court in any place subject to the jurisdiction of the United States, with respect to any cause of action () which accrues during the period beginning when such broker or dealer becomes registered pursuant to section 15 of the Securities Exchange Act of 1934 and the rules and regulations thereunder and ending either when such registration is canceled or revoked, or when the Commission receives from such broker or dealer a notice to withdraw from such registration, whichever is earlier, (ii) which arises out of any activity, in any place subject to the jurisdiction of the United States, occurring in connection with the conduct of business of a broker or dealer, and (iii) which is founded, directly or indirectly, upon the provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, or any rule or regulation under any of said Acts; and (2) stipulates and agrees that any such civil suit or action may be commenced by the service of process upon the Commission and the forwarding of a copy thereof as provided in paragraph (c) of this rule, and that the service as aforesaid of any such process, pleadings, or other papers upon the Commission shall be taken and held in all courts to be as valid and binding as if due personal service thereof had been made.

(b) The required consent and power of attorney shall be furnished to the Commission within the following period of time:

(1) Each non-resident broker or dealer registered at the time this rule becomes effective, and each non-resident general partner or managing agent of an unincorporated broker or dealer registered at the time this rule becomes effective, shall furnish such consent and power of attorney within 60 days after such date;

(2) Each broker or dealer applying for registration after the effective date of this rule shall furnish, at the time of filing such application, all the consents and powers of attorney required to be furnished by such broker or dealer and by each general partner or managing agent thereof; provided, however, that where an application for registration of a broker or dealer is pending at the time this rule becomes effective such consents and powers of attorney shall be furnished within 30 days after this rule becomes effective.

(3) Each broker or dealer registered resid ing for registration who or which beat the ju resident broker or dealer after the effer of this rule, and each general parte Rule aging agent, of an unincorporated broke i registered or applying for registration comes a non-resident after the effective dr rule, shall furnish such consent and pr attorney within 30 days thereafter.

(c) Service of any process, pleading. papers on the Commission under this be made by delivering the requisite copies thereof to the Secretary of the C or to such other person as the Commis authorize to act in its behalf. Whenever: ess, pleadings or other papers as afors served upon the Commission, it shal forward a copy thereof by registered t appropriate defendants at their last record filed with the Commission. The sion shall be furnished a sufficient number. for such purpose, and one copy for its (d) For purposes of this rule the definitions shall apply:

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(1) The term "broker" shall have the be set out in section 3 (a) (4) of the Sec change Act of 1934.

(2) The term "dealer" shall have the 24 set out in section 3 (a) (5) of the Secu change Act of 1934.

(3) The term "managing agent" shall te person, including a trustee, who directs or who participates in the directing or 4 of the affairs of any unincorporated org or association which is not a partnership

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(4) The term "non-resident broker or shall mean (A) in the case of an indivi who resides in or has his principal place of in any place not subject to the jurisdictia United States; (B) in the case of a cor one incorporated in or having its princi of business in any place not subject to the diction of the United States; (C) in the b partnership or other unincorporated orga or association, one having its principal business in any place not subject to the jars of the United States.

(5) A general partner or managing broker or dealer shall be deemed to be

he resides in any place not subject to ction of the United States.

-8. Statement of Financial Condition Filed With Application for RegistraIs a Broker or Dealer.

ery broker or dealer who files an appliregistration on Form BD shall file with lication, in duplicate original, a stateinancial condition in such detail as will he nature and amount of assets and liad the net worth of such broker or dealer s of such broker or dealer or in which ker or dealer has an interest shall be a separate schedule and valued at the as of a date within 30 days of the date on ch statement is filed. Attached to such shall be an oath or affirmation that such t is true and correct to the best knowledge f of the person making such oath or af

The oath or affirmation shall be made person duly authorized to administer such affirmation. If the broker or dealer is a prietorship, the oath or affirmation shall by the proprietor; if a partnership, by a partner; if a corporation, by a duly ed officer.

he schedule of securities furnished as a uch statement of financial condition shall ed confidential if bound separately from nce of such statement, except that it shall able for official use by any official or emf the United States or any state, by nacurities exchanges and national securities ons of which the person filing such statea member, and by any other person to The Commission authorizes disclosure of Formation as being in the public interest. x contained in this paragraph shall be to be in derogation of the rules of any 1 securities association or national securihange which give to customers of a memoker or dealer the right, upon request to ember, broker or dealer, to obtain inforrelative to his financial condition.

The statement of financial condition reby this rule shall constitute a "document nental" to such application for registration the meaning of section 15 (b) of the Act.

Rule 15b-9. Proceedings under Sections 15 (b), 15A (1) (2) and 19 (a) (3) of the Act. (a) Where the Commission denies or revokes the registration of a broker or dealer pursuant to section 15 (b) of the Act or suspends or expels a member of a national securities association or national securities exchange pursuant to section 15A (7) (2) or section 19 (a) (3) of the Act, the Commission may determine and announce for purposes of section 15A (b) (4) of the Act whether any person associated with the member, broker or dealer was a cause of the imposition of such sanction; such determination may be made whether or not the member, broker or dealer admits the violation or consents to the imposition of the sanction. In such proceedings the Commission may also make such findings with respect to violation by associates of the member, broker or dealer, as may be relevant to the question of causation for purposes of section 15A (b) (4) or to the issues under sections 15 (b), 15A (7) (2) or 19 (a) (3).

