circumstances under whieh it was made false or misleading with respect to any material fact."

SEC. 30. Section 32 of the Securities Exchange Act of 1934, as amended, is amended by adding the following new subsection:

"(c) Any person who fails to file information, documents, or reports pursuant to any provision of this title or any rule or regulation adopted by the Commission thereunder shall forfeit to the United States the sum of $100 for each and every day such failure to file shall continue beyond the time established therefor by this title or any rule or regulation adopted by the Commission thereunder, or beyond such extension of time as may be granted by the Commission. Such forfeiture, which shall not be in lieu of any criminal penalty for such failure to file which might be deemed to arise under subsection (a) of this section, shall be recoverable in a civil suit brought by the Commission in its discretion on behalf of the United States."

SEC. 31. The Securities Exchange Act of 1934, as amended, is amended by adding the following new section:

"LARCENY AND EMBEZZLEMENT

"SEC. 35. Whoever steals, unlawfully and willfully converts to his own use or to the use of another, or embezzles any of the moneys, funds, or securities of, or entrusted to the custody or care of, any member of a national securities exchange, any broker or dealer who transacts a business in securities through the medium of any such member, or any broker or dealer registered pursuant to section 15 of this title, shall be deemed guilty of a crime, and upon conviction thereof shall be subject to the penalties provided in section 32 of this title."

SECURITIES AND EXCHANGE COMMISSION

COMPARATIVE PRINT OF PROPOSED AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

[Deletions in black brackets; additions in italics]

Section 1 would amend paragraph (3) of section 3(a) of the Securities Exchange Act of 1934, as amended, as follows:

"(3) The term "member" when used with respect to an exchange means any firm, organization, corporation or other person [who is] permitted either to effect transactions on the exchange without the services of another person acting as broker, or to make use of the facilities of an exchange for transactions thereon without payment of a commission or fee or with the payment of a commission or fee which is less than that charged the general public, and [includes] any [firm transacting a business as broker or dealer of which a member is a partner, and any partner of any such firm.] general partner, officer, or director of any such firm, organization, corporation, or other person.”

Section 2 would amend paragraph (16) of section 3(a) of the Securities Exchange Act of 1934, as amended, as follows:

"(16) The term "State" means any State of the United States, the District of Columbia, [Alaska,] Hawaii, Puerto Rico, [the Philippine Islands,] the Canal Zone, the Virgin Islands, or any other possession of the United States." Section 3 would amend subsection (e) of section 6 of the Securities Exchange Act of 1934, as amended, as follows:

"(e) Within [thirty] ninety days after the filing of the application the Commission shall enter an order either granting or, after appropriate notice and opportunity for hearing, denying registration as a national securities exchange, unless the exchange applying for registration shall withdraw its application or consent to the Commission's deferring action on its application for a stated longer period after the date of filing. The filing with the Commission of an application for registration by an exchange shall be deemed to have taken place upon the receipt thereof. Amendments to an application may be made upon such terms as the Commission may prescribe.

Section 4 would amend subsection (c) of section 7 of the Securities Exchange Act of 1934, as amended, as follows:

"(c) It shall be unlawful for any member of a national securities exchange, or any broker or dealer who transacts a business in securities through the medium of any such member, or any broker or dealer registered pursuant to

section 15 of this title, directly or indirectly to extend or maintain credit or arrange for the extension or maintenance of credit to or for any customer-" Section 5 would amend the introductory paragraph of section 8 of the Securities Exchange Act of 1934, as amended, as follows:

"SEC. 8. It shall be unlawful for any member of a national securities exchange, or any broker or dealer who transacts a business in securities through the medium of any such member, or any broker or dealer registered pursuant to section 15 of this title, directly or indirectly-"

Section 6 would amend subsection (b) of section 8 of the Securities Exchange Act of 1934, as amended, as follows:

"(b) To effect any transaction in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers' acceptance or commercial bills) in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors to provide safeguards with respect to the financial responsibility of brokers and dealers. [To permit in the ordinary course of business as a broker his aggregate indebtedness to all other persons, including customers' credit balances (but excluding indebtedness secured by exempted securities), to exceed such percentage of the net capital (exclusive of fixed assets and value of exchange membership) employed in the business but not exceeding in any case 2,000 per centum as the Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of investors.]"

