [Commission](/usc/15/78c.md?p=a-15) is not the [appropriate regulatory agency](/usc/15/78c.md?p=a-34), the [Commission](/usc/15/78c.md?p=a-15) and the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) shall consult and cooperate with each other, and, as may be appropriate, with [State](/usc/15/78c.md?p=a-16) banking authorities having supervision over such [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) toward the end that, to the maximum extent practicable, their respective regulatory responsibilities may be fulfilled and the rules and regulations applicable to such [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) may be in accord with both sound banking practices and a national system for the prompt and accurate clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions. In accordance with this objective—
      - (i) the [Commission](/usc/15/78c.md?p=a-15) and such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) shall, at least fifteen days prior to the issuance for public comment of any proposed rule or regulation or adoption of any rule or regulation concerning such [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25), consult and request the views of the other; and
      - (ii) such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) shall assume primary responsibility to examine and enforce compliance by such [clearing agency](/usc/15/78c.md?p=a-23-A) or [transfer agent](/usc/15/78c.md?p=a-25) with the provisions of this section and sections [78q](/usc/15/78q.md) and [78s](/usc/15/78s.md) of this title.
    - (B) Nothing in the preceding subparagraph or elsewhere in this chapter shall be construed to impair or limit (other than by the requirement of notification) the [Commission](/usc/15/78c.md?p=a-15)’s authority to make rules under any provision of this chapter or to enforce compliance pursuant to any provision of this chapter by any [clearing agency](/usc/15/78c.md?p=a-23-A), [transfer agent](/usc/15/78c.md?p=a-25), or [person associated with a transfer agent](/usc/15/78c.md?p=a-49) with the provisions of this chapter and the rules and regulations thereunder.
  - (4) Nothing in this section shall be construed to impair the authority of any [State](/usc/15/78c.md?p=a-16) banking authority or other [State](/usc/15/78c.md?p=a-16) or Federal regulatory authority having jurisdiction over a [person](/usc/15/78c.md?p=a-9) registered as a [clearing agency](/usc/15/78c.md?p=a-23-A), [transfer agent](/usc/15/78c.md?p=a-25), or [person associated with a transfer agent](/usc/15/78c.md?p=a-49), to make and enforce rules governing such [person](/usc/15/78c.md?p=a-9) which are not inconsistent with this chapter and the rules and regulations thereunder.
  - (5) A registered [transfer agent](/usc/15/78c.md?p=a-25) may not, directly or indirectly, engage in any activity in connection with the guarantee of a signature of an endorser of a [security](/usc/15/78c.md?p=a-10), including the acceptance or rejection of such guarantee, in contravention of such rules and regulations as the [Commission](/usc/15/78c.md?p=a-15) may prescribe as necessary or appropriate in the public interest, for the protection of investors, to facilitate the equitable treatment of [financial institutions](/usc/15/78c.md?p=a-46) which issue such guarantees, or otherwise in furtherance of the purposes of this chapter.
- (e) **Physical movement of securities certificates—** The [Commission](/usc/15/78c.md?p=a-15) shall use its authority under this chapter to end the physical movement of [securities](/usc/15/78c.md?p=a-10) certificates in connection with the settlement among [brokers](/usc/15/78c.md?p=a-4-A) and [dealers](/usc/15/78c.md?p=a-5-A) of transactions in [securities](/usc/15/78c.md?p=a-10) consummated by means of the mails or any means or instrumentalities of [interstate commerce](/usc/15/78c.md?p=a-17).
- (f) **Rules concerning transfer of securities and rights and obligations of involved or affected parties—**
  - (1) Notwithstanding any provision of [State](/usc/15/78c.md?p=a-16) law, except as provided in [paragraph (3)](#f-3), if the [Commission](/usc/15/78c.md?p=a-15) makes each of the findings described in [paragraph (2)(A)](#f-2-A), the [Commission](/usc/15/78c.md?p=a-15) may adopt rules concerning—
