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entitled to notice shall be given notice of hearing a resonable time in advance of the hearing, and such notice may be given by personal service, by confirmed telegraphic notice or, in any proceedings other than those pursuant to section 8 of the Securities Act of 1933 or sections 305 or 307 of the Trust Indenture Act of 1939, by registered mail or certified mail, addressed to his last known business or residence address or to the address of his agent for service.
(c) Publication of notice of hearing. Unless otherwise ordered by the Commission, notice of any public hearing shall be given general circulation by release to the public press and, where ordered, by publication in the FEDERAL REGISTER.
(d) Amendment of order for proceedings. In any proceeding amendments to the matters of fact and law to be considered may be authorized, for cause shown, by the hearing officer during the course of the hearing, or by the Commission at
(e) Effect of failure to appear. If any person who is named in an order for proceeding as a person against whom findings may be made or sanctions imposed in the proceeding does not file a notice of appearance in the proceeding within 15 days after service upon him of the order for proceeding (unless a different period is specified in the order), or if he fails to appear at a hearing of which he has been duly notified, such person shall be deemed in default and the proceeding may be determined against him upon consideration of the order for proceeding, the allegations of which may be deemed to be true. For the purpose of this paragraph an answer shall constitute a notice of appearance. Rule 7. Answers.
(a) When required. In any order for proceeding issued by the Commission, the Commission may direct that any party respondent shall file an answer to the allegations contained in the order for proceeding, and any party in any proceeding may file an answer. (b) Time to file answer. Except where a dif
a ferent period is provided by rule or by order, a party respondent directed to file an answer as provided in paragraph (a) of this rule shall do so within 15 days after service upon him of the order for proceeding. Any other person admitted to
such a proceeding (except a person becoming a party under Rule 9(a)) may be required to file an answer within such time as is directed by the hearing officer or the Commission. Where amendments to the matters of fact and law to be considered in such proceeding are authorized subsequent to the institution of the proceeding, the parties may be required to answer within a reasonable time the matters of fact and law to be considered as amended.
(c) Requirements of answer; effect of failure to deny. Unless otherwise directed by the Commission, an answer required by this rule shall specifically admit, deny, or state that the party does not have and is unable to obtain sufficient information to admit or deny, each allegation in the order for proceeding. A statement of a lack of information shall have the effect of a denial. Any allegation not denied shall be deemed to be admitted. When a party intends in good faith to deny only a part or a qualification of an allegation, he shall specify so much of it as is true and shall deny only the remainder.
(d) Motion for more definite statement. A party may file, with an answer required by this rule, a motion for a more definite statement of specified matters of fact or law to be considered or determined. Such motion shall state the respects in which, and the reasons why, each such matter of fact or law should be required to be made more definite. 'If the motion is granted, the order granting such motion will set the periods in which such statement, and any answer thereto, shall be filed.
(e) Effect of failure to file answer. If a party fails to file an answer required by this rule within the time provided, such person shall be deemed in default and the proceeding may be determined against him by the Commission upon consideration of the order for proceeding, the allegations of which may be deemed to be true.
(f) Signature on answer; requirement and effect. Every answer filed pursuant to this rule shall be signed by the party filing it or by at least one attorney, in his individual name, who represents such party. This signature constitutes a certificate by the signer that he has read the answer; that to the best of his knowledge, information and belief there is good ground to support it; and that it is not interposed for delay.
Rule 8. Settlements, Agreements, and Confer
ences (a) Offers of settlement. (1) Parties may propose in writing offers of settlement which shall be submitted to and considered by the interested division of the Commission where time, the nature of the proceeding, and the public interest permit. Such offers may be made at any time during the course of the proceeding; and (2) the interested division shall present an offer of settlement to the Commission with its recommendation, except that where the division's recommendation is unfavorable, the offer shall not be presented to the Commission by the division unless the party making the offer so requests. Where the Commission deems it appropriate, it may also give the party making the offer an opportunity to make an oral presentation to the Commission. Where the Commission rejects an offer of settlement, the party making the offer shall be notified of the Commission's action and the offer of settlement shall be deemed withdrawn and such offer and any documents relating thereto shall not constitute a part of the record. Final acceptance by the Commission of any offer of settlement will be only by its Findings and Opinion issued in the proceedings.
(b) Specification of procedures. In any proceeding the moving party shall, in the moving papers or the notice of hearing if that is practicable, or, if not, as early as practicable in the course of the hearing, specify the procedures considered necessary or appropriate in the proceeding, with particular reference to (1) whether there should be an initial decision by a hearing officer, (2) whether the interested division of the Commission may assist in the preparation of the Commission's decision, and (3) whether there should be a 30-day waiting period between the issuance of the Commission's order and the date it is to become effective. Any other party may object promptly or within such time as shall be designated by the hearing officer, having due regard to the circumstances of the case and to the procedure so specified, and such party may specify such additional procedure as he considers necessary or appropriate; in the absence of such objection or specification of additional procedure, such party may be deemed to have waived objection to the specified procedure and to the omission of any procedure not specified, unless the Commission, for good
cause shown and upon taking into account any resulting prejudice to other parties, determines the contrary.