Section 7 would amend subsection (d) of section 8 of the Securities Exchange Act of 1934, as amended, as follows:

"(d) To borrow, lend, or hold any securities received or [To lend or arrange for the lending of any securities] carried for the account of any customer [without the written consent of such customer.], or any securities substituted therefor, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors to provide safeguards with respect to securities carried for the ac counts of customers."

Section 8 would amend clauses (B) and (C) of paragraph (1) of section 9(a) of the Securities Exchange Act of 1934, as amended, as follows:

"(1) For the purpose of creating a false or misleading appearance of active trading in any security registered on a national securities exchange, or a false or misleading appearance with respect to the market for any such security, (A) to effect any transaction in such security which involves no change in the beneficial ownership thereof, or (B) to enter an order or orders for the purchase of such security with the knowledge that an order or orders [of substantially the same size,] at substantially the same time, and at substantially the same price. for the sale of any such security, has been or will be entered by or for the same or different parties, or (C) to enter any order or orders for the sale of any such security with the knowledge that an order or orders [of substantially the same size,] at substantially the same time, and at substantially the same price, for the purchase of such security, has been or will be entered by or for the same or different parties."

Section 9 would amend paragraphs (2) and (6) of section 9(a) of the Securities Exchange Act of 1934, as amended, as follows:

"(2) To effect, alone or with one or more other persons, [a series of] one or more transactions in any security registered on a national securities exchange creating actual or apparent active trading in such security or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.

"(6) To effect either alone or with one or more other persons [any series of] one or more transactions for the purchase and/or sale of any security registered on a national securities exchange for the purpose of pegging, fixing, or stabilizing the price of such security in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors."

Section 10 would amend subsection (b) of section 10 of the Securities Exchange Act of 1934, as amended, as follows:

"(b) To use or employ, in connection with the purchase or sale of, or any attempt to purchase or sell, any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission

may prescribe as necessary or appropriate in the public interest or for the protection of investors."

Section 11 would amend subsection (d) of section 11 of the Securities Exchange Act of 1934, as amended, as follows:

"(d) It shall be unlawful for a member of a national securities exchange, [who is both a dealer and a broker, or for any person who both as a broker and a dealer transacts a business in securities through the medium of a number or otherwise.] or any broker or dealer who transacts a business in securities through the medium of a member, or any broker or dealer registered pursuant to section 15 of this title, to effect [through the use of any facility of a national securities exchange or of the mails or of any means or instrumentality of interstate commerce, or otherwise in the case of a member,] (1) any transaction in connection with which, directly or indirectly, he extends or maintains or arranges for the extension or maintenance of credit to or for a customer on any security (other than an exempted security) which was a part of a new issue in the distribution of which he participated as a member of a selling syndicate or group within thirty days prior to such transaction: Provided, That credit shall not be deemed extended by reason of a bona fide delayed delivery of any such security against full payment of the entire purchase price thereof upon such delivery within thirty-five days after such purchase, or (2) any transaction with respect to any security (other than an exempted security) unless, if the transaction is with a customer, he discloses to such customer in writing at or before the completion of the transaction whether he is acting as a dealer for his own account, as a broker for such customer, or as a broker for some other person."

Section 12 would amend subsection (b) of section 14 of the Securities Exchange Act of 1934, as amended, as follows:

"(b) It shall be unlawful for any member of a national securities exchange, or any broker or dealer who transacts a business in securities through the medium of any such member, or any broker or dealer registered pursuant to section 15 of this title, to give a proxy, consent, or authorization in respect of any security registered on a national securities exchange and carried for the account of a customer in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors."