    - (A) the transfer of certificated or uncertificated [securities](/usc/15/78c.md?p=a-10) (other than [government securities](/usc/15/78c.md?p=a-42) issued pursuant to [chapter 31](/usc/31/chstIII/ch31.md) of title 31 or [securities](/usc/15/78c.md?p=a-10) otherwise processed within a book-entry system operated by the Federal Reserve [banks](/usc/15/78c.md?p=a-6) pursuant to a Federal book-entry regulation) or limited interests (including [security](/usc/15/78c.md?p=a-10) interests) therein; and
    - (B) rights and obligations of purchasers, sellers, owners, lenders, borrowers, and financial intermediaries (including [brokers](/usc/15/78c.md?p=a-4-A), [dealers](/usc/15/78c.md?p=a-5-A), [banks](/usc/15/78c.md?p=a-6), and [clearing agencies](/usc/15/78c.md?p=a-23-A)) involved in or affected by such transfers, and the rights of third parties whose interests in such [securities](/usc/15/78c.md?p=a-10) devolve from such transfers.
  - (2)
    - (A) The findings described in this paragraph are findings by the [Commission](/usc/15/78c.md?p=a-15) that—
      - (i) such rule is necessary or appropriate for the protection of investors or in the public interest and is reasonably designed to promote the prompt, accurate, and safe clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions;
      - (ii) in the absence of a uniform rule, the safe and efficient operation of the national system for clearance and settlement of [securities](/usc/15/78c.md?p=a-10) transactions will be, or is, substantially impeded; and
      - (iii) to the extent such rule will impair or diminish, directly or indirectly, rights of [persons](/usc/15/78c.md?p=a-9) specified in [paragraph (1)(B)](#f-1-B) under [State](/usc/15/78c.md?p=a-16) law concerning transfers of [securities](/usc/15/78c.md?p=a-10) (or limited interests therein), the benefits of such rule outweigh such impairment or diminution of rights.
    - (B) In making the findings described in [subparagraph (A)](#f-2-A), the [Commission](/usc/15/78c.md?p=a-15) shall give consideration to the recommendations of the Advisory Committee established under [paragraph (4)](#f-4), and it shall consult with and consider the views of the Secretary of the Treasury and the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System. If the Secretary of the Treasury objects, in writing, to any proposed rule of the [Commission](/usc/15/78c.md?p=a-15) on the basis of the Secretary’s view on the issues described in clauses [(i)](#f-2-A-i), [(ii)](#f-2-A-ii), and [(iii)](#f-2-A-iii) of subparagraph (A), the [Commission](/usc/15/78c.md?p=a-15) shall consider all feasible alternatives to the proposed rule, and it shall not adopt any such rule unless the [Commission](/usc/15/78c.md?p=a-15) makes an explicit finding that the rule is the most practicable method for achieving safe and efficient operation of the national clearance and settlement system.
  - (3) Any [State](/usc/15/78c.md?p=a-16) may, prior to the expiration of 2 years after the [Commission](/usc/15/78c.md?p=a-15) adopts a rule under this subsection, enact a statute that specifically refers to this subsection and the specific rule thereunder and establishes, prospectively from the date of enactment of the [State](/usc/15/78c.md?p=a-16) statute, a provision that differs from that applicable under the [Commission](/usc/15/78c.md?p=a-15)’s rule.
  - (4)
    - (A) Within 90 days after October 16, 1990, the [Commission](/usc/15/78c.md?p=a-15) shall (and at such times thereafter as the [Commission](/usc/15/78c.md?p=a-15) may determine, the [Commission](/usc/15/78c.md?p=a-15) may), after consultation with the Secretary of the Treasury and the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System, establish an advisory committee under chapter 10 of title 5. The Advisory Committee shall be directed to consider and report to the [Commission](/usc/15/78c.md?p=a-15) on such matters as the [Commission](/usc/15/78c.md?p=a-15), after consultation with the Secretary of the Treasury and the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System, determines, including the areas, if any, in which [State](/usc/15/78c.md?p=a-16) commercial laws and related Federal laws concerning the transfer of certificated or uncertificated [securities](/usc/15/78c.md?p=a-10), limited interests (including [security](/usc/15/78c.md?p=a-10) interests) in such [securities](/usc/15/78c.md?p=a-10), or the creation or perfection of [security](/usc/15/78c.md?p=a-10) interests in such [securities](/usc/15/78c.md?p=a-10) do not provide the necessary certainty, uniformity, and clarity for purchasers, sellers, owners, lenders, borrowers, and financial intermediaries concerning their respective rights and obligations.
