---
kind: "section"
citation: "15 U.S.C. § 78s"
title: "15"
title_heading: "Commerce and Trade"
number: "78s"
heading: "Registration, responsibilities, and oversight of self-regulatory organizations"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78s"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78s. Registration, responsibilities, and oversight of self-regulatory organizations

- (a) **Registration procedures; notice of filing; other regulatory agencies—**
  - (1) The [Commission](/usc/15/78c.md?p=a-15) shall, upon the filing of an application for registration as a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1), registered [securities](/usc/15/78c.md?p=a-10) association, or registered [clearing agency](/usc/15/78c.md?p=a-23-A), pursuant to section [78f](/usc/15/78f.md), [78o–3](/usc/15/78o–3.md), or [78q–1](/usc/15/78q–1.md) of this title, respectively, publish notice of such filing and afford interested [persons](/usc/15/78c.md?p=a-9) an opportunity to submit written data, views, and arguments concerning such application. Within ninety days of the date of publication of such notice (or within such longer period as to which the [applicant](/usc/15/7a.md?p=3) consents), the [Commission](/usc/15/78c.md?p=a-15) shall—
    - (A) by order grant such registration, or
    - (B) institute proceedings to determine whether registration should be denied. Such proceedings shall include notice of the grounds for denial under consideration and opportunity for hearing and shall be concluded within one hundred eighty days of the date of a publication of notice of the filing of the application for registration. At the conclusion of such proceedings the [Commission](/usc/15/78c.md?p=a-15), by order, shall grant or deny such registration. The [Commission](/usc/15/78c.md?p=a-15) may extend the time for conclusion of such proceedings for up to ninety days if it finds good cause for such extension and publishes its reasons for so finding or for such longer period as to which the [applicant](/usc/15/7a.md?p=3) consents.

    The [Commission](/usc/15/78c.md?p=a-15) shall grant such registration if it finds that the requirements of this chapter and the rules and regulations thereunder with respect to the [applicant](/usc/15/7a.md?p=3) are satisfied. The [Commission](/usc/15/78c.md?p=a-15) shall deny such registration if it does not make such finding.

