15 USC 78m - Periodical and other reports

U.S Code last checked for updates: Nov 22, 2024

§ 78m.

Periodical and other reports

(a)

Reports by issuer of security; contents

Every issuer of a security registered pursuant to section 78l of this title shall file with the Commission, in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate for the proper protection of investors and to insure fair dealing in the security—

(1)

such information and documents (and such copies thereof) as the Commission shall require to keep reasonably current the information and documents required to be included in or filed with an application or registration statement filed pursuant to section 78l of this title, except that the Commission may not require the filing of any material contract wholly executed before July 1, 1962.

(2)

such annual reports (and such copies thereof), certified if required by the rules and regulations of the Commission by independent public accountants, and such quarterly reports (and such copies thereof), as the Commission may prescribe.

Every issuer of a security registered on a national securities exchange shall also file a duplicate original of such information, documents, and reports with the exchange. In any registration statement, periodic report, or other reports to be filed with the Commission, an emerging growth company need not present selected financial data in accordance with section 229.301 of title 17, Code of Federal Regulations, for any period prior to the earliest audited period presented in connection with its first registration statement that became effective under this chapter or the Securities Act of 1933 [15 U.S.C. 77a et seq.] and, with respect to any such statement or reports, an emerging growth company may not be required to comply with any new or revised financial accounting standard until such date that a company that is not an issuer (as defined under section 7201 of this title) is required to comply with such new or revised accounting standard, if such standard applies to companies that are not issuers.

(b)

Form of report; books, records, and internal accounting; directives

(1)

The Commission may prescribe, in regard to reports made pursuant to this chapter, the form or forms in which the required information shall be set forth, the items or details to be shown in the balance sheet and the earnings statement, and the methods to be followed in the preparation of reports, in the appraisal or valuation of assets and liabilities, in the determination of depreciation and depletion, in the differentiation of recurring and nonrecurring income, in the differentiation of investment and operating income, and in the preparation, where the Commission deems it necessary or desirable, of separate and/or consolidated balance sheets or income accounts of any person directly or indirectly controlling or controlled by the issuer, or any person under direct or indirect common control with the issuer; but in the case of the reports of any person whose methods of accounting are prescribed under the provisions of any law of the United States, or any rule or regulation thereunder, the rules and regulations of the Commission with respect to reports shall not be inconsistent with the requirements imposed by such law or rule or regulation in respect of the same subject matter (except that such rules and regulations of the Commission may be inconsistent with such requirements to the extent that the Commission determines that the public interest or the protection of investors so requires).

(2)

Every issuer which has a class of securities registered pursuant to section 78l of this title and every issuer which is required to file reports pursuant to section 78o(d) of this title shall—

(A)

make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

(B)

devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that—

(i)

transactions are executed in accordance with management’s general or specific authorization;

(ii)

transactions are recorded as necessary (I) to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and (II) to maintain accountability for assets;

(iii)

access to assets is permitted only in accordance with management’s general or specific authorization; and

(iv)

the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and

(C)

notwithstanding any other provision of law, pay the allocable share of such issuer of a reasonable annual accounting support fee or fees, determined in accordance with section 7219 of this title.

(3)

(A)

With respect to matters concerning the national security of the United States, no duty or liability under paragraph (2) of this subsection shall be imposed upon any person acting in cooperation with the head of any Federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done upon the specific, written directive of the head of such department or agency pursuant to Presidential authority to issue such directives. Each directive issued under this paragraph shall set forth the specific facts and circumstances with respect to which the provisions of this paragraph are to be invoked. Each such directive shall, unless renewed in writing, expire one year after the date of issuance.

(B)

Each head of a Federal department or agency of the United States who issues a directive pursuant to this paragraph shall maintain a complete file of all such directives and shall, on October 1 of each year, transmit a summary of matters covered by such directives in force at any time during the previous year to the Permanent Select Committee on Intelligence of the House of Representatives and the Select Committee on Intelligence of the Senate.

(4)

No criminal liability shall be imposed for failing to comply with the requirements of paragraph (2) of this subsection except as provided in paragraph (5) of this subsection.

(5)

No person shall knowingly circumvent or knowingly fail to implement a system of internal accounting controls or knowingly falsify any book, record, or account described in paragraph (2).

(6)

Where an issuer which has a class of securities registered pursuant to section 78l of this title or an issuer which is required to file reports pursuant to section 78o(d) of this title holds 50 per centum or less of the voting power with respect to a domestic or foreign firm, the provisions of paragraph (2) require only that the issuer proceed in good faith to use its influence, to the extent reasonable under the issuer’s circumstances, to cause such domestic or foreign firm to devise and maintain a system of internal accounting controls consistent with paragraph (2). Such circumstances include the relative degree of the issuer’s ownership of the domestic or foreign firm and the laws and practices governing the business operations of the country in which such firm is located. An issuer which demonstrates good faith efforts to use such influence shall be conclusively presumed to have complied with the requirements of paragraph (2).