    - (B) The Advisory Committee shall consist of 15 [members](/usc/15/78c.md?p=a-3-A), of which—
      - (i) 11 shall be designated by the [Commission](/usc/15/78c.md?p=a-15) in accordance with [chapter 10](/usc/5/chptI/ch10.md) of title 5; and
      - (ii) 2 each shall be designated by the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System and the Secretary of the Treasury.
    - (C) The Advisory Committee shall conduct its activities in accordance with chapter 10 of title 5. Within 6 months of its designation, or such longer time as the [Commission](/usc/15/78c.md?p=a-15) may designate, the Advisory Committee shall issue a report to the [Commission](/usc/15/78c.md?p=a-15), and shall cause copies of that report to be delivered to the Secretary of the Treasury and the Chairman of the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System.
- (g) **3 Due diligence for the delivery of dividends, interest, and other valuable property rights—**
  - (1) **Revision of rules required—** The [Commission](/usc/15/78c.md?p=a-15) shall revise its regulations in section 240.17Ad–17 of title 17, Code of Federal Regulations, as in effect on December 8, 1997, to extend the application of such section to [brokers](/usc/15/78c.md?p=a-4-A) and [dealers](/usc/15/78c.md?p=a-5-A) and to provide for the following:
    - (A) A requirement that the paying agent provide a single written notification to each missing [security](/usc/15/78c.md?p=a-10) holder that the missing [security](/usc/15/78c.md?p=a-10) holder has been sent a check that has not yet been negotiated. The written notification may be sent along with a check or other mailing subsequently sent to the missing [security](/usc/15/78c.md?p=a-10) holder but must be provided no later than 7 months after the sending of the not yet negotiated check.
    - (B) An exclusion for paying agents from the notification requirements when the value of the not yet negotiated check is less than $25.
    - (C) A provision clarifying that the requirements described in [subparagraph (A)](#g-1-A) shall have no effect on [State](/usc/15/78c.md?p=a-16) escheatment laws.
    - (D) For purposes of such revised regulations—
      - (i) a [security](/usc/15/78c.md?p=a-10) holder shall be considered a “missing [security](/usc/15/78c.md?p=a-10) holder” if a check is sent to the [security](/usc/15/78c.md?p=a-10) holder and the check is not negotiated before the earlier of the paying agent sending the next regularly scheduled check or the elapsing of 6 months after the sending of the not yet negotiated check; and
      - (ii) the term “paying agent” includes any [issuer](/usc/15/78c.md?p=a-8), [transfer agent](/usc/15/78c.md?p=a-25), [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), [investment adviser](/usc/15/78c.md?p=a-20), indenture trustee, custodian, or any other [person](/usc/15/78c.md?p=a-9) that accepts payments from the [issuer](/usc/15/78c.md?p=a-8) of a [security](/usc/15/78c.md?p=a-10) and distributes the payments to the holders of the [security](/usc/15/78c.md?p=a-10).
  - (2) **Rulemaking—** The [Commission](/usc/15/78c.md?p=a-15) shall adopt such rules, regulations, and orders necessary to implement this subsection no later than 1 year after July 21, 2010. In proposing such rules, the [Commission](/usc/15/78c.md?p=a-15) shall seek to minimize disruptions to current systems used by or on behalf of paying agents to process payment to account holders and avoid requiring multiple paying agents to send written notification to a missing [security](/usc/15/78c.md?p=a-10) holder regarding the same not yet negotiated check.
- (g) **3 Registration requirement—** It shall be unlawful for a [clearing agency](/usc/15/78c.md?p=a-23-A), unless registered with the [Commission](/usc/15/78c.md?p=a-15), directly or indirectly to make use of the mails or any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) to perform the functions of a [clearing agency](/usc/15/78c.md?p=a-23-A) with respect to a [security-based swap](/usc/15/78c.md?p=a-68-A).