  - (2) With respect to an application for registration filed by a [clearing agency](/usc/15/78c.md?p=a-23-A) for which the [Commission](/usc/15/78c.md?p=a-15) is not the [appropriate regulatory agency](/usc/15/78c.md?p=a-34)—
    - (A) The [Commission](/usc/15/78c.md?p=a-15) shall not grant registration prior to the sixtieth day after the date of publication of notice of the filing of such application unless the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) has notified the [Commission](/usc/15/78c.md?p=a-15) of such [appropriate regulatory agency](/usc/15/78c.md?p=a-34)’s determination that such [clearing agency](/usc/15/78c.md?p=a-23-A) is so organized and has the capacity to be able to safeguard [securities](/usc/15/78c.md?p=a-10) and funds in its custody or control or for which it is responsible and that the rules of such [clearing agency](/usc/15/78c.md?p=a-23-A) are designed to assure the safeguarding of such [securities](/usc/15/78c.md?p=a-10) and funds.
    - (B) The [Commission](/usc/15/78c.md?p=a-15) shall institute proceedings in accordance with paragraph (1)(B) of this subsection to determine whether registration should be denied if the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) notifies the [Commission](/usc/15/78c.md?p=a-15) within sixty days of the date of publication of notice of the filing of such application of such [appropriate regulatory agency](/usc/15/78c.md?p=a-34)’s (i) determination that such [clearing agency](/usc/15/78c.md?p=a-23-A) may not be so organized or have the capacity to be able to safeguard [securities](/usc/15/78c.md?p=a-10) or funds in its custody or control or for which it is responsible or that the rules of such [clearing agency](/usc/15/78c.md?p=a-23-A) may not be designed to assure the safeguarding of such [securities](/usc/15/78c.md?p=a-10) and funds and (ii) reasons for such determination.
    - (C) The [Commission](/usc/15/78c.md?p=a-15) shall deny registration if the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) notifies the [Commission](/usc/15/78c.md?p=a-15) prior to the conclusion of proceedings instituted in accordance with paragraph (1)(B) of this subsection of such [appropriate regulatory agency](/usc/15/78c.md?p=a-34)’s (i) determination that such [clearing agency](/usc/15/78c.md?p=a-23-A) is not so organized or does not have the capacity to be able to safeguard [securities](/usc/15/78c.md?p=a-10) or funds in its custody or control or for which it is responsible or that the rules of such [clearing agency](/usc/15/78c.md?p=a-23-A) are not designed to assure the safeguarding of such [securities](/usc/15/78c.md?p=a-10) or funds and (ii) reasons for such determination.
  - (3) A [self-regulatory organization](/usc/15/78c.md?p=a-26) may, upon such terms and conditions as the [Commission](/usc/15/78c.md?p=a-15), by rule, deems necessary or appropriate in the public interest or for the protection of investors, withdraw from registration by filing a written notice of withdrawal with the [Commission](/usc/15/78c.md?p=a-15). If the [Commission](/usc/15/78c.md?p=a-15) finds that any [self-regulatory organization](/usc/15/78c.md?p=a-26) is no longer in existence or has ceased to do business in the capacity specified in its application for registration, the [Commission](/usc/15/78c.md?p=a-15), by order, shall cancel its registration. Upon the withdrawal of a national [securities](/usc/15/78c.md?p=a-10) association from registration or the cancellation, suspension, or revocation of the registration of a national [securities](/usc/15/78c.md?p=a-10) association, the registration of any association affiliated therewith shall automatically terminate.
- (b) **Proposed rule changes; notice; proceedings—**
  - (1) Each [self-regulatory organization](/usc/15/78c.md?p=a-26) shall file with the [Commission](/usc/15/78c.md?p=a-15), in accordance with such rules as the [Commission](/usc/15/78c.md?p=a-15) may prescribe, copies of any proposed rule or any proposed change in, addition to, or deletion from the rules of such [self-regulatory organization](/usc/15/78c.md?p=a-26) (hereinafter in this subsection collectively referred to as a “proposed rule change”) accompanied by a concise general statement of the basis and purpose of such proposed rule change. The [Commission](/usc/15/78c.md?p=a-15) shall, as soon as practicable after the date of the filing of any proposed rule change, publish notice thereof together with the terms of substance of the proposed rule change or a description of the subjects and issues involved. The [Commission](/usc/15/78c.md?p=a-15) shall give interested [persons](/usc/15/78c.md?p=a-9) an opportunity to submit written data, views, and arguments concerning such proposed rule change. No proposed rule change shall take effect unless approved by the [Commission](/usc/15/78c.md?p=a-15) or otherwise permitted in accordance with the provisions of this subsection.
  - (2) **Approval process.—**
    - (A) **Approval process established.—**
      - (i) **In general.—** Except as provided in [clause (ii)](#b-2-A-ii), not later than 45 days after the date of publication of a proposed rule change under [paragraph (1)](#b-1), the [Commission](/usc/15/78c.md?p=a-15) shall—
        - (I) by order, approve or disapprove the proposed rule change; or
        - (II) institute proceedings under [subparagraph (B)](#b-2-B) to determine whether the proposed rule change should be disapproved.
      - (ii) **Extension of time period.—** The [Commission](/usc/15/78c.md?p=a-15) may extend the period established under [clause (i)](#b-2-A-i) by not more than an additional 45 days, if—
        - (I) the [Commission](/usc/15/78c.md?p=a-15) determines that a longer period is appropriate and publishes the reasons for such determination; or
        - (II) the [self-regulatory organization](/usc/15/78c.md?p=a-26) that filed the proposed rule change consents to the longer period.
    - (B) **Proceedings.—**
      - (i) **Notice and hearing.—** If the [Commission](/usc/15/78c.md?p=a-15) does not approve or disapprove a proposed rule change under [subparagraph (A)](#b-2-A), the [Commission](/usc/15/78c.md?p=a-15) shall provide to the [self-regulatory organization](/usc/15/78c.md?p=a-26) that filed the proposed rule change—
        - (I) notice of the grounds for disapproval under consideration; and
        - (II) opportunity for hearing, to be concluded not later than 180 days after the date of publication of notice of the filing of the proposed rule change.
      - (ii) **Order of approval or disapproval.—**
        - (I) **In general.—** Except as provided in [subclause (II)](#b-2-B-ii-II), not later than 180 days after the date of publication under [paragraph (1)](#b-1), the [Commission](/usc/15/78c.md?p=a-15) shall issue an order approving or disapproving the proposed rule change.
        - (II) **Extension of time period.—** The [Commission](/usc/15/78c.md?p=a-15) may extend the period for issuance under clause (I) by not more than 60 days, if—
          - (aa) the [Commission](/usc/15/78c.md?p=a-15) determines that a longer period is appropriate and publishes the reasons for such determination; or
          - (bb) the [self-regulatory organization](/usc/15/78c.md?p=a-26) that filed the proposed rule change consents to the longer period.
    - (C) **Standards for approval and disapproval.—**
      - (i) **Approval.—** The [Commission](/usc/15/78c.md?p=a-15) shall approve a proposed rule change of a [self-regulatory organization](/usc/15/78c.md?p=a-26) if it finds that such proposed rule change is consistent with the requirements of this chapter and the rules and regulations issued under this chapter that are applicable to such organization.
      - (ii) **Disapproval.—** The [Commission](/usc/15/78c.md?p=a-15) shall disapprove a proposed rule change of a [self-regulatory organization](/usc/15/78c.md?p=a-26) if it does not make a finding described in [clause (i)](#b-2-C-i).
      - (iii) **Time for approval.—** The [Commission](/usc/15/78c.md?p=a-15) may not approve a proposed rule change earlier than 30 days after the date of publication under [paragraph (1)](#b-1), unless the [Commission](/usc/15/78c.md?p=a-15) finds good cause for so doing and publishes the reason for the finding.
    - (D) **Result of failure to institute or conclude proceedings.—** A proposed rule change shall be deemed to have been approved by the [Commission](/usc/15/78c.md?p=a-15), if—
      - (i) the [Commission](/usc/15/78c.md?p=a-15) does not approve or disapprove the proposed rule change or begin proceedings under [subparagraph (B)](#b-2-B) within the period described in [subparagraph (A)](#b-2-A); or
      - (ii) the [Commission](/usc/15/78c.md?p=a-15) does not issue an order approving or disapproving the proposed rule change under [subparagraph (B)](#b-2-B) within the period described in [subparagraph (B)(ii)](#b-2-B-ii).