(7)

For the purpose of paragraph (2) of this subsection, the terms “reasonable assurances” and “reasonable detail” mean such level of detail and degree of assurance as would satisfy prudent officials in the conduct of their own affairs.

(c)

Alternative reports

(d)

Reports by persons acquiring more than five per centum of certain classes of securities

(1)

Any person who, after acquiring directly or indirectly the beneficial ownership of any equity security of a class which is registered pursuant to section 78l of this title, or any equity security of an insurance company which would have been required to be so registered except for the exemption contained in section 78l(g)(2)(G) of this title, or any equity security issued by a closed-end investment company registered under the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.] or any equity security issued by a Native Corporation pursuant to section 1629c(d)(6) of title 43, or otherwise becomes or is deemed to become a beneficial owner of any of the foregoing upon the purchase or sale of a security-based swap that the Commission may define by rule, and is directly or indirectly the beneficial owner of more than 5 per centum of such class shall, within ten days after such acquisition or within such shorter time as the Commission may establish by rule, file with the Commission, a statement containing such of the following information, and such additional information, as the Commission may by rules and regulations, prescribe as necessary or appropriate in the public interest or for the protection of investors—

(A)

the background, and identity, residence, and citizenship of, and the nature of such beneficial ownership by, such person and all other persons by whom or on whose behalf the purchases have been or are to be effected;

(B)

the source and amount of the funds or other consideration used or to be used in making the purchases, and if any part of the purchase price is represented or is to be represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, or trading such security, a description of the transaction and the names of the parties thereto, except that where a source of funds is a loan made in the ordinary course of business by a bank, as defined in section 78c(a)(6) of this title, if the person filing such statement so requests, the name of the bank shall not be made available to the public;

(C)

if the purpose of the purchases or prospective purchases is to acquire control of the business of the issuer of the securities, any plans or proposals which such persons may have to liquidate such issuer, to sell its assets to or merge it with any other persons, or to make any other major change in its business or corporate structure;

(D)

the number of shares of such security which are beneficially owned, and the number of shares concerning which there is a right to acquire, directly or indirectly, by (i) such person, and (ii) by each associate of such person, giving the background, identity, residence, and citizenship of each such associate; and

(E)

information as to any contracts, arrangements, or understandings with any person with respect to any securities of the issuer, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or guaranties of profits, division of losses or profits, or the giving or withholding of proxies, naming the persons with whom such contracts, arrangements, or understandings have been entered into, and giving the details thereof.

(2)

If any material change occurs in the facts set forth in the statement filed with the Commission, an amendment shall be filed with the Commission, in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.

(3)

When two or more persons act as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of an issuer, such syndicate or group shall be deemed a “person” for the purposes of this subsection.

(4)

In determining, for purposes of this subsection, any percentage of a class of any security, such class shall be deemed to consist of the amount of the outstanding securities of such class, exclusive of any securities of such class held by or for the account of the issuer or a subsidiary of the issuer.

(5)

The Commission, by rule or regulation or by order, may permit any person to file in lieu of the statement required by paragraph (1) of this subsection or the rules and regulations thereunder, a notice stating the name of such person, the number of shares of any equity securities subject to paragraph (1) which are owned by him, the date of their acquisition and such other information as the Commission may specify, if it appears to the Commission that such securities were acquired by such person in the ordinary course of his business and were not acquired for the purpose of and do not have the effect of changing or influencing the control of the issuer nor in connection with or as a participant in any transaction having such purpose or effect.

(6)

The provisions of this subsection shall not apply to—

(A)

any acquisition or offer to acquire securities made or proposed to be made by means of a registration statement under the Securities Act of 1933 [15 U.S.C. 77a et seq.];

(B)

any acquisition of the beneficial ownership of a security which, together with all other acquisitions by the same person of securities of the same class during the preceding twelve months, does not exceed 2 per centum of that class;

(C)

any acquisition of an equity security by the issuer of such security;

(D)

any acquisition or proposed acquisition of a security which the Commission, by rules or regulations or by order, shall exempt from the provisions of this subsection as not entered into for the purpose of, and not having the effect of, changing or influencing the control of the issuer or otherwise as not comprehended within the purposes of this subsection.

(e)

Purchase of securities by issuer

(1)

It shall be unlawful for an issuer which has a class of equity securities registered pursuant to section 78l of this title, or which is a closed-end investment company registered under the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.], to purchase any equity security issued by it if such purchase is in contravention of such rules and regulations as the Commission, in the public interest or for the protection of investors, may adopt (A) to define acts and practices which are fraudulent, deceptive, or manipulative, and (B) to prescribe means reasonably designed to prevent such acts and practices. Such rules and regulations may require such issuer to provide holders of equity securities of such class with such information relating to the reasons for such purchase, the source of funds, the number of shares to be purchased, the price to be paid for such securities, the method of purchase, and such additional information, as the Commission deems necessary or appropriate in the public interest or for the protection of investors, or which the Commission deems to be material to a determination whether such security should be sold.