(b) In proceedings under sections 15 (b), 15A (7) (2) or 19 (a) (3) of the Act, the Commission will give appropriate notice and opportunity for hearing to the member, broker or dealer concerned and to any person associated with him whose interests may be affected by the proceedings. The member, broker or dealer will be named in the caption of the proceeding and shall be deemed a party of record. An associated person who may be aggrieved will not ordinarily be named in the caption of the proceeding but shall be entitled to participate as a party. If he participates generally in the proceeding or files a notice of appearance, he shall be deemed a party of record and will be given notices of intermediate developments in the proceeding. In any event he may inform himself of such developments by attendance at the hearings or examination of the record (whether the proceedings be public or private) or by arrangement with a party of record, so that he can determine whether he desires to be heard at any time. Rule 9 of the Rules of Practice, other than paragraphs (a) and (b) thereof, shall not apply to proceedings under this rule.

(c) The terms "associated person" and "person associated" as used in this rule shall mean a person associated with a member, broker or dealer in any of the capacities specified in sections 15 (b) and 15A (b) (4) of the Act.

Rule 15c1-1. Definitions.

As used in any rule adopted pursuant to section 15 (c) (1) of the Act:

(a) The term "customer" shall not include a broker or dealer.

(b) The term "the completion of the transaction" means:

(1) In the case of a customer who purchases a security through or from a broker or dealer, except as provided in paragraph (2), the time when such customer pays the broker or dealer any part of the purchase price, or, if payment is effected by a bookkeeping entry, the time when such bookkeeping entry is made by the broker or dealer for any part of the purchase price.

(2) In the case of a customer who purchases a security through or from a broker or dealer and who makes payment therefor prior to the time when payment is requested or notification is given that payment is due, the time when such broker or dealer delivers the security to or into the account of such customer.

(3) In the case of a customer who sells a security through or to a broker or dealer, except as provided in paragraph (4), if the security is not in the custody of the broker or dealer at the time of sale, the time when the security is delivered to the broker or dealer, and if the security is in the custody of the broker or dealer at the time of sale. the time when the broker or dealer transfers the security from the account of such customer.

(4) In the case of a customer who sells a security through or to a broker or dealer and who delivers such security to such broker or dealer prior to the time when delivery is requested or notification is given that delivery is due, the time when such broker or dealer makes payment to or into the account of such customer.

Rule 15c1-2. Fraud and Misrepresentation.

(a) The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

(b) The term "manipulative, deceptive, or other fraudulent device or contrivance." as used

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in section 15 (c) (1) of the Act, is becurit to include any untrue statement of a m. such and any omission to state a material fare tran in order to make the statements made, of the circumstances under which they not misleading, which statement or or made with knowledge or reasonable grua lieve that it is untrue or misleading.

(c) The scope of this rule shall no ited by any specific definitions of the terr ulative, deceptive, or other fraudulent contrivance" contained in other rus pursuant to section 15 (c) (1) of the Ar Rule 15c1-3. Misrepresentation by Bru Dealers as to Registration.

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Rule 15c1-4. Confirmation of Transac

The term "manipulative, deceptive, fraudulent device or contrivance," as us tion 15 (c) (1) of the Act, is hereby d include any act of any broker or dealer d to effect with or for the account of a cust transaction in, or to induce the purchase by such customer of, any security (othe United States Tax Savings Notes, United Defense Savings Stamps, or United St fense Savings Bonds, Series E, F and G such broker or dealer, at or before the co of each such transaction, gives or sends customer written notification disclosing whether he is acting as a broker for such as a dealer for his own account, as a broker fes other person, or as a broker for both such cus and some other person; and (2) in any which he is acting as a broker for such

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th such customer and some other → name of the person from whom the sepurchased or to whom it was sold for comer and the date and time when such on took place or the fact that such inforill be furnished upon the request of such , and the source and amount of any comor other remuneration received or to be by him in connection with the transaction. c1-5. Disclosure of Control.

erm "manipulative, deceptive, or other ›nt device or contrivance," as used in sec(c) (1) of the Act, is hereby defined to any act of any broker or dealer controlled rolling, or under common control with, er of any security, designed to effect with he account of a customer any transaction > induce the purchase or sale by such cus>f, such security unless such broker or before entering into any contract with or customer for the purchase or sale of such 7, discloses to such customer the existence control, and unless such disclosure, if not writing, is supplemented by the giving or x of written disclosure at or before the tion of the transaction.