    - (E) **Publication date based on federal register publishing.—** For purposes of this paragraph, if, after filing a proposed rule change with the [Commission](/usc/15/78c.md?p=a-15) pursuant to [paragraph (1)](#b-1), a [self-regulatory organization](/usc/15/78c.md?p=a-26) publishes a notice of the filing of such proposed rule change, together with the substantive terms of such proposed rule change, on a publicly accessible website, the [Commission](/usc/15/78c.md?p=a-15) shall thereafter send the notice to the Federal Register for publication thereof under [paragraph (1)](#b-1) within 15 days of the date on which such website publication is made. If the [Commission](/usc/15/78c.md?p=a-15) fails to send the notice for publication thereof within such 15 day period, then the date of publication shall be deemed to be the date on which such website publication was made.
    - (F) **Rulemaking.—**
      - (i) **In general.—** Not later than 180 days after July 21, 2010, after consultation with other regulatory agencies, the [Commission](/usc/15/78c.md?p=a-15) shall promulgate rules setting forth the procedural requirements of the proceedings required under this paragraph.
      - (ii) **Notice and comment not required.—** The rules promulgated by the [Commission](/usc/15/78c.md?p=a-15) under [clause (i)](#b-2-F-i) are not required to include republication of proposed rule changes or solicitation of public comment.
  - (3)
    - (A) Notwithstanding the provisions of paragraph (2) of this subsection, a proposed rule change shall take effect upon filing with the [Commission](/usc/15/78c.md?p=a-15) if designated by the [self-regulatory organization](/usc/15/78c.md?p=a-26) as (i) constituting a stated policy, practice, or interpretation with respect to the meaning, [administration](/usc/15/636e.md?p=1), or enforcement of an existing rule of the [self-regulatory organization](/usc/15/78c.md?p=a-26), (ii) establishing or changing a due, fee, or other charge imposed by the [self-regulatory organization](/usc/15/78c.md?p=a-26) on any [person](/usc/15/78c.md?p=a-9), whether or not the [person](/usc/15/78c.md?p=a-9) is a [member](/usc/15/78c.md?p=a-3-A) of the [self-regulatory organization](/usc/15/78c.md?p=a-26), or (iii) concerned solely with the [administration](/usc/15/636e.md?p=1) of the [self-regulatory organization](/usc/15/78c.md?p=a-26) or other matters which the [Commission](/usc/15/78c.md?p=a-15), by rule, consistent with the public interest and the purposes of this subsection, may specify as without the provisions of such [paragraph (2)](#b-2).
    - (B) Notwithstanding any other provision of this subsection, a proposed rule change may be put into effect summarily if it appears to the [Commission](/usc/15/78c.md?p=a-15) that such action is necessary for the protection of investors, the maintenance of fair and orderly markets, or the safeguarding of [securities](/usc/15/78c.md?p=a-10) or funds. Any proposed rule change so put into effect shall be filed promptly thereafter in accordance with the provisions of paragraph (1) of this subsection.
    - (C) Any proposed rule change of a [self-regulatory organization](/usc/15/78c.md?p=a-26) which has taken effect pursuant to subparagraph (A) or (B) of this paragraph may be enforced by such organization to the extent it is not inconsistent with the provisions of this chapter, the rules and regulations thereunder, and applicable Federal and [State](/usc/15/78c.md?p=a-16) law. At any time within the 60-day period beginning on the date of filing of such a proposed rule change in accordance with the provisions of [paragraph (1)](#b-1), the [Commission](/usc/15/78c.md?p=a-15) summarily may temporarily suspend the change in the rules of the [self-regulatory organization](/usc/15/78c.md?p=a-26) made thereby, if it appears to the [Commission](/usc/15/78c.md?p=a-15) that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter. If the [Commission](/usc/15/78c.md?p=a-15) takes such action, the [Commission](/usc/15/78c.md?p=a-15) shall institute proceedings under [paragraph (2)(B)](#b-2-B) to determine whether the proposed rule should be approved or disapproved. [Commission](/usc/15/78c.md?p=a-15) action pursuant to this subparagraph shall not affect the validity or force of the rule change during the period it was in effect and shall not be reviewable under [section 78y of this title](/usc/15/78y.md) nor deemed to be “final agency action” for purposes of [section 704 of title 5](/usc/5/704.md).
  - (4) With respect to a proposed rule change filed by a registered [clearing agency](/usc/15/78c.md?p=a-23-A) for which the [Commission](/usc/15/78c.md?p=a-15) is not the [appropriate regulatory agency](/usc/15/78c.md?p=a-34)—
    - (A) The [Commission](/usc/15/78c.md?p=a-15) shall not approve any such proposed rule change prior to the thirtieth day after the date of publication of notice of the filing whereof unless the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) has notified the [Commission](/usc/15/78c.md?p=a-15) of such [appropriate regulatory agency](/usc/15/78c.md?p=a-34)’s determination that the proposed rule change is consistent with the safeguarding of [securities](/usc/15/78c.md?p=a-10) and funds in the custody or control of such [clearing agency](/usc/15/78c.md?p=a-23-A) or for which it is responsible.
    - (B) The [Commission](/usc/15/78c.md?p=a-15) shall institute proceedings in accordance with paragraph (2)(B) of this subsection to determine whether any such proposed rule change should be disapproved, if the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) notifies the [Commission](/usc/15/78c.md?p=a-15) within thirty days of the date of publication of notice of the filing of the proposed rule change of such [appropriate regulatory agency](/usc/15/78c.md?p=a-34)’s (i) determination that the proposed rule change may be inconsistent with the safeguarding of [securities](/usc/15/78c.md?p=a-10) or funds in the custody or control of such [clearing agency](/usc/15/78c.md?p=a-23-A) or for which it is responsible and (ii) reasons for such determination.
    - (C) The [Commission](/usc/15/78c.md?p=a-15) shall disapprove any such proposed rule change if the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) notifies the [Commission](/usc/15/78c.md?p=a-15) prior to the conclusion of proceedings instituted in accordance with paragraph (2)(B) of this subsection of such [appropriate regulatory agency](/usc/15/78c.md?p=a-34)’s (i) determination that the proposed rule change is inconsistent with the safeguarding of [securities](/usc/15/78c.md?p=a-10) or funds in the custody or control of such [clearing agency](/usc/15/78c.md?p=a-23-A) or for which it is responsible and (ii) reasons for such determination.
    - (D)
      - (i) The [Commission](/usc/15/78c.md?p=a-15) shall order the temporary suspension of any change in the [rules of a clearing agency](/usc/15/78c.md?p=a-27) made by a proposed rule change that has taken effect under [paragraph (3)](#b-3), if the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for the [clearing agency](/usc/15/78c.md?p=a-23-A) notifies the [Commission](/usc/15/78c.md?p=a-15) not later than 30 days after the date on which the proposed rule change was filed of—
        - (I) the determination by the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) that the rules of such [clearing agency](/usc/15/78c.md?p=a-23-A), as so changed, may be inconsistent with the safeguarding of [securities](/usc/15/78c.md?p=a-10) or funds in the custody or control of such [clearing agency](/usc/15/78c.md?p=a-23-A) or for which it is responsible; and
        - (II) the reasons for the determination described in [subclause (I)](#b-4-D-i-I).
      - (ii) If the [Commission](/usc/15/78c.md?p=a-15) takes action under [clause (i)](#b-4-D-i), the [Commission](/usc/15/78c.md?p=a-15) shall institute proceedings under [paragraph (2)(B)](#b-2-B) to determine if the proposed rule change should be approved or disapproved.
  - (5) The [Commission](/usc/15/78c.md?p=a-15) shall consult with and consider the views of the Secretary of the Treasury prior to approving a proposed rule filed by a registered [securities](/usc/15/78c.md?p=a-10) association that primarily concerns conduct related to transactions in [government securities](/usc/15/78c.md?p=a-42), except where the [Commission](/usc/15/78c.md?p=a-15) determines that an emergency exists requiring expeditious or summary action and publishes its reasons therefor. If the Secretary of the Treasury comments in writing to the [Commission](/usc/15/78c.md?p=a-15) on a proposed rule that has been published for comment, the [Commission](/usc/15/78c.md?p=a-15) shall respond in writing to such written comment before approving the proposed rule. If the Secretary of the Treasury determines, and notifies the [Commission](/usc/15/78c.md?p=a-15), that such rule, if implemented, would, or as applied does (i) adversely affect the liquidity or efficiency of the market for [government securities](/usc/15/78c.md?p=a-42); or (ii) impose any burden on competition not necessary or appropriate in furtherance of the purposes of this section, the [Commission](/usc/15/78c.md?p=a-15) shall, prior to adopting the proposed rule, find that such rule is necessary and appropriate in furtherance of the purposes of this section notwithstanding the Secretary’s determination.