(2)

For the purpose of this subsection, a purchase by or for the issuer or any person controlling, controlled by, or under common control with the issuer, or a purchase subject to control of the issuer or any such person, shall be deemed to be a purchase by the issuer. The Commission shall have power to make rules and regulations implementing this paragraph in the public interest and for the protection of investors, including exemptive rules and regulations covering situations in which the Commission deems it unnecessary or inappropriate that a purchase of the type described in this paragraph shall be deemed to be a purchase by the issuer for purposes of some or all of the provisions of paragraph (1) of this subsection.

(3)

At the time of filing such statement as the Commission may require by rule pursuant to paragraph (1) of this subsection, the person making the filing shall pay to the Commission a fee at a rate that, subject to paragraph (4), is equal to $92 1

 See Adjustment of Registration Fee Rate notes below.

per $1,000,000 of the value of securities proposed to be purchased. The fee shall be reduced with respect to securities in an amount equal to any fee paid with respect to any securities issued in connection with the proposed transaction under section 6(b) of the Securities Act of 1933 [15 U.S.C. 77f(b)], or the fee paid under that section shall be reduced in an amount equal to the fee paid to the Commission in connection with such transaction under this paragraph.

(4)

Annual adjustment.—

For each fiscal year, the Commission shall by order adjust the rate required by paragraph (3) for such fiscal year to a rate that is equal to the rate (expressed in dollars per million) that is applicable under section 6(b) of the Securities Act of 1933 [15 U.S.C. 77f(b)] for such fiscal year.

(5)

Fee collections.—

Fees collected pursuant to this subsection for fiscal year 2012 and each fiscal year thereafter shall be deposited and credited as general revenue of the Treasury and shall not be available for obligation.

(6)

Effective date; publication.—

In exercising its authority under this subsection, the Commission shall not be required to comply with the provisions of section 553 of title 5. An adjusted rate prescribed under paragraph (4) shall be published and take effect in accordance with section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)).

(7)

Pro rata application.—

The rates per $1,000,000 required by this subsection shall be applied pro rata to amounts and balances of less than $1,000,000.

(f)

Reports by institutional investment managers

(1)

Every institutional investment manager which uses the mails, or any means or instrumentality of interstate commerce in the course of its business as an institutional investment manager and which exercises investment discretion with respect to accounts holding equity securities of a class described in subsection (d)(1) or otherwise becomes or is deemed to become a beneficial owner of any security of a class described in subsection (d)(1) upon the purchase or sale of a security-based swap that the Commission may define by rule, having an aggregate fair market value on the last trading day in any of the preceding twelve months of at least $100,000,000 or such lesser amount (but in no case less than $10,000,000) as the Commission, by rule, may determine, shall file reports with the Commission in such form, for such periods, and at such times after the end of such periods as the Commission, by rule, may prescribe, but in no event shall such reports be filed for periods longer than one year or shorter than one quarter. Such reports shall include for each such equity security held on the last day of the reporting period by accounts (in aggregate or by type as the Commission, by rule, may prescribe) with respect to which the institutional investment manager exercises investment discretion (other than securities held in amounts which the Commission, by rule, determines to be insignificant for purposes of this subsection), the name of the issuer and the title, class, CUSIP number, number of shares or principal amount, and aggregate fair market value of each such security. Such reports may also include for accounts (in aggregate or by type) with respect to which the institutional investment manager exercises investment discretion such of the following information as the Commission, by rule, prescribes—

(A)

the name of the issuer and the title, class, CUSIP number, number of shares or principal amount, and aggregate fair market value or cost or amortized cost of each other security (other than an exempted security) held on the last day of the reporting period by such accounts;

(B)

the aggregate fair market value or cost or amortized cost of exempted securities (in aggregate or by class) held on the last day of the reporting period by such accounts;

(C)

the number of shares of each equity security of a class described in subsection (d)(1) held on the last day of the reporting period by such accounts with respect to which the institutional investment manager possesses sole or shared authority to exercise the voting rights evidenced by such securities;

(D)

the aggregate purchases and aggregate sales during the reporting period of each security (other than an exempted security) effected by or for such accounts; and

(E)

with respect to any transaction or series of transactions having a market value of at least $500,000 or such other amount as the Commission, by rule, may determine, effected during the reporting period by or for such accounts in any equity security of a class described in subsection (d)(1)—

(i)

the name of the issuer and the title, class, and CUSIP number of the security;

(ii)

the number of shares or principal amount of the security involved in the transaction;

(iii)

whether the transaction was a purchase or sale;

(iv)

the per share price or prices at which the transaction was effected;

(v)

the date or dates of the transaction;

(vi)

the date or dates of the settlement of the transaction;

(vii)

the broker or dealer through whom the transaction was effected;

(viii)

the market or markets in which the transaction was effected; and

(ix)

such other related information as the Commission, by rule, may prescribe.

(2)

The Commission shall prescribe rules providing for the public disclosure of the name of the issuer and the title, class, CUSIP number, aggregate amount of the number of short sales of each security, and any additional information determined by the Commission following the end of the reporting period. At a minimum, such public disclosure shall occur every month.