- (h) **Voluntary registration—** A [person](/usc/15/78c.md?p=a-9) that clears [agreements](/usc/15/7a.md?p=2), contracts, or transactions that are not required to be cleared under this chapter may register with the [Commission](/usc/15/78c.md?p=a-15) as a [clearing agency](/usc/15/78c.md?p=a-23-A).
- (i) **Standards for clearing agencies clearing security-based swap transactions—** To be registered and to maintain registration as a [clearing agency](/usc/15/78c.md?p=a-23-A) that clears [security-based swap](/usc/15/78c.md?p=a-68-A) transactions, a [clearing agency](/usc/15/78c.md?p=a-23-A) shall comply with such standards as the [Commission](/usc/15/78c.md?p=a-15) may establish by rule. In establishing any such standards, and in the exercise of its oversight of such a [clearing agency](/usc/15/78c.md?p=a-23-A) pursuant to this chapter, the [Commission](/usc/15/78c.md?p=a-15) may conform such standards or oversight to reflect evolving United States and international standards. Except where the [Commission](/usc/15/78c.md?p=a-15) determines otherwise by rule or regulation, a [clearing agency](/usc/15/78c.md?p=a-23-A) shall have reasonable discretion in establishing the manner in which it complies with any such standards.
- (j) **Rules—** The [Commission](/usc/15/78c.md?p=a-15) shall adopt rules governing [persons](/usc/15/78c.md?p=a-9) that are registered as [clearing agencies](/usc/15/78c.md?p=a-23-A) for [security-based swaps](/usc/15/78c.md?p=a-68-A) under this chapter.
- (k) **Exemptions—** The [Commission](/usc/15/78c.md?p=a-15) may exempt, conditionally or unconditionally, a [clearing agency](/usc/15/78c.md?p=a-23-A) from registration under this section for the clearing of [security-based swaps](/usc/15/78c.md?p=a-68-A) if the [Commission](/usc/15/78c.md?p=a-15) determines that the [clearing agency](/usc/15/78c.md?p=a-23-A) is subject to comparable, comprehensive supervision and regulation by the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) or the appropriate government authorities in the home country of the agency. Such conditions may include, but are not limited to, requiring that the [clearing agency](/usc/15/78c.md?p=a-23-A) be available for inspection by the [Commission](/usc/15/78c.md?p=a-15) and make available all information requested by the [Commission](/usc/15/78c.md?p=a-15).
- (l) **Existing depository institutions and derivative clearing organizations—**
  - (1) **In general—** A depository institution or derivative clearing organization registered with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) under the Commodity Exchange Act [[7 U.S.C. 1](/usc/7/1.md) et seq.] that is required to be registered as a [clearing agency](/usc/15/78c.md?p=a-23-A) under this section is deemed to be registered under this section solely for the purpose of clearing [security-based swaps](/usc/15/78c.md?p=a-68-A) to the extent that, before July 21, 2010—
    - (A) the depository institution cleared [swaps](/usc/15/78c.md?p=a-69) as a multilateral clearing organization; or
    - (B) the derivative clearing organization cleared [swaps](/usc/15/78c.md?p=a-69) pursuant to an exemption from registration as a [clearing agency](/usc/15/78c.md?p=a-23-A).
  - (2) **Conversion of depository institutions—** A depository institution to which this subsection applies may, by the vote of the shareholders owning not less than 51 percent of the voting interests of the depository institution, be converted into a [State](/usc/15/78c.md?p=a-16) corporation, partnership, limited liability [company](/usc/15/78c.md?p=a-19), or similar legal form pursuant to a plan of conversion, if the conversion is not in contravention of applicable [State](/usc/15/78c.md?p=a-16) law.
  - (3) **Sharing of information—** The Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) shall make available to the [Commission](/usc/15/78c.md?p=a-15), upon request, all information determined to be relevant by the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) regarding a derivatives clearing organization deemed to be registered with the [Commission](/usc/15/78c.md?p=a-15) under [paragraph (1)](#l-1).
- (m) **Modification of core principles—** The [Commission](/usc/15/78c.md?p=a-15) may conform the core principles established in this section to reflect evolving United States and international standards.