Section 13 would amend the fourth paragraph of section 15(b) of the Securities Exchange Act of 1934, as amended, as follows:

"The Commission shall, after appropriate notice and opportunity for hearing, by order deny registration to, [or revoke the registration of any broker or dealer if it finds that such denial or revocation by order deny registration to,] or suspend for a period not exceeding twelve months or revoke the registration of, any broker or dealer if it finds that such denial, suspension, or revocation is in the public interest and that (1) such broker or dealer whether prior or subsequent to becoming such, or (2) any partner, officer, director, or branch manager of such broker or dealer (or any person occupying a similar status or performing similar functions), or any person directly or indirectly controlling or controlled by such broker or dealer, whether prior or subsequent to becoming such, (A) has willfully made or caused to be made in any application for registration pursuant to this subsection or in any document supplemental thereto or in any proceeding before the Commission with respect to registration pursuant to this subsection any statement which was at the time and in the light of the circumsances under which it was made false or misleading with respect to any material fact; or (B) has been convicted within ten years preceding the filing of any such application or at any time thereafter of any felony or misdemeanor [involving the purchase or sale of any security or arising out of the conduct of the business of a broker or dealer ;] which the Commission finds (i) involves the purchase or sale of any security, or (ii) arises out of the conduct of the business of a broker or dealer or investment adviser, or (iii) involves embezzlement, fraudulent conversion, or misappropriation of funds, securities or other property, or (iv) involves a violation of sections 1341, 1342, or 1343 of title 18, United States Code, as heretofore or hereafter amended; or (C) is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or arising out of the conduct of the business of a broker or dealer or investment adviser; or (D) has willfully violated any provision of the Securities Act of 1933 [, as amended] or the Investment Advisers Act of 1940, or of this title, as any of such statutes

heretofore have been or hereafter may be amended, or of any rule or regulation thereunder. Pending final determination whether any such registration shall be denied, the Commission may by order postpone the effective date of such registration for a period not to exceed [fifteen] ninety days, but if, after appropriate notice and opportunity for hearing, it shall appear to the Commission to be necessary or appropriate in the public interest or for the protection of investors to postpone the effective date of such registration until final determination, the Commission shall so order. Pending final determination whether any such registration shall be revoked, the Commission shall by order suspend such registration if, after appropriate notice and opportunity for hearing, such suspension shall appear to the Commission to be necessary or appropriate in the public interest or for the protection of investors. Any registered broker or dealer may, upon such terms and conditions as the Commission may deem necessary in the public interest or for the protection of investors, withdraw from registration by filing a written notice of withdrawal with the Commission. An application for registration may be withdrawn only with the consent of the Commission if the request to withdraw such application is received by the Commission after it has commenced a proceeding to deny registration. If the Commission finds that any registered broker or dealer, or any broker or dealer for whom an application for registration is pending, is no longer in existence or has ceased to do business as a broker or dealer, the Commission shall by order cancel the registration or application of such broker or dealer."

Section 14 would amend paragraph (3) of section 15(c) of the Securities Exchange Act of 1934, as amended, as follows:

"(3) [No broker or dealer shall make use of the mails or of any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills) otherwise than on a national securities exchange, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors to provide safeguards with respect to the financial responsibility of brokers and dealers.] No broker or dealer shall make use of the mails or of any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills) on a 'when issued' or 'when distributed' basis, otherwise than on a national securities exchange, in contravention of such rules and regulations with respect to 'when issued' or 'when distributed' trading as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors." Section 15 would amend subsection (c) of section 15 of the Securities Exchange Act of 1934, as amended, by adding a new paragraph (4) as follows:

"(4) If in its opinion the public interest and the protection of investors 80 requires, the Commission is authorized summarily to suspend trading, otherwise than on a national securities exchange, in any security (other than an exempted security) for one or more periods no one of which shall exceed ten days. No broker or dealer shall make use of the mails or of any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security in which trading is so suspended, otherwise than on a national securities exchange."