(3)

The Commission, by rule, or order, may exempt, conditionally or unconditionally, any institutional investment manager or security or any class of institutional investment managers or securities from any or all of the provisions of this subsection or the rules thereunder.

(4)

The Commission shall make available to the public for a reasonable fee a list of all equity securities of a class described in subsection (d)(1), updated no less frequently than reports are required to be filed pursuant to paragraph (1) of this subsection. The Commission shall tabulate the information contained in any report filed pursuant to this subsection in a manner which will, in the view of the Commission, maximize the usefulness of the information to other Federal and State authorities and the public. Promptly after the filing of any such report, the Commission shall make the information contained therein conveniently available to the public for a reasonable fee in such form as the Commission, by rule, may prescribe, except that the Commission, as it determines to be necessary or appropriate in the public interest or for the protection of investors, may delay or prevent public disclosure of any such information in accordance with section 552 of title 5. Notwithstanding the preceding sentence, any such information identifying the securities held by the account of a natural person or an estate or trust (other than a business trust or investment company) shall not be disclosed to the public.

(5)

In exercising its authority under this subsection, the Commission shall determine (and so state) that its action is necessary or appropriate in the public interest and for the protection of investors or to maintain fair and orderly markets or, in granting an exemption, that its action is consistent with the protection of investors and the purposes of this subsection. In exercising such authority the Commission shall take such steps as are within its power, including consulting with the Comptroller General of the United States, the Director of the Office of Management and Budget, the appropriate regulatory agencies, Federal and State authorities which, directly or indirectly, require reports from institutional investment managers of information substantially similar to that called for by this subsection, national securities exchanges, and registered securities associations, (A) to achieve uniform, centralized reporting of information concerning the securities holdings of and transactions by or for accounts with respect to which institutional investment managers exercise investment discretion, and (B) consistently with the objective set forth in the preceding subparagraph, to avoid unnecessarily duplicative reporting by, and minimize the compliance burden on, institutional investment managers. Federal authorities which, directly or indirectly, require reports from institutional investment managers of information substantially similar to that called for by this subsection shall cooperate with the Commission in the performance of its responsibilities under the preceding sentence. An institutional investment manager which is a bank, the deposits of which are insured in accordance with the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.], shall file with the appropriate regulatory agency a copy of every report filed with the Commission pursuant to this subsection.

(6)

(A)

For purposes of this subsection the term “institutional investment manager” includes any person, other than a natural person, investing in or buying and selling securities for its own account, and any person exercising investment discretion with respect to the account of any other person.

(B)

The Commission shall adopt such rules as it deems necessary or appropriate to prevent duplicative reporting pursuant to this subsection by two or more institutional investment managers exercising investment discretion with respect to the same amount.2

 So in original. Probably should be “account.”

(g)

Statement of equity security ownership

(1)

Any person who is directly or indirectly the beneficial owner of more than 5 per centum of any security of a class described in subsection (d)(1) of this section or otherwise becomes or is deemed to become a beneficial owner of any security of a class described in subsection (d)(1) upon the purchase or sale of a security-based swap that the Commission may define by rule shall file with the Commission a statement setting forth, in such form and at such time as the Commission may, by rule, prescribe—

(A)

such person’s identity, residence, and citizenship; and

(B)

the number and description of the shares in which such person has an interest and the nature of such interest.

(2)

(3)

(4)

(5)

In exercising its authority under this subsection, the Commission shall take such steps as it deems necessary or appropriate in the public interest or for the protection of investors (A) to achieve centralized reporting of information regarding ownership, (B) to avoid unnecessarily duplicative reporting by and minimize the compliance burden on persons required to report, and (C) to tabulate and promptly make available the information contained in any report filed pursuant to this subsection in a manner which will, in the view of the Commission, maximize the usefulness of the information to other Federal and State agencies and the public.

(6)

The Commission may, by rule or order, exempt, in whole or in part, any person or class of persons from any or all of the reporting requirements of this subsection as it deems necessary or appropriate in the public interest or for the protection of investors.

(h)

Large trader reporting

(1)

Identification requirements for large traders

For the purpose of monitoring the impact on the securities markets of securities transactions involving a substantial volume or a large fair market value or exercise value and for the purpose of otherwise assisting the Commission in the enforcement of this chapter, each large trader shall—

(A)

provide such information to the Commission as the Commission may by rule or regulation prescribe as necessary or appropriate, identifying such large trader and all accounts in or through which such large trader effects such transactions; and

(B)

identify, in accordance with such rules or regulations as the Commission may prescribe as necessary or appropriate, to any registered broker or dealer by or through whom such large trader directly or indirectly effects securities transactions, such large trader and all accounts directly or indirectly maintained with such broker or dealer by such large trader in or through which such transactions are effected.

(2)

Recordkeeping and reporting requirements for brokers and dealers

(3)

Aggregation rules

(4)

Examination of broker and dealer records

(5)

Factors to be considered in Commission actions

In exercising its authority under this subsection, the Commission shall take into account—

(A)

existing reporting systems;

(B)

the costs associated with maintaining information with respect to transactions effected by large traders and reporting such information to the Commission or self-regulatory organizations; and

(C)

the relationship between the United States and international securities markets.