  - (6) In approving rules described in [paragraph (5)](#b-5), the [Commission](/usc/15/78c.md?p=a-15) shall consider the sufficiency and appropriateness of then existing laws and rules applicable to [government securities brokers](/usc/15/78c.md?p=a-43), [government securities dealers](/usc/15/78c.md?p=a-44), and [persons](/usc/15/78c.md?p=a-9) associated with [government securities brokers](/usc/15/78c.md?p=a-43) and [government securities dealers](/usc/15/78c.md?p=a-44).
  - (7) **Security futures product rule changes.—**
    - (A) **Filing required.—** A [self-regulatory organization](/usc/15/78c.md?p=a-26) that is an [exchange](/usc/15/78c.md?p=a-1) registered with the [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 78f(g) of this title](/usc/15/78f.md?p=g) or that is a national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(k)](/usc/15/78o–3.md?p=k) of this title shall file with the [Commission](/usc/15/78c.md?p=a-15), in accordance with such rules as the [Commission](/usc/15/78c.md?p=a-15) may prescribe, copies of any proposed rule change or any proposed change in, addition to, or deletion from the rules of such [self-regulatory organization](/usc/15/78c.md?p=a-26) (hereinafter in this paragraph collectively referred to as a “proposed rule change”) that relates 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 [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 such [self-regulatory organization](/usc/15/78c.md?p=a-26)’s obligation to enforce the [securities laws](/usc/15/78c.md?p=a-47). Such proposed rule change shall be accompanied by a concise general statement of the basis and purpose of such proposed rule change. The [Commission](/usc/15/78c.md?p=a-15) shall, upon the filing of any proposed rule change, promptly publish notice thereof together with the terms of substance of the proposed rule change or a description of the subjects and issues involved. The [Commission](/usc/15/78c.md?p=a-15) shall give interested [persons](/usc/15/78c.md?p=a-9) an opportunity to submit data, views, and arguments concerning such proposed rule change.
    - (B) **Filing with cftc.—** A proposed rule change filed with the [Commission](/usc/15/78c.md?p=a-15) pursuant to [subparagraph (A)](#b-7-A) shall be filed concurrently with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15). Such proposed rule change may take effect upon filing of a written certification with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) under [section 7a–2(c) of title 7](/usc/7/7a–2.md?p=c), upon a determination by the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) that review of the proposed rule change is not necessary, or upon approval of the proposed rule change by the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15).
    - (C) **Abrogation of rule changes.—** Any proposed rule change of a [self-regulatory organization](/usc/15/78c.md?p=a-26) that has taken effect pursuant to [subparagraph (B)](#b-7-B) may be enforced by such [self-regulatory organization](/usc/15/78c.md?p=a-26) to the extent such rule is not inconsistent with the provisions of this chapter, the rules and regulations thereunder, and applicable Federal law. At any time within 60 days of the date of the filing of a written certification with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) under [section 7a–2(c) of title 7](/usc/7/7a–2.md?p=c), the date the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) determines that review of such proposed rule change is not necessary, or the date the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) approves such proposed rule change, the [Commission](/usc/15/78c.md?p=a-15), after consultation with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15), may summarily abrogate the proposed rule change and require that the proposed rule change be refiled in accordance with the provisions of [paragraph (1)](#b-1), if it appears to the [Commission](/usc/15/78c.md?p=a-15) that such proposed rule change unduly burdens competition or efficiency, conflicts with the [securities laws](/usc/15/78c.md?p=a-47), or is inconsistent with the public interest and the protection of investors. [Commission](/usc/15/78c.md?p=a-15) action pursuant to the preceding sentence shall not affect the validity or force of the rule change during the period it was in effect and shall not be reviewable under [section 78y of this title](/usc/15/78y.md) nor deemed to be a final agency action for purposes of [section 704 of title 5](/usc/5/704.md).
    - (D) **Review of resubmitted abrogated rules.—**
      - (i) **Proceedings.—** Within 35 days of the date of publication of notice of the filing of a proposed rule change that is abrogated in accordance with [subparagraph (C)](#b-7-C) and refiled in accordance with [paragraph (1)](#b-1), or within such longer period as the [Commission](/usc/15/78c.md?p=a-15) may designate up to 90 days after such date if the [Commission](/usc/15/78c.md?p=a-15) finds such longer period to be appropriate and publishes its reasons for so finding or as to which the [self-regulatory organization](/usc/15/78c.md?p=a-26) consents, the [Commission](/usc/15/78c.md?p=a-15) shall—
        - (I) by order approve such proposed rule change; or
        - (II) after consultation with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15), institute proceedings to determine whether the proposed rule change should be disapproved. Proceedings under [subclause (II)](#b-7-D-i-II) shall include notice of the grounds for disapproval under consideration and opportunity for hearing and be concluded within 180 days after the date of publication of notice of the filing of the proposed rule change. At the conclusion of such proceedings, the [Commission](/usc/15/78c.md?p=a-15), by order, shall approve or disapprove such proposed rule change. The [Commission](/usc/15/78c.md?p=a-15) may extend the time for conclusion of such proceedings for up to 60 days if the [Commission](/usc/15/78c.md?p=a-15) finds good cause for such extension and publishes its reasons for so finding or for such longer period as to which the [self-regulatory organization](/usc/15/78c.md?p=a-26) consents.
      - (ii) **Grounds for approval.—** The [Commission](/usc/15/78c.md?p=a-15) shall approve a proposed rule change of a [self-regulatory organization](/usc/15/78c.md?p=a-26) under this subparagraph if the [Commission](/usc/15/78c.md?p=a-15) finds that such proposed rule change does not unduly burden competition or efficiency, does not conflict with the [securities laws](/usc/15/78c.md?p=a-47), and is not inconsistent with the public interest or the protection of investors. The [Commission](/usc/15/78c.md?p=a-15) shall disapprove such a proposed rule change of a [self-regulatory organization](/usc/15/78c.md?p=a-26) if it does not make such finding. The [Commission](/usc/15/78c.md?p=a-15) shall not approve any proposed rule change prior to the 30th day after the date of publication of notice of the filing thereof, unless the [Commission](/usc/15/78c.md?p=a-15) finds good cause for so doing and publishes its reasons for so finding.
  - (8) **Decimal pricing.—** Not later than 9 months after the date on which trading in any [security futures product](/usc/15/78c.md?p=a-56) commences under this chapter, all [self-regulatory organizations](/usc/15/78c.md?p=a-26) listing or trading [security futures products](/usc/15/78c.md?p=a-56) shall file proposed rule changes necessary to implement decimal pricing of [security futures products](/usc/15/78c.md?p=a-56). The [Commission](/usc/15/78c.md?p=a-15) may not require such rules to contain equal minimum increments in such decimal pricing.
  - (9) **Consultation with cftc.—**
    - (A) **Consultation required.—** The [Commission](/usc/15/78c.md?p=a-15) shall consult with and consider the views of the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) prior to approving or disapproving a proposed rule change filed by a national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title or a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) subject to the provisions of [subsection (a)](#a) that primarily concerns conduct related to transactions in [security futures products](/usc/15/78c.md?p=a-56), except where the [Commission](/usc/15/78c.md?p=a-15) determines that an emergency exists requiring expeditious or summary action and publishes its reasons therefor.
    - (B) **Responses to cftc comments and findings.—** If the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) comments in writing to the [Commission](/usc/15/78c.md?p=a-15) on a proposed rule that has been published for comment, the [Commission](/usc/15/78c.md?p=a-15) shall respond in writing to such written comment before approving or disapproving the proposed rule. If the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) determines, and notifies the [Commission](/usc/15/78c.md?p=a-15), that such rule, if implemented or as applied, would—
      - (i) adversely affect the liquidity or efficiency of the market for [security futures products](/usc/15/78c.md?p=a-56); or
      - (ii) impose any burden on competition not necessary or appropriate in furtherance of the purposes of this section,