5c1-6. Disclosure of Interest in Distribuns.

term "manipulative, deceptive, or other lent device or contrivance," as used in sec(c) (1) of the Act, is hereby defined to any act of any broker who is acting for a er or for both such customer and some other , or of any dealer who receives or has promreceiving a fee from a customer for advising ustomer with respect to securities, designed et with or for the account of such customer ansaction in, or to induce the purchase or such customer of, any security in the prior secondary distribution of which such or dealer is participating or is otherwise ially interested unless such broker or dealer before the completion of each such transacives or sends to such customer written notin of the existence of such participation or st.

15c1-7. Discretionary Accounts.

The term "manipulative, deceptive or other ulent device or contrivance," as used in sec

tion 15 (c) (1) of the Act, is hereby defined to include any act of any broker or dealer designed tc effect with or for any customer's account in respect to which such broker or dealer or his agent or employee is vested with any discretionary power any transactions of purchase or sale which are excessive in size or frequency in view of the financial. resources and character of such account.

(b) The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any act of any broker or dealer designed to effect with or for any customer's account in respect to which such broker or dealer or his agent or employee is vested with any discretionary power any transaction of purchase or sale unless immediately after effecting such transaction such broker or dealer makes a record of such transaction which record includes the name of such customer, the name, amount, and price of the security, and the date and time when such transaction took place. Rule 15c1-8. Sales at the Market.

The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section (15) (c) (1) of the Act, is hereby defined to include any representation made to a customer by a broker or dealer who is participating or otherwise financially interested in the primary or secondary distribution of any security which is not admitted to trading on a national securities exchange that such security is being offered to such customer "at the market" or at a price related to the market price unless such broker or dealer knows or has reasonable grounds to believe that a market for such security exists other than that made, created, or controlled by him, or by any person for whom he is acting or with whom he is associated in such distribution, or by any person controlled by, controlling or under common control with him.

Rule 15c1-9. Use of Pro Forma Balance Sheets.

The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include the use of financial statements purporting to give effect to the receipt and application of any part of the proceeds from the sale or exchange of securities, unless the assumptions upon which each such financial statement is based are clearly set forth as part of the caption to each such statement

in type at least as large as that used generally in the body of the statement.

Rule 15c2-1. Hypothecation of Customers' Securities.

(a) General provisions.-The term "fraudulent, deceptive, or manipulative act or practice," as used in section 15 (c) (2) of the Act, is hereby defined to include the direct or indirect hypothecation by a broker or dealer, or his arranging for or permitting, directly, or indirectly, the continued hypothecation of any securities carried for the account of any customer under circumstances

(1) that will permit the commingling of securities carried for the account of any such customer with securities carried for the account of any other customer, without first obtaining the written consent of each such customer to such hypothecation;

(2) that will permit such securities to be commingled with securities carried for the account of any person other than a bona fide customer of such broker or dealer under a lien for a loan made to such broker or dealer; or

(3) that will permit securities carried for the account of customers to be hypothecated, or subjected to any lien or liens or claim or claims of the pledgee or pledgees, for a sum which exceeds the aggregate indebtednes of all customers in respect of securities carried for their accounts; except that this clause shall not be deemed to be violated by reason of an excess arising on any day through the reduction of the aggregate indebtedness of customers on such day, provided that funds or securities in an amount sufficient to eliminate such excess are paid or placed in transfer to pledgee for the purpose of reducing the sum of the liens or claims to which securities carried for the account of customers are subject as promptly as practicable after such reduction occurs, but before the lapse of one-half hour after the commence. ment of banking hours on the next banking day at the place where the largest principal amount of loans of such broker or dealer are payable and, in any event, before such broker or dealer on such day has obtained or increased any bank loan collateralized by securities carried for the account of customers.

(b) Definitions. For the purposes of this

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(1) the term "customer" shall not be include any general or special parte director or officer of such broker or dee to. participant, as such, in any joint, group cate account with such broker or dealer any partner, officer, or director thereof:

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(2) the term "securities carried for the sec of any customer" shall be deemed to me

(i) securities received by or on beha broker or dealer for the account of any

(ii) securities sold and appropriated r broker or dealer to a customer, except securities were subject to a lien when app to a customer they shall not be de "securities carried for the account of tomer" pending their release from s promptly as practicable;

(iii) securities sold, but not appropr such broker or dealer to a customer who any payment therefor, to the extent broker or dealer owns and has received of securities of like kind, except that curities were subject to a lien when such was made they shall not be deemed to b ties carried for the account of any pending their release from such lien as as practicable;

(3) "aggregate indebtedness" shall not be to be reduced by reason of uncollected it computing aggregate indebtedness, relate anteed and guarantor accounts shall be tre a single account and considered on a cos basis, and balances in accounts carrying ba and short positions shall be adjusted by the market value of the securities required such short positions as though such mark were a debit; and

(4) in computing the sum of the liens to which securities carried for the ac customers of a broker or dealer are subj:: | rehypothecation of such securities by broker or dealer who is subject to th to Rule 8c-1 shall be disregarded.

(c) Exemption for cash accounts-2 visions of paragraph (a) (1) hereof st apply to any hypothecation of securities for the account of a customer in a spec account within the meaning of section! Regulation T of the Board of Governors Federal Reserve System, provided that

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