(6)

Exemptions

(7)

Authority of Commission to limit disclosure of information

(8)

Definitions

For purposes of this subsection—

(A)

the term “large trader” means every person who, for his own account or an account for which he exercises investment discretion, effects transactions for the purchase or sale of any publicly traded security or securities by use of any means or instrumentality of interstate commerce or of the mails, or of any facility of a national securities exchange, directly or indirectly by or through a registered broker or dealer in an aggregate amount equal to or in excess of the identifying activity level;

(B)

the term “publicly traded security” means any equity security (including an option on individual equity securities, and an option on a group or index of such securities) listed, or admitted to unlisted trading privileges, on a national securities exchange, or quoted in an automated interdealer quotation system;

(C)

the term “identifying activity level” means transactions in publicly traded securities at or above a level of volume, fair market value, or exercise value as shall be fixed from time to time by the Commission by rule or regulation, specifying the time interval during which such transactions shall be aggregated;

(D)

the term “reporting activity level” means transactions in publicly traded securities at or above a level of volume, fair market value, or exercise value as shall be fixed from time to time by the Commission by rule, regulation, or order, specifying the time interval during which such transactions shall be aggregated; and

(E)

the term “person” has the meaning given in section 78c(a)(9) of this title and also includes two or more persons acting as a partnership, limited partnership, syndicate, or other group, but does not include a foreign central bank.

(i)

Accuracy of financial reports

(j)

Off-balance sheet transactions

(k)

Prohibition on personal loans to executives

(1)

In general

(2)

Limitation

Paragraph (1) does not preclude any home improvement and manufactured home loans (as that term is defined in section 1464 of title 12), consumer credit (as defined in section 1602 of this title), or any extension of credit under an open end credit plan (as defined in section 1602 of this title), or a charge card (as defined in section 1637(c)(4)(e) of this title), or any extension of credit by a broker or dealer registered under section 78o of this title to an employee of that broker or dealer to buy, trade, or carry securities, that is permitted under rules or regulations of the Board of Governors of the Federal Reserve System pursuant to section 78g of this title (other than an extension of credit that would be used to purchase the stock of that issuer), that is—

(A)

made or provided in the ordinary course of the consumer credit business of such issuer;

(B)

of a type that is generally made available by such issuer to the public; and

(C)

made by such issuer on market terms, or terms that are no more favorable than those offered by the issuer to the general public for such extensions of credit.

(3)

Rule of construction for certain loans

(l)

Real time issuer disclosures

(m)

Public availability of security-based swap transaction data

(1)

In general

(A)

Definition of real-time public reporting

(B)

Purpose

(C)

General rule

The Commission is authorized to provide by rule for the public availability of security-based swap transaction, volume, and pricing data as follows:

(i)

With respect to those security-based swaps that are subject to the mandatory clearing requirement described in section 78c–3(a)(1) of this title (including those security-based swaps that are excepted from the requirement pursuant to section 78c–3(g) of this title), the Commission shall require real-time public reporting for such transactions.

(ii)

With respect to those security-based swaps that are not subject to the mandatory clearing requirement described in section 78c–3(a)(1) of this title, but are cleared at a registered clearing agency, the Commission shall require real-time public reporting for such transactions.

(iii)

With respect to security-based swaps that are not cleared at a registered clearing agency and which are reported to a security-based swap data repository or the Commission under

(iv)

With respect to security-based swaps that are determined to be required to be cleared under section 78c–3(b) of this title but are not cleared, the Commission shall require real-time public reporting for such transactions.

(D)

Registered entities and public reporting

(E)

Rulemaking required

With respect to the rule providing for the public availability of transaction and pricing data for security-based swaps described in clauses (i) and (ii) of subparagraph (C), the rule promulgated by the Commission shall contain provisions—

(i)

to ensure such information does not identify the participants;

(ii)

to specify the criteria for determining what constitutes a large notional security-based swap transaction (block trade) for particular markets and contracts;

(iii)

to specify the appropriate time delay for reporting large notional security-based swap transactions (block trades) to the public; and

(iv)

that take into account whether the public disclosure will materially reduce market liquidity.

(F)

Timeliness of reporting

(G)

Reporting of swaps to registered security-based swap data repositories

(H)

Registration of clearing agencies

(2)

Semiannual and annual public reporting of aggregate security-based swap data

(A)

In general

In accordance with subparagraph (B), the Commission shall issue a written report on a semiannual and annual basis to make available to the public information relating to—

(i)

the trading and clearing in the major security-based swap categories; and

(ii)

the market participants and developments in new products.

(B)

Use; consultation

In preparing a report under subparagraph (A), the Commission shall—

(i)

use information from security-based swap data repositories and clearing agencies; and

(ii)

consult with the Office of the Comptroller of the Currency, the Bank for International Settlements, and such other regulatory bodies as may be necessary.