      the [Commission](/usc/15/78c.md?p=a-15) shall, prior to approving or disapproving the proposed rule, find that such rule is necessary and appropriate in furtherance of the purposes of this section notwithstanding the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15)’s determination.

  - (10) **1Rule of construction relating to filing date of proposed rule changes.—**
    - (A) **In general.—** For purposes of this subsection, the date of filing of a proposed rule change shall be deemed to be the date on which the [Commission](/usc/15/78c.md?p=a-15) receives the proposed rule change.
    - (B) **Exception.—** A proposed rule change has not been received by the [Commission](/usc/15/78c.md?p=a-15) for purposes of [subparagraph (A)](#b-10-A) if, not later than 7 business days after the date of receipt by the [Commission](/usc/15/78c.md?p=a-15), the [Commission](/usc/15/78c.md?p=a-15) notifies the [self-regulatory organization](/usc/15/78c.md?p=a-26) that such proposed rule change does not comply with the rules of the [Commission](/usc/15/78c.md?p=a-15) relating to the required form of a proposed rule change, except that if the [Commission](/usc/15/78c.md?p=a-15) determines that the proposed rule change is unusually lengthy and is complex or raises novel regulatory issues, the [Commission](/usc/15/78c.md?p=a-15) shall inform the [self-regulatory organization](/usc/15/78c.md?p=a-26) of such determination not later than 7 business days after the date of receipt by the [Commission](/usc/15/78c.md?p=a-15) and, for the purposes of [subparagraph (A)](#b-10-A), a proposed rule change has not been received by the [Commission](/usc/15/78c.md?p=a-15), if, not later than 21 days after the date of receipt by the [Commission](/usc/15/78c.md?p=a-15), the [Commission](/usc/15/78c.md?p=a-15) notifies the [self-regulatory organization](/usc/15/78c.md?p=a-26) that such proposed rule change does not comply with the rules of the [Commission](/usc/15/78c.md?p=a-15) relating to the required form of a proposed rule change.
  - (10) [^1] Notwithstanding [paragraph (2)](#b-2), the time period within which the [Commission](/usc/15/78c.md?p=a-15) is required by order to approve a proposed rule change or institute proceedings to determine whether the proposed rule change should be disapproved is stayed pending a determination by the [Commission](/usc/15/78c.md?p=a-15) upon the request of the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) or its Chairman that the [Commission](/usc/15/78c.md?p=a-15) issue a determination as to whether a product that is the subject of such proposed rule change is a [security](/usc/15/78c.md?p=a-10) pursuant to [section 8306 of this title](/usc/15/8306.md).
- (c) **Amendment by Commission of rules of self-regulatory organizations—** The [Commission](/usc/15/78c.md?p=a-15), by rule, may abrogate, add to, and delete from (hereinafter in this subsection collectively referred to as “amend”) the [rules of a self-regulatory organization](/usc/15/78c.md?p=a-28) (other than a registered [clearing agency](/usc/15/78c.md?p=a-23-A)) as the [Commission](/usc/15/78c.md?p=a-15) deems necessary or appropriate to insure the fair [administration](/usc/15/636e.md?p=1) of the [self-regulatory organization](/usc/15/78c.md?p=a-26), to conform its rules to requirements of this chapter and the rules and regulations thereunder applicable to such organization, or otherwise in furtherance of the purposes of this chapter, in the following manner:
  - (1) The [Commission](/usc/15/78c.md?p=a-15) shall notify the [self-regulatory organization](/usc/15/78c.md?p=a-26) and publish notice of the proposed rulemaking in the Federal Register. The notice shall include the text of the proposed amendment to the rules of the [self-regulatory organization](/usc/15/78c.md?p=a-26) and a statement of the [Commission](/usc/15/78c.md?p=a-15)’s reasons, including any pertinent facts, for commencing such proposed rulemaking.
  - (2) The [Commission](/usc/15/78c.md?p=a-15) shall give interested [persons](/usc/15/78c.md?p=a-9) an opportunity for the oral presentation of data, views, and arguments, in addition to an opportunity to make written submissions. A transcript shall be kept of any oral presentation.
  - (3) A rule adopted pursuant to this subsection shall incorporate the text of the amendment to the rules of the [self-regulatory organization](/usc/15/78c.md?p=a-26) and a statement of the [Commission](/usc/15/78c.md?p=a-15)’s basis for and purpose in so amending such rules. This statement shall include an identification of any facts on which the [Commission](/usc/15/78c.md?p=a-15) considers its determination so to amend the rules of the self-regulatory agency to be based, including the reasons for the [Commission](/usc/15/78c.md?p=a-15)’s conclusions as to any of such facts which were disputed in the rulemaking.
  - (4)
    - (A) Except as provided in paragraphs (1) through (3) of this subsection, rulemaking under this subsection shall be in accordance with the procedures specified in [section 553 of title 5](/usc/5/553.md) for rulemaking not on the record.
    - (B) Nothing in this subsection shall be construed to impair or limit the [Commission](/usc/15/78c.md?p=a-15)’s power to make, or to modify or alter the procedures the [Commission](/usc/15/78c.md?p=a-15) may follow in making, rules and regulations pursuant to any other authority under this chapter.
    - (C) Any amendment to the [rules of a self-regulatory organization](/usc/15/78c.md?p=a-28) made by the [Commission](/usc/15/78c.md?p=a-15) pursuant to this subsection shall be considered for all purposes of this chapter to be part of the rules of such [self-regulatory organization](/usc/15/78c.md?p=a-26) and shall not be considered to be a rule of the [Commission](/usc/15/78c.md?p=a-15).
  - (5) With respect to rules described in [subsection (b)(5)](#b-5), the [Commission](/usc/15/78c.md?p=a-15) shall consult with and consider the views of the Secretary of the Treasury before abrogating, adding to, and deleting from such rules, except where the [Commission](/usc/15/78c.md?p=a-15) determines that an emergency exists requiring expeditious or summary action and publishes its reasons therefor.
- (d) **Notice of disciplinary action taken by self-regulatory organization against a member or participant; review of action by appropriate regulatory agency; procedure—**
  - (1) If any [self-regulatory organization](/usc/15/78c.md?p=a-26) imposes any final disciplinary sanction on any [member](/usc/15/78c.md?p=a-3-A) thereof or [participant](/usc/15/78c.md?p=a-24) therein, denies membership or participation to any [applicant](/usc/15/7a.md?p=3), or prohibits or limits any [person](/usc/15/78c.md?p=a-9) in respect to access to services offered by such organization or [member](/usc/15/78c.md?p=a-3-A) thereof or if any [self-regulatory organization](/usc/15/78c.md?p=a-26) (other than a registered [clearing agency](/usc/15/78c.md?p=a-23-A)) imposes any final disciplinary sanction on any [person associated with a member](/usc/15/78c.md?p=a-21) or bars any [person](/usc/15/78c.md?p=a-9) from becoming associated with a [member](/usc/15/78c.md?p=a-3-A), the [self-regulatory organization](/usc/15/78c.md?p=a-26) shall promptly file notice thereof with the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for the [self-regulatory organization](/usc/15/78c.md?p=a-26) and (if other than the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for the [self-regulatory organization](/usc/15/78c.md?p=a-26)) the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [member](/usc/15/78c.md?p=a-3-A), [participant](/usc/15/78c.md?p=a-24), [applicant](/usc/15/7a.md?p=3), or other [person](/usc/15/78c.md?p=a-9). The notice shall be in such form and contain such information as the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for the [self-regulatory organization](/usc/15/78c.md?p=a-26), by rule, may prescribe as necessary or appropriate in furtherance of the purposes of this chapter.