## Footnotes

[^1]: So in original. Probably should be “section 78f(h)(7)(C)”.
[^2]: So in original. Probably should be “of”.
[^3]: So in original. Two subsecs. (g) have been enacted.

## Source credit

(June 6, 1934, ch. 404, title I, § 17A, as added Pub. L. 94–29, § 15, June 4, 1975, 89 Stat. 141; amended Pub. L. 100–181, title III, § 322, Dec. 4, 1987, 101 Stat. 1257; Pub. L. 101–429, title II, § 206, Oct. 15, 1990, 104 Stat. 941; Pub. L. 101–432, § 5, Oct. 16, 1990, 104 Stat. 973; Pub. L. 101–550, title II, § 203(c)(1), Nov. 15, 1990, 104 Stat. 2718; Pub. L. 106–554, § 1(a)(5) [title II, §§ 206(d), 207], Dec. 21, 2000, 114 Stat. 2763, 2763A–431, 2763A–434; Pub. L. 107–204, title VI, § 604(c)(1)(C), July 30, 2002, 116 Stat. 796; Pub. L. 111–203, title VII, § 763(b), title IX, §§ 925(a)(3), 929W, July 21, 2010, 124 Stat. 1768, 1851, 1869; Pub. L. 117–286, § 4(a)(63), Dec. 27, 2022, 136 Stat. 4312.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsecs. (a)(2), (b)(3)(A), (F), (I), (8), (d)(1), (3)(B), (4), (5), (e), and (h) to (j), was in the original “this title”. See References in Text note set out under section 78a of this title.

The Commodity Exchange Act, referred to in subsecs. (b)(8) and (l)(1), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§ 1 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 1 of Title 7 and Tables.

### Amendments

2022—Subsec. (f)(4)(A). Pub. L. 117–286, § 4(a)(63)(A), substituted “chapter 10 of title 5.” for “the Federal Advisory Committee Act (5 U.S.C. App.).”

Subsec. (f)(4)(B)(i). Pub. L. 117–286, § 4(a)(63)(B), substituted “chapter 10 of title 5;” for “the Federal Advisory Committee Act;”.

Subsec. (f)(4)(C). Pub. L. 117–286, § 4(a)(63)(C), substituted “chapter 10 of title 5.” for “the Federal Advisory Committee Act.”

2010—Subsec. (c)(4)(C). Pub. L. 111–203, § 925(a)(3), substituted “12 months or bar any such person from being associated with any transfer agent, broker, dealer, investment adviser, municipal securities dealer, municipal advisor, or nationally recognized statistical rating organization,” for “twelve months or bar any such person from being associated with the transfer agent,”.

Subsec. (g). Pub. L. 111–203, § 929W, added subsec. (g) relating to due diligence for the delivery of dividends, interest, and other valuable property rights.

Pub. L. 111–203, § 763(b), added subsec. (g) relating to registration requirement.

Subsecs. (h) to (m). Pub. L. 111–203, § 763(b), added subsecs. (h) to (m).