(C)

Authority of Commission

(n)

Security-based swap data repositories

(1)

Registration requirement

(2)

Inspection and examination

(3)

Compliance with core principles

(A)

In general

To be registered, and maintain registration, as a security-based swap data repository, the security-based swap data repository shall comply with—

(i)

the requirements and core principles described in this subsection; and

(ii)

any requirement that the Commission may impose by rule or regulation.

(B)

Reasonable discretion of security-based swap data repository

(4)

Standard setting

(A)

Data identification

(i)

In general

(ii)

Requirement

(B)

Data collection and maintenance

(C)

Comparability

(5)

Duties

A security-based swap data repository shall—

(A)

accept data prescribed by the Commission for each security-based swap under subsection (b);

(B)

confirm with both counterparties to the security-based swap the accuracy of the data that was submitted;

(C)

maintain the data described in subparagraph (A) in such form, in such manner, and for such period as may be required by the Commission;

(D)

(i)

provide direct electronic access to the Commission (or any designee of the Commission, including another registered entity); and

(ii)

provide the information described in subparagraph (A) in such form and at such frequency as the Commission may require to comply with the public reporting requirements set forth in subsection (m);

(E)

at the direction of the Commission, establish automated systems for monitoring, screening, and analyzing security-based swap data;

(F)

maintain the privacy of any and all security-based swap transaction information that the security-based swap data repository receives from a security-based swap dealer, counterparty, or any other registered entity; and

(G)

on a confidential basis pursuant to section 78x of this title, upon request, and after notifying the Commission of the request, make available security-based swap data obtained by the security-based swap data repository, including individual counterparty trade and position data, to—

(i)

each appropriate prudential regulator;

(ii)

the Financial Stability Oversight Council;

(iii)

the Commodity Futures Trading Commission;

(iv)

the Department of Justice; and

(v)

any other person that the Commission determines to be appropriate, including—

(I)

foreign financial supervisors (including foreign futures authorities);

(II)

foreign central banks;

(III)

foreign ministries; and

(IV)

other foreign authorities.

(H)

Confidentiality agreement.—

Before the security-based swap data repository may share information with any entity described in subparagraph (G), the security-based swap data repository shall receive a written agreement from each entity stating that the entity shall abide by the confidentiality requirements described in section 78x of this title relating to the information on security-based swap transactions that is provided.

(6)

Designation of chief compliance officer

(A)

In general

(B)

Duties

The chief compliance officer shall—

(i)

report directly to the board or to the senior officer of the security-based swap data repository;

(ii)

review the compliance of the security-based swap data repository with respect to the requirements and core principles described in this subsection;

(iii)

in consultation with the board of the security-based swap data repository, a body performing a function similar to the board of the security-based swap data repository, or the senior officer of the security-based swap data repository, resolve any conflicts of interest that may arise;

(iv)

be responsible for administering each policy and procedure that is required to be established pursuant to this section;

(v)

ensure compliance with this chapter (including regulations) relating to agreements, contracts, or transactions, including each rule prescribed by the Commission under this section;

(vi)

establish procedures for the remediation of noncompliance issues identified by the chief compliance officer through any—

(I)

compliance office review;

(II)

look-back;

(III)

internal or external audit finding;

(IV)

self-reported error; or

(V)

validated complaint; and

(vii)

establish and follow appropriate procedures for the handling, management response, remediation, retesting, and closing of noncompliance issues.

(C)

Annual reports

(i)

In general

In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of—

(I)

the compliance of the security-based swap data repository of the chief compliance officer with respect to this chapter (including regulations); and

(II)

each policy and procedure of the security-based swap data repository of the chief compliance officer (including the code of ethics and conflict of interest policies of the security-based swap data repository).

(ii)

Requirements

A compliance report under clause (i) shall—

(I)

accompany each appropriate financial report of the security-based swap data repository that is required to be furnished to the Commission pursuant to this section; and

(II)

include a certification that, under penalty of law, the compliance report is accurate and complete.

(7)

Core principles applicable to security-based swap data repositories

(A)

Antitrust considerations

Unless necessary or appropriate to achieve the purposes of this chapter, the swap data repository shall not—

(i)

adopt any rule or take any action that results in any unreasonable restraint of trade; or

(ii)

impose any material anticompetitive burden on the trading, clearing, or reporting of transactions.

(B)

Governance arrangements

Each security-based swap data repository shall establish governance arrangements that are transparent—

(i)

to fulfill public interest requirements; and

(ii)

to support the objectives of the Federal Government, owners, and participants.

(C)

Conflicts of interest

Each security-based swap data repository shall—

(i)

establish and enforce rules to minimize conflicts of interest in the decision-making process of the security-based swap data repository; and

(ii)

establish a process for resolving any conflicts of interest described in clause (i).