  - (2) Any action with respect to which a [self-regulatory organization](/usc/15/78c.md?p=a-26) is required by paragraph (1) of this subsection to file notice shall be subject to review by the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [member](/usc/15/78c.md?p=a-3-A), [participant](/usc/15/78c.md?p=a-24), [applicant](/usc/15/7a.md?p=3), or other [person](/usc/15/78c.md?p=a-9), on its own motion, or upon application by any [person](/usc/15/78c.md?p=a-9) aggrieved thereby filed within thirty days after the date such notice was filed with such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) and received by such aggrieved [person](/usc/15/78c.md?p=a-9), or within such longer period as such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) may determine. Application to such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for review, or the institution of review by such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) on its own motion, shall not operate as a stay of such action unless such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) otherwise orders, summarily or after notice and opportunity for hearing on the question of a stay (which hearing may consist solely of the submission of affidavits or presentation of oral arguments). Each [appropriate regulatory agency](/usc/15/78c.md?p=a-34) shall establish for appropriate cases an expedited procedure for consideration and determination of the question of a stay.
  - (3) The provisions of this subsection shall apply to an [exchange](/usc/15/78c.md?p=a-1) registered pursuant to [section 78f(g) of this title](/usc/15/78f.md?p=g) or a national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(k)](/usc/15/78o–3.md?p=k) of this title only to the extent that such [exchange](/usc/15/78c.md?p=a-1) or association imposes any final disciplinary sanction for—
    - (A) a violation of the Federal [securities laws](/usc/15/78c.md?p=a-47) or the rules and regulations thereunder; or
    - (B) a violation of a rule of such [exchange](/usc/15/78c.md?p=a-1) or association, as to which a proposed change would be required to be filed under this section, except that, to the extent that the [exchange](/usc/15/78c.md?p=a-1) or association rule violation relates to any account, [agreement](/usc/15/7a.md?p=2), contract, or transaction, this subsection shall apply only to the extent such violation involves a [security futures product](/usc/15/78c.md?p=a-56).
- (e) **Disposition of review; cancellation, reduction, or remission of sanction—**
  - (1) In any proceeding to review a final disciplinary sanction imposed by a [self-regulatory organization](/usc/15/78c.md?p=a-26) on a [member](/usc/15/78c.md?p=a-3-A) thereof or [participant](/usc/15/78c.md?p=a-24) therein or a [person associated with](/usc/15/78c.md?p=a-63) such a [member](/usc/15/78c.md?p=a-3-A), after notice and opportunity for hearing (which hearing may consist solely of consideration of the record before the [self-regulatory organization](/usc/15/78c.md?p=a-26) and opportunity for the presentation of supporting reasons to affirm, modify, or set aside the sanction)—
    - (A) if the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [member](/usc/15/78c.md?p=a-3-A), [participant](/usc/15/78c.md?p=a-24), or [person associated with a member](/usc/15/78c.md?p=a-21) finds that such [member](/usc/15/78c.md?p=a-3-A), [participant](/usc/15/78c.md?p=a-24), or [person associated with a member](/usc/15/78c.md?p=a-21) has engaged in such acts or practices, or has omitted such acts, as the [self-regulatory organization](/usc/15/78c.md?p=a-26) has found him to have engaged in or omitted, that such acts or practices, or omissions to act, are in violation of such provisions of this chapter, the rules or regulations thereunder, the rules of the [self-regulatory organization](/usc/15/78c.md?p=a-26), or, in the case of a registered [securities](/usc/15/78c.md?p=a-10) association, the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) as have been specified in the determination of the [self-regulatory organization](/usc/15/78c.md?p=a-26), and that such provisions are, and were applied in a manner, consistent with the purposes of this chapter, such [appropriate regulatory agency](/usc/15/78c.md?p=a-34), by order, shall so declare and, as appropriate, affirm the sanction imposed by the [self-regulatory organization](/usc/15/78c.md?p=a-26), modify the sanction in accordance with paragraph (2) of this subsection, or remand to the [self-regulatory organization](/usc/15/78c.md?p=a-26) for further proceedings; or
    - (B) if such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) does not make any such finding it shall, by order, set aside the sanction imposed by the [self-regulatory organization](/usc/15/78c.md?p=a-26) and, if appropriate, remand to the [self-regulatory organization](/usc/15/78c.md?p=a-26) for further proceedings.
  - (2) If the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for a [member](/usc/15/78c.md?p=a-3-A), [participant](/usc/15/78c.md?p=a-24), or [person associated with a member](/usc/15/78c.md?p=a-21), having due regard for the public interest and the protection of investors, finds after a proceeding in accordance with paragraph (1) of this subsection that a sanction imposed by a [self-regulatory organization](/usc/15/78c.md?p=a-26) upon such [member](/usc/15/78c.md?p=a-3-A), [participant](/usc/15/78c.md?p=a-24), or [person associated with a member](/usc/15/78c.md?p=a-21) imposes any burden on competition not necessary or appropriate in furtherance of the purposes of this chapter or is excessive or oppressive, the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) may cancel, reduce, or require the remission of such sanction.
- (f) **Dismissal of review proceeding—** In any proceeding to review the denial of membership or participation in a [self-regulatory organization](/usc/15/78c.md?p=a-26) to any [applicant](/usc/15/7a.md?p=3), 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) of a [self-regulatory organization](/usc/15/78c.md?p=a-26), or the prohibition or limitation by a [self-regulatory organization](/usc/15/78c.md?p=a-26) of any [person](/usc/15/78c.md?p=a-9) with respect to access to services offered by the [self-regulatory organization](/usc/15/78c.md?p=a-26) or any [member](/usc/15/78c.md?p=a-3-A) thereof, if the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [applicant](/usc/15/7a.md?p=3) or [person](/usc/15/78c.md?p=a-9), after notice and opportunity for hearing (which hearing may consist solely of consideration of the record before the [self-regulatory organization](/usc/15/78c.md?p=a-26) and opportunity for the presentation of supporting reasons to dismiss the proceeding or set aside the action of the [self-regulatory organization](/usc/15/78c.md?p=a-26)) finds that the specific grounds on which such denial, bar, or prohibition or limitation is based exist in fact, that such denial, bar, or prohibition or limitation is in accordance with the rules of the [self-regulatory organization](/usc/15/78c.md?p=a-26), and that such rules are, and were applied in a manner, consistent with the purposes of this chapter, such [appropriate regulatory agency](/usc/15/78c.md?p=a-34), by order, shall dismiss the proceeding. If such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) does not make any such finding or if it finds that such denial, bar, or prohibition or limitation imposes any burden on competition not necessary or appropriate in furtherance of the purposes of this chapter, such [appropriate regulatory agency](/usc/15/78c.md?p=a-34), by order, shall set aside the action of the [self-regulatory organization](/usc/15/78c.md?p=a-26) and require it to admit such [applicant](/usc/15/7a.md?p=3) to membership or participation, permit such [person](/usc/15/78c.md?p=a-9) to become associated with a [member](/usc/15/78c.md?p=a-3-A), or grant such [person](/usc/15/78c.md?p=a-9) access to services offered by the [self-regulatory organization](/usc/15/78c.md?p=a-26) or [member](/usc/15/78c.md?p=a-3-A) thereof.
- (g) **Compliance with rules and regulations—**
  - (1) Every [self-regulatory organization](/usc/15/78c.md?p=a-26) shall comply with the provisions of this chapter, the rules and regulations thereunder, and its own rules, and (subject to the provisions of [section 78q(d) of this title](/usc/15/78q.md?p=d), paragraph (2) of this subsection, and the rules thereunder) absent reasonable justification or excuse enforce compliance—
    - (A) in the case of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1), with such provisions 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);
    - (B) in the case of a registered [securities](/usc/15/78c.md?p=a-10) association, with such provisions and the provisions of the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) 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); and
    - (C) in the case of a registered [clearing agency](/usc/15/78c.md?p=a-23-A), with its own rules by its [participants](/usc/15/78c.md?p=a-24).