2002—Subsec. (c)(3)(A), (4)(C). Pub. L. 107–204 inserted “, or is subject to an order or finding,” before “enumerated” and substituted “(H), or (G)” for “or (G)”.

2000—Subsec. (b)(3)(A). Pub. L. 106–554, § 1(a)(5) [title II, § 207(1)], inserted “and derivative agreements, contracts, and transactions” after “prompt and accurate clearance and settlement of securities transactions”.

Subsec. (b)(3)(F). Pub. L. 106–554, § 1(a)(5) [title II, § 207(2)], inserted “and, to the extent applicable, derivative agreements, contracts, and transactions” after “designed to promote the prompt and accurate clearance and settlement of securities transactions”.

Subsec. (b)(7). Pub. L. 106–554, § 1(a)(5) [title II, § 206(d)], added par. (7).

Subsec. (b)(8). Pub. L. 106–554, § 1(a)(5) [title II, § 207(3)], added par. (8).

1990—Subsec. (a)(2). Pub. L. 101–432, § 5(a), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The Commission is directed, therefore, having due regard for the public interest, the protection of investors, the safeguarding of securities and funds, and maintenance of fair competition among brokers and dealers, clearing agencies, and transfer agents, to use its authority under this chapter to facilitate the establishment of a national system for the prompt and accurate clearance and settlement of transactions in securities (other than exempted securities) in accordance with the findings and to carry out the objectives set forth in paragraph (1) of this subsection. The Commission shall use its authority under this chapter to assure equal regulation under this chapter of registered clearing agencies and registered transfer agents.”

Subsec. (c)(3)(A), (4)(C). Pub. L. 101–550 substituted “(A), (D), (E), or (G)” for “(A), (D), or (E)”.

Subsec. (d)(5). Pub. L. 101–429 added par. (5).

Subsec. (f). Pub. L. 101–432, § 5(b), added subsec. (f).

1987—Subsec. (c)(2). Pub. L. 100–181, § 322(1), (2), inserted “and any persons associated with the transfer agent” in first sentence and substituted “45” for “thirty” in second sentence.

Subsec. (c)(3), (4). Pub. L. 100–181, § 322(3)–(5), added par. (3), struck out former par. (3)(A) which read as follows: “The appropriate regulatory agency for a transfer agent, by order, shall deny registration to, censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding twelve months, or revoke the registration of such transfer agent, if such appropriate regulatory agency finds, on the record after notice and opportunity for hearing, that such denial, censure, placing of limitations, suspension, or revocation is in the public interest and that such transfer agent has willfully violated or is unable to comply with any provision of this section or section 78q of this title or the rules or regulations thereunder.”, redesignated subpars. (B) and (C) of former par. (3) as subpars. (A) and (B), respectively, of new par. (4), and added subpar. (C) to such par. (4).

Subsec. (d)(3)(B). Pub. L. 100–181, § 322(6), substituted “clearing agency, transfer agent, or person associated with a transfer agent” for “clearing agency or transfer agent”.

Subsec. (d)(4). Pub. L. 100–181, § 322(7), substituted “, transfer agent, or person associated with a transfer agent,” for “or transfer agent”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by sections 925(a)(3) and 929W of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.

Amendment by section 763(b) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b 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

Section effective June 4, 1975, except for subsecs. (b) and (c) which are 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.

### Clearance and Settlement of Transactions; Report to Congress

Section 8(b) of Pub. L. 101–432 directed Securities and Exchange Commission, in consultation with Commodity Futures Trading Commission, Board of Governors of the Federal Reserve System, and other relevant regulatory authorities, to examine progress toward establishing linked or coordinated facilities for clearance and settlement of transactions in securities, securities options, contracts of sale for future delivery and options thereon, and commodity options, and to submit to Congress, not later than 2 years from Oct. 16, 1990, a report detailing and evaluating such progress.