(D)

Additional duties developed by Commission

(i)

In general

(ii)

Consideration of evolving standards

(iii)

Additional duties for Commission designees

(8)

Required registration for security-based swap data repositories

(9)

Rules

(o)

Beneficial ownership

(p)

Disclosures relating to conflict minerals originating in the Democratic Republic of the Congo

(1)

Regulations

(A)

In general

Not later than 270 days after July 21, 2010, the Commission shall promulgate regulations requiring any person described in paragraph (2) to disclose annually, beginning with the person’s first full fiscal year that begins after the date of promulgation of such regulations, whether conflict minerals that are necessary as described in paragraph (2)(B), in the year for which such reporting is required, did originate in the Democratic Republic of the Congo or an adjoining country and, in cases in which such conflict minerals did originate in any such country, submit to the Commission a report that includes, with respect to the period covered by the report—

(i)

a description of the measures taken by the person to exercise due diligence on the source and chain of custody of such minerals, which measures shall include an independent private sector audit of such report submitted through the Commission that is conducted in accordance with standards established by the Comptroller General of the United States, in accordance with rules promulgated by the Commission, in consultation with the Secretary of State; and

(ii)

a description of the products manufactured or contracted to be manufactured that are not DRC conflict free (“DRC conflict free” is defined to mean the products that do not contain minerals that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country), the entity that conducted the independent private sector audit in accordance with clause (i), the facilities used to process the conflict minerals, the country of origin of the conflict minerals, and the efforts to determine the mine or location of origin with the greatest possible specificity.

(B)

Certification

(C)

Unreliable determination

(D)

DRC conflict free

(E)

Information available to the public

(2)

Person described

A person is described in this paragraph if—

(A)

the person is required to file reports with the Commission pursuant to paragraph (1)(A); and

(B)

conflict minerals are necessary to the functionality or production of a product manufactured by such person.

(3)

Revisions and waivers

The Commission shall revise or temporarily waive the requirements described in paragraph (1) if the President transmits to the Commission a determination that—

(A)

such revision or waiver is in the national security interest of the United States and the President includes the reasons therefor; and

(B)

establishes a date, not later than 2 years after the initial publication of such exemption, on which such exemption shall expire.

(4)

Termination of disclosure requirements

(5)

Definitions

(q)

Disclosure of payments by resource extraction issuers

(1)

Definitions

In this subsection—

(A)

the term “commercial development of oil, natural gas, or minerals” includes exploration, extraction, processing, export, and other significant actions relating to oil, natural gas, or minerals, or the acquisition of a license for any such activity, as determined by the Commission;

(B)

the term “foreign government” means a foreign government, a department, agency, or instrumentality of a foreign government, or a company owned by a foreign government, as determined by the Commission;

(C)

the term “payment”—

(i)

means a payment that is—

(I)

made to further the commercial development of oil, natural gas, or minerals; and

(II)

not de minimis; and

(ii)

includes taxes, royalties, fees (including license fees), production entitlements, bonuses, and other material benefits, that the Commission, consistent with the guidelines of the Extractive Industries Transparency Initiative (to the extent practicable), determines are part of the commonly recognized revenue stream for the commercial development of oil, natural gas, or minerals;

(D)

the term “resource extraction issuer” means an issuer that—

(i)

is required to file an annual report with the Commission; and

(ii)

engages in the commercial development of oil, natural gas, or minerals;

(E)

the term “interactive data format” means an electronic data format in which pieces of information are identified using an interactive data standard; and

(F)

the term “interactive data standard” means 5

 So in original. The word “a” probably should appear.

standardized list of electronic tags that mark information included in the annual report of a resource extraction issuer.

(2)

Disclosure

(A)

Information required

Not later than 270 days after July 21, 2010, the Commission shall issue final rules that require each resource extraction issuer to include in an annual report of the resource extraction issuer information relating to any payment made by the resource extraction issuer, a subsidiary of the resource extraction issuer, or an entity under the control of the resource extraction issuer to a foreign government or the Federal Government for the purpose of the commercial development of oil, natural gas, or minerals, including—

(i)

the type and total amount of such payments made for each project of the resource extraction issuer relating to the commercial development of oil, natural gas, or minerals; and

(ii)

the type and total amount of such payments made to each government.

(B)

Consultation in rulemaking

(C)

Interactive data format

(D)

Interactive data standard

(i)

In general

(ii)

Electronic tags

The interactive data standard shall include electronic tags that identify, for any payments made by a resource extraction issuer to a foreign government or the Federal Government—

(I)

the total amounts of the payments, by category;

(II)

the currency used to make the payments;

(III)

the financial period in which the payments were made;

(IV)

the business segment of the resource extraction issuer that made the payments;

(V)

the government that received the payments, and the country in which the government is located;

(VI)

the project of the resource extraction issuer to which the payments relate; and

(VII)

such other information as the Commission may determine is necessary or appropriate in the public interest or for the protection of investors.