  - (2) The [Commission](/usc/15/78c.md?p=a-15), by rule, consistent with the public interest, the protection of investors, and the other purposes of this chapter, may relieve any [self-regulatory organization](/usc/15/78c.md?p=a-26) of any responsibility under this chapter to enforce compliance with any specified provision of this chapter or the rules or regulations thereunder by any [member](/usc/15/78c.md?p=a-3-A) of such organization or [person associated with](/usc/15/78c.md?p=a-63) such a [member](/usc/15/78c.md?p=a-3-A), or any class of such [members](/usc/15/78c.md?p=a-3-A) or [persons](/usc/15/78c.md?p=a-9) associated with a [member](/usc/15/78c.md?p=a-3-A).
- (h) **Suspension or revocation of self-regulatory organization’s registration; censure; other sanctions—**
  - (1) The [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for a [self-regulatory organization](/usc/15/78c.md?p=a-26) is authorized, by order, if in its opinion such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter, to suspend for a period not exceeding twelve months or revoke the registration of such [self-regulatory organization](/usc/15/78c.md?p=a-26), or to censure or impose limitations upon the activities, functions, and operations of such [self-regulatory organization](/usc/15/78c.md?p=a-26), if such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) finds, on the record after notice and opportunity for hearing, that such [self-regulatory organization](/usc/15/78c.md?p=a-26) has violated or is unable to comply with any provision of this chapter, the rules or regulations thereunder, or its own rules or without reasonable justification or excuse has failed to enforce compliance—
    - (A) in the case of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1), with any such provision by a [member](/usc/15/78c.md?p=a-3-A) thereof or a [person associated with a member](/usc/15/78c.md?p=a-21) thereof;
    - (B) in the case of a registered [securities](/usc/15/78c.md?p=a-10) association, with any such provision or any provision of the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) by a [member](/usc/15/78c.md?p=a-3-A) thereof or a [person associated with a member](/usc/15/78c.md?p=a-21) thereof; or
    - (C) in the case of a registered [clearing agency](/usc/15/78c.md?p=a-23-A), with any provision of its own rules by a [participant](/usc/15/78c.md?p=a-24) therein.
  - (2) The [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for a [self-regulatory organization](/usc/15/78c.md?p=a-26) is authorized, by order, if in its opinion such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter, to suspend for a period not exceeding twelve months or expel from such [self-regulatory organization](/usc/15/78c.md?p=a-26) any [member](/usc/15/78c.md?p=a-3-A) thereof or [participant](/usc/15/78c.md?p=a-24) therein, if such [member](/usc/15/78c.md?p=a-3-A) or [participant](/usc/15/78c.md?p=a-24) is subject to an order of the [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 78o(b)(4)](/usc/15/78o.md?p=b-4) of this title or if such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) finds, on the record after notice and opportunity for hearing, that such [member](/usc/15/78c.md?p=a-3-A) or [participant](/usc/15/78c.md?p=a-24) has willfully violated or has effected any transaction for any other [person](/usc/15/78c.md?p=a-9) who, such [member](/usc/15/78c.md?p=a-3-A) or [participant](/usc/15/78c.md?p=a-24) had reason to believe, was violating with respect to such transaction—
    - (A) in the case of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1), any provision of the Securities Act of 1933 [[15 U.S.C. 77a](/usc/15/77a.md) et seq.], the Investment Advisers Act of 1940 [[15 U.S.C. 80b–1](/usc/15/80b–1.md) et seq.], the Investment Company Act of 1940 [[15 U.S.C. 80a–1](/usc/15/80a–1.md) et seq.], this chapter, or the rules or regulations under any of such statutes;
    - (B) in the case of a registered [securities](/usc/15/78c.md?p=a-10) association, any provision of the Securities Act of 1933, the Investment Advisers Act of 1940, the Investment Company Act of 1940, this chapter, the rules or regulations under any of such statutes, or the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73); or
    - (C) in the case of a registered [clearing agency](/usc/15/78c.md?p=a-23-A), any provision of the rules of the [clearing agency](/usc/15/78c.md?p=a-23-A).
  - (3) The [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or registered [securities](/usc/15/78c.md?p=a-10) association is authorized, by order, if in its opinion such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter, to suspend for a period not exceeding twelve months or to bar any [person](/usc/15/78c.md?p=a-9) from being associated with a [member](/usc/15/78c.md?p=a-3-A) of such national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or registered [securities](/usc/15/78c.md?p=a-10) association, if such [person](/usc/15/78c.md?p=a-9) is subject to an order of the [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 78o(b)(6)](/usc/15/78o.md?p=b-6) of this title or if such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) finds, on the record after notice and opportunity for hearing, that such [person](/usc/15/78c.md?p=a-9) has willfully violated or has effected any transaction for any other [person](/usc/15/78c.md?p=a-9) who, such [person associated with a member](/usc/15/78c.md?p=a-21) had reason to believe, was violating with respect to such transaction—
    - (A) in the case of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1), any provision of the Securities Act of 1933, the Investment Advisers Act of 1940, the Investment Company Act of 1940, this chapter, or the rules or regulations under any of such statutes; or
    - (B) in the case of a registered [securities](/usc/15/78c.md?p=a-10) association, any provision of the Securities Act of 1933, the Investment Advisers Act of 1940, the Investment Company Act of 1940, this chapter, the rules or regulations under any of the statutes, or the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73).
  - (4) The [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for a [self-regulatory organization](/usc/15/78c.md?p=a-26) is authorized, by order, if in its opinion such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter, to remove from office or censure any [person](/usc/15/78c.md?p=a-9) who is, or at the time of the alleged misconduct was, an officer or [director](/usc/15/78c.md?p=a-7) of such [self-regulatory organization](/usc/15/78c.md?p=a-26), if such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) finds, on the record after notice and opportunity for hearing, that such [person](/usc/15/78c.md?p=a-9) has willfully violated any provision of this chapter, the rules or regulations thereunder, or the rules of such [self-regulatory organization](/usc/15/78c.md?p=a-26), willfully abused his authority, or without reasonable justification or excuse has failed to enforce compliance—
    - (A) in the case of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1), with any such provision by any [member](/usc/15/78c.md?p=a-3-A) or [person associated with a member](/usc/15/78c.md?p=a-21);
    - (B) in the case of a registered [securities](/usc/15/78c.md?p=a-10) association, with any such provision or any provision of the rules of the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) by any [member](/usc/15/78c.md?p=a-3-A) or [person associated with a member](/usc/15/78c.md?p=a-21); or
    - (C) in the case of a registered [clearing agency](/usc/15/78c.md?p=a-23-A), with any provision of the rules of the [clearing agency](/usc/15/78c.md?p=a-23-A) by any [participant](/usc/15/78c.md?p=a-24).
- (i) **Appointment of trustee—** If a proceeding under [subsection (h)(1)](#h-1) of this section results in the suspension or revocation of the registration of a [clearing agency](/usc/15/78c.md?p=a-23-A), the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) may, upon notice to such [clearing agency](/usc/15/78c.md?p=a-23-A), apply to any court of competent jurisdiction specified in section [78u(d)](/usc/15/78u.md?p=d) or [78aa](/usc/15/78aa.md) of this title for the appointment of a trustee. In the event of such an application, the court may, to the extent it deems necessary or appropriate, take exclusive jurisdiction of such [clearing agency](/usc/15/78c.md?p=a-23-A) and the [records](/usc/15/78c.md?p=a-37) and assets thereof, wherever located; and the court shall appoint the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [clearing agency](/usc/15/78c.md?p=a-23-A) or a [person](/usc/15/78c.md?p=a-9) designated by such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) as trustee with power to take possession and continue to operate or terminate the operations of such [clearing agency](/usc/15/78c.md?p=a-23-A) in an orderly manner for the protection of [participants](/usc/15/78c.md?p=a-24) and investors, subject to such terms and conditions as the court may prescribe.