Section 16 would amend subsection (b) (4) of section 15A of the Securities Exchange Act of 1934, as amended, as follows by adding after the semicolon at the end thereof:

"(4) the rules of the association provide that, except with the approval or at the direction of the Commission in cases in which the Commission finds it appropriate in the public interest so to approve or direct, no broker or dealer shall be admitted to or continued in membership in such association, if (1) such broker or dealer, whether prior or subsequent to becoming such, or (2) any partner, officer, director, or branch manager of such broker or dealer (or any person occupying a similar status or performing similar functions), or any person directly or indirectly controlling or controlled by such broker or dealer, whether prior or subsequent to becoming such, (A) has been and is suspended or expelled from a registered securities association (whether national or affiliated) or from a national securities exchange, for violation of any rule of such association or exchange which prohibits any act or transaction constituting conduct inconsistent with just and equitable principles of trade, or requires any act the omission of

which constitutes conduct inconsistent with just and equitable principles of trade or (B) is subject to an order of the Commission denying or revoking his registration pursuant to section 15 of this title, or expelling or suspending him from membership in a registered securities association or a national securities exchange, or (C) by his conduct while employed by, acting for, or directly or indirectly controlling or controlled by, a broker or dealer, was a cause of any suspension, expulsion, or order of the character described in clause (A) or (B) which is in effect with respect to such broker or dealer; in entering any such order, the Commission, association or exchange shall have jurisdiction to determine who was a cause thereof, after appropriate notice and opportunity for hearing;"

Section 17 would amend section 15A of the Securities Exchange Act of 1934, as amended, by adding a new subsection to be designated as subsection (o), as follows:

"(c) If any registered securities association (whether national or affiliated) shall, pursuant to rules adopted under this section, take any action against any person associated with a member thereof or prohibit any person from becoming associated with a member thereof, such action shall be subject to review by the Commission in the same manner and to the same extent as action against a member pursuant to subsections (g) and (h) of this section."

Section 18 would amend paragraph (1) of section 19 (a) of the Securities Exchange Act of 1934, as amended, as follows:

"(a) The Commission is authorized, if in its opinion such action is necessary or appropriate for the protection of investors

“(1) After appropriate notice and opportunity for hearing, by order to suspend for a period not exceeding twelve months or to withdraw the registration of a national securities exchange if the Commission finds (A) that such exchange is not so organized as to be able to comply with the provisons of this title and the rules and regulations thereunder, or (B) that the rules of such exchange are not just and adequate to insure fair dealing and to protect investors, or (C) that such exchange has violated any provision of this title or of the rules and regulations thereunder or has failed to enforce, so far as is within its power, compliance therewith by a member or by an issuer of a security registered thereon."

Section 19 would amend subsection (a) (2) of section 19 of the Securities Exchange Act of 1934, as amended, to read as follows:

"(2) After appropriate notice and opportunity for hearing, by order to deny, to suspend the effective date, [of] to suspend for a period not exceeding twelve months, or to withdraw, the registration of a security [if the Commission finds that the issuer of such security has failed to comply with any provision of this title or the rules and regulations thereunder] registered pursuant to any provision of this title if the Commission finds that the issuer of such security has failed to comply with any provision of this title or of any rule or regulation thereunder. If the public interest and the protection of investors so requires, the Commission may by order temporarily suspend trading in any such security on any national securities exchange pending final determination of any proceeding under this subsecton; upon request of the issuer the Commission shall promptly hear and determine whether the public interest and the protection of investors require the continuation of such temporary suspension. No broker or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security in which trading is temporarily so suspended, on a national securities exchange or otherwise."

Section 20 would amend paragraph (4) of section 19(a) of the Securities Exchange Act of 1934, as amended, to read as follows:

"(4) And if in its opinion the public interest so requires, summarily to suspend trading [in any registered security] on any national securities exchange [for a period not exceeding ten days] in any registered security pursuant to any provision of this title for one or more periods no one of which shall exceed ten days, or with the approval of the President, summarily to suspend all trading on any national securities exchange [for a period not exceeding ninety days] for one or more periods no one of which shall exceed ninety days. No broker or dealer shall make use of the mails or of any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security, in which trading is so suspended pursuant to any provision of this clause (4), on a national securities exchange or otherwise."