(E)

International transparency efforts

(F)

Effective date

(3)

Public availability of information

(A)

In general

(B)

Other information

(4)

Authorization of appropriations

(r)

Disclosure of certain activities relating to Iran

(1)

In general

Each issuer required to file an annual or quarterly report under subsection (a) shall disclose in that report the information required by paragraph (2) if, during the period covered by the report, the issuer or any affiliate of the issuer—

(A)

knowingly engaged in an activity described in subsection (a) or (b) of section 5 of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note);

(B)

knowingly engaged in an activity described in subsection (c)(2) of section 8513 of title 22 or a transaction described in subsection (d)(1) of that section;

(C)

knowingly engaged in an activity described in section 8514a(b)(2) of title 22; or

(D)

knowingly conducted any transaction or dealing with—

(i)

any person the property and interests in property of which are blocked pursuant to Executive Order No. 13224 (66 Fed. Reg. 49079; relating to blocking property and prohibiting transactions with persons who commit, threaten to commit, or support terrorism);

(ii)

any person the property and interests in property of which are blocked pursuant to Executive Order No. 13382 (70 Fed. Reg. 38567; relating to blocking of property of weapons of mass destruction proliferators and their supporters); or

(iii)

any person or entity identified under section 560.304 of title 31, Code of Federal Regulations (relating to the definition of the Government of Iran) without the specific authorization of a Federal department or agency.

(2)

Information required

If an issuer or an affiliate of the issuer has engaged in any activity described in paragraph (1), the issuer shall disclose a detailed description of each such activity, including—

(A)

the nature and extent of the activity;

(B)

the gross revenues and net profits, if any, attributable to the activity; and

(C)

whether the issuer or the affiliate of the issuer (as the case may be) intends to continue the activity.

(3)

Notice of disclosures

(4)

Public disclosure of information

Upon receiving a notice under paragraph (3) that an annual or quarterly report includes a disclosure of an activity described in paragraph (1), the Commission shall promptly—

(A)

transmit the report to—

(i)

the President;

(ii)

the Committee on Foreign Affairs and the Committee on Financial Services of the House of Representatives; and

(iii)

the Committee on Foreign Relations and the Committee on Banking, Housing, and Urban Affairs of the Senate; and

(B)

make the information provided in the disclosure and the notice available to the public by posting the information on the Internet website of the Commission.

(5)

Investigations

Upon receiving a report under paragraph (4) that includes a disclosure of an activity described in paragraph (1) (other than an activity described in subparagraph (D)(iii) of that paragraph), the President shall—

(A)

initiate an investigation into the possible imposition of sanctions under the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note), section 8513 or 8514a of title 22, an Executive order specified in clause (i) or (ii) of paragraph (1)(D), or any other provision of law relating to the imposition of sanctions with respect to Iran, as applicable; and

(B)

not later than 180 days after initiating such an investigation, make a determination with respect to whether sanctions should be imposed with respect to the issuer or the affiliate of the issuer (as the case may be).

(6)

Sunset

(s)

Data standards

(1)

Requirement

(2)

Consistency

(June 6, 1934, ch. 404, title I, § 13, 48 Stat. 894; Pub. L. 88–467, § 4, Aug. 20, 1964, 78 Stat. 569; Pub. L. 90–439, § 2, July 29, 1968, 82 Stat. 454; Pub. L. 91–567, §§ 1, 2, Dec. 22, 1970, 84 Stat. 1497; Pub. L. 94–29, § 10, June 4, 1975, 89 Stat. 119; Pub. L. 94–210, title III, § 308(b), Feb. 5, 1976, 90 Stat. 57; Pub. L. 95–213, title I, § 102, title II, §§ 202, 203, Dec. 19, 1977, 91 Stat. 1494, 1498, 1499; Pub. L. 98–38, § 2(a), June 6, 1983, 97 Stat. 205; Pub. L. 100–181, title III, §§ 315, 316, Dec. 4, 1987, 101 Stat. 1256; Pub. L. 100–241, § 12(d), Feb. 3, 1988, 101 Stat. 1810; Pub. L. 100–418, title V, § 5002, Aug. 23, 1988, 102 Stat. 1415; Pub. L. 101–432, § 3, Oct. 16, 1990, 104 Stat. 964; Pub. L. 107–123, § 5, Jan. 16, 2002, 115 Stat. 2395; Pub. L. 107–204, title I, § 109(i), formerly § 109(h), title IV, §§ 401(a), 402(a), 409, July 30, 2002, 116 Stat. 771, 785, 787, 791, renumbered § 109(i), Pub. L. 111–203, title IX, § 982(h)(3), July 21, 2010, 124 Stat. 1930; Pub. L. 111–203, title VII, §§ 763(i), 766(b), (c), (e), title IX, §§ 929R(a), 929X(a), 985(b)(4), 991(b)(2), title XV, §§ 1502(b), 1504, July 21, 2010, 124 Stat. 1779, 1799, 1866, 1870, 1933, 1952, 2213, 2220; Pub. L. 112–106, title I, § 102(b)(2), Apr. 5, 2012, 126 Stat. 309; Pub. L. 112–158, title II, § 219(a), Aug. 10, 2012, 126 Stat. 1235; Pub. L. 114–94, div. G, title LXXXVI, § 86001(c), Dec. 4, 2015, 129 Stat. 1798; Pub. L. 117–263, div. E, title LVIII, § 5821(f), Dec. 23, 2022, 136 Stat. 3426.)

cite as: 15 USC 78m

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