## Footnotes

[^1]: So in original. Two pars. (10) have been enacted.

## Source credit

(June 6, 1934, ch. 404, title I, § 19, 48 Stat. 898; Pub. L. 87–196, Sept. 5, 1961, 75 Stat. 465; Pub. L. 87–561, July 27, 1962, 76 Stat. 247; Pub. L. 90–438, July 29, 1968, 82 Stat. 453; Pub. L. 91–94, Oct. 20, 1969, 83 Stat. 141; Pub. L. 91–410, Sept. 25, 1970, 84 Stat. 862; Pub. L. 94–29, § 16, June 4, 1975, 89 Stat. 146; Pub. L. 103–202, title I, § 106(c), Dec. 17, 1993, 107 Stat. 2350; Pub. L. 105–353, title III, § 301(b)(11), Nov. 3, 1998, 112 Stat. 3236; Pub. L. 106–554, § 1(a)(5) [title II, § 202(b), (c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–418, 2763A–421; Pub. L. 111–203, title VII, § 717(c), title IX, §§ 916, 929F(e), July 21, 2010, 124 Stat. 1652, 1833, 1854.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsecs. (a)(1), (b)(2)(C)(i), (3)(C), (7)(C), (8), (c), (d)(1), (e)(1)(A), (2), (f), (g), and (h), was in the original “this title”. See References in Text note set out under section 78a of this title.

The Securities Act of 1933, referred to in subsec. (h), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, which is classified generally to subchapter I (§ 77a et seq.) of chapter 2A of this title. For complete classification of this Act to the Code, see section 77a of this title and Tables.

The Investment Advisers Act of 1940, referred to in subsec. (h), is title II of act Aug. 22, 1940, ch. 686, 54 Stat. 847, which is classified generally to subchapter II (§ 80b–1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see section 80b–20 of this title and Tables.

The Investment Company Act of 1940, referred to in subsec. (h), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, which is classified generally to subchapter I (§ 80a–1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see section 80a–51 of this title and Tables.

### Amendments

2010—Subsec. (b)(1). Pub. L. 111–203, § 916(b)(2), substituted “as soon as practicable after the date of the filing” for “upon the filing”.

Subsec. (b)(2). Pub. L. 111–203, § 916(a), added par. (2) and struck out former par. (2) which related to approval of rule change or institution of proceedings regarding disapproval of such change within thirty-five days of publication of notice or within such longer period as the Commission may designate up to ninety days of such date.

Subsec. (b)(3)(A). Pub. L. 111–203, § 916(c)(1), substituted “shall take effect” for “may take effect” and inserted “on any person, whether or not the person is a member of the self-regulatory organization” after “charge imposed by the self-regulatory organization”.

Subsec. (b)(3)(C). Pub. L. 111–203, § 916(c)(2), substituted second sentence for former second sentence which read as follows: “At any time within sixty days of the date of filing of such a proposed rule change in accordance with the provisions of paragraph (1) of this subsection, the Commission summarily may abrogate the change in the rules of the self-regulatory organization made thereby and require that the proposed rule change be refiled in accordance with the provisions of paragraph (1) of this subsection and reviewed in accordance with the provisions of paragraph (2) of this subsection, if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter.”, added third sentence, and substituted “this subparagraph” for “the preceding sentence” in last sentence.

Subsec. (b)(4)(D). Pub. L. 111–203, § 916(d), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “The Commission shall abrogate any change in the rules of such a clearing agency made by a proposed rule change which has taken effect pursuant to paragraph (3) of this subsection, require that the proposed rule change be refiled in accordance with the provisions of paragraph (1) of this subsection, and reviewed in accordance with the provisions of paragraph (2) of this subsection, if the appropriate regulatory agency for such clearing agency notifies the Commission within thirty days of the date of filing of such proposed rule change of such appropriate regulatory agency’s (i) determination that the rules of such clearing agency as so changed may be inconsistent with the safeguarding of securities or funds in the custody or control of such clearing agency or for which it is responsible and (ii) reasons for such determination.”

Subsec. (b)(10). Pub. L. 111–203, § 916(b)(1), added par. (10) relating to rule of construction relating to filing date of proposed rule changes.

Pub. L. 111–203, § 717(c), added par. (10) relating to stay pending determination whether product is a security pursuant to section 8306 of this title.

Subsec. (h)(4). Pub. L. 111–203, § 929F(e), in introductory provisions, substituted “any person who is, or at the time of the alleged misconduct was, an officer or director” for “any officer or director” and “such person” for “such officer or director”.

2000—Subsec. (b)(7). Pub. L. 106–554, § 1(a)(5) [title II, § 202(b)(1)], added par. (7).

Subsec. (b)(8). Pub. L. 106–554, § 1(a)(5) [title II, § 202(b)(2)], added par. (8).

Subsec. (b)(9). Pub. L. 106–554, § 1(a)(5) [title II, § 202(b)(3)], added par. (9).

Subsec. (d)(3). Pub. L. 106–554, § 1(a)(5) [title II, § 202(c)], added par. (3).

1998—Subsec. (c)(5). Pub. L. 105–353 realigned margins.

1993—Subsec. (b)(5), (6). Pub. L. 103–202, § 106(c)(1), added pars. (5) and (6).

Subsec. (c)(5). Pub. L. 103–202, § 106(c)(2), added par. (5).

1975—Pub. L. 94–29 amended section generally, substituting provisions covering the registration, responsibilities, and oversight of self-regulatory organizations by the Commission for provisions covering only the Commission’s powers with respect to exchanges and securities, with a view to consolidating and expanding the Commission’s oversight powers with respect to self-regulatory organizations, their members, participants, and officers, and with a view to giving the Commission identical powers over all self-regulatory organizations, including registered clearing agencies, and substantially strengthening the Commission’s ability to assure that these organizations carry out their statutory responsibilities.

1970—Subsec. (e)(1). Pub. L. 91–410 substituted “December 31, 1970” for “September 1, 1970”.

1969—Subsec. (e). Pub. L. 91–94 substituted “September 1, 1970” for “September 1, 1969” in par. (1), and “$945,000” for “$875,000” in par. (4).

1968—Subsec. (e). Pub. L. 90–438 added subsec. (e).

1962—Subsec. (d). Pub. L. 87–561 substituted “April 3, 1963” for “January 3, 1963” and “$950,000” for “$750,000”.

1961—Subsec. (d). Pub. L. 87–196 added subsec. (d).

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by sections 916 and 929F(e) 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 717(c) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§ 711–754) 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 A, see section 754 of Pub. L. 111–203, set out as a note under section 1a of Title 7, Agriculture.

### Effective Date of 1975 Amendment

Amendment by Pub. L. 94–29 effective June 4, 1975, except for amendment of subsec. (g) by Pub. L. 94–29 which is 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.

### Construction of 1993 Amendment

Amendment by 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.

### Review of Regulatory Structures and Procedures With Respect to Penny Stocks; Report

Pub. L. 101–429, title V, § 510, Oct. 15, 1990, 104 Stat. 957, directed Comptroller General, in consultation with Securities and Exchange Commission, to conduct a review of rules, procedures, facilities, and oversight and enforcement activities of self-regulatory organizations under Securities Exchange Act of 1934, with respect to penny stocks (within the meaning of 15 U.S.C. 78c(a)(51)), and, within one year after Oct. 15, 1990, to submit a report on the review including a statement of findings and such recommendations as the Comptroller General considered appropriate with respect to legislative or administrative changes.

### 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.