(c) Agreements on procedure. Any proposal as to the procedural matters enumerated in paragraph (b) of this rule which is agreed upon by all parties present and which is not contrary to any specific provision of this part, shall, subject to the approval of the hearing officer, be embodied in an appropriate stipulation, which shall become part of the record, and shall determine the procedure in that respect, except that the Commission may order that the hearing officer prepare an initial decision notwithstanding any waiver by the parties. (d) Conferences. At the opening of a hearing
a or at any other time during the course of any proceeding, to the extent practicable, where time, the nature of the proceeding and the public interest permit, the hearing officer shall, at the request of any party or upon his own motion, hold conferences for the purpose of clarifying and simplifying issues by consent of the parties, including where practical and reasonable, considering (1) the possibility of obtaining stipulations and admissions of facts and of authenticity and contents of documents which will avoid unnecessary proof; (2) expedition in the presentation of evidence; (3) the exchange of copies of proposed exhibits; and (4) such other matters as will promote a fair and expeditious hearing or aid in the disposition of the proceeding. At the conclusion of a conference the hearing officer shall enter a ruling or order which recites the matters agreed upon by the parties and any procedural determinations made by the hearing officer.
(Amended Title and paras. (c) and (d) eff. Aug. 2, 1966, Release 33 4842.) Rule 9. Parties and Limited Participation.
(a) Who may become parties; interested division a party. Any interested representative, agency, authority or instrumentality of the United States or any interested State, State commission, municipality or other political subdivision of a State shall become a party to any proceeding upon the filing of a written notice of appearance therein. The interested division of the Commission shall be deemed a party to all proceedings.
(b) Parties in broker-dealer proceedings.
(1) In proceedings under Sections 15(b), 15A (1) (2) or 19(a) (3) of the Securities Exchange Act of 1934, any person associated with a member of a national securities association, a member of a national securities exchange, a broker or a dealer, whose interests may be affected by the proceedings, shall be entitled to participate as a party. If he participates generally in the proceedings or files a notice of appearance, he shall be deemed a party of record and will be given notices of intermediate developments in the proceedings. 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. The term “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 Securities Exchange Act of 1934.
(2) Unless the Commission otherwise directs, paragraph (b) (1) above shall apply only to proceedings instituted prior to August 20, 1964. The term “person associated" referred to therein 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 Securities Exchange Act of 1934 as in effect prior to August 20, 1964.
(c) Limited participation; leave to be heard. Any person may, at the discretion of the hearing officer, be given leave to be heard in any proceeding as to any matter affecting his interests. Requests for leave to be heard shall be in writing, shall set forth the nature and extent of the applicant's interest in the proceeding, and, except where good cause for late filing is shown, shall be filed not later than 2 days prior to the date fixed for the commencement of the hearing, or where a respondent is required to answer, requests for leave to be heard shall be filed within the time provided for the filing of the answer. The hearing officer or the Commission may direct any person requesting leave to be heard to submit himself to examination as to his interest in the proceeding.
(d) Rights of participant. Leave to be heard pursuant to paragraph (c) of this rule may include such rights of a party as the hearing officer
may deem appropriate, except that oral argument before the Commission may be permitted only by the Commission upon written request therefor. Persons granted leave to be heard shall be bound, except as may be otherwise determined by the hearing officer, by any stipulation between the parties to the proceeding with respect to procedure, including submission of evidence, substitution of exhibits, corrections of the record, the time within which briefs or exceptions may be filed or proposed findings and conclusions may be submitted, the filing of initial decisions, the procedure to be followed in the preparation of decisions, and the effective date of the Commission's order in the case. Where the filing of briefs or exceptions or the submission of proposed findings and conclusions are waived by the parties to the proceedings, a person granted leave to be heard pursuant to paragraph (c) of this rule shall not be permitted to file a brief or exceptions or submit proposed findings and conclusions except by leave of the Commission or of the hearing officer, if the hearing is pending before the hearing officer. Except as may otherwise be specifically directed by the hearing officer at the request of any person granted leave to be heard, such person shall be expected to inform himself by attendance at public hearings and by examination of the public files of the Commission as to the various steps taken in the proceeding including continuances, the filing of amendments, answers, motions, or briefs by parties to the preceeding, or the fixing of time for any such action, and such person shall not be entitled as of right to other notice thereof, or to service of copies of documents.
(e) When intervention as party granted. Except as provided in paragraphs (a) and (b) of this rule, no person shall be admitted as a party to a proceeding by intervention unless the Commission is satisfied on the basis of the written application of such person (and any evidence taken in connection therewith) that his participation as a party will be in the public interest, and that leave to be heard pursuant to paragraphs (c) and (d) of this rule would be inadequate for the protection of his interests.
(f) Permission to state views. Any person who has not complied with the requirements of paragraph (c) of this rule may, in the discretion of the hearing officer, be permitted to file a memorandum or make an oral statement of his views, and the hearing officer may accept for the record written communications received from any such person. Unless offered and admitted as evidence of the truth of the statements therein made, the memoranda and oral or written communications submitted pursuant to the provisions of this paragraph will be considered only to the extent that the statements therein made are otherwise supported by the record.
(g) Certain persons entitled to leave to be heard. The hearing officer is directed to grant leave to be heard under paragraph (c) or (f) of this rule, whichever may be applicable, to any person to whom it is proposed to issue any security in exchange for one or more bona fide outstanding securities, claims or property interests, or partly in such exchange and partly for cash, where the Commission is authorized to approve the terms and conditions of such issuance and exchange after a hearing upon the fairness of such terms and conditions.
(h) Review by Commission; modification of participation provisions. Any ruling of the hearing officer as to matters within the scope of this rule is subject to review by the Commission at the close of the proceeding, or at the Commission's discretion, in the course of the proceeding. The Commission may, by order in any case, modify the provisions of this rule which would otherwise be applicable, and may impose such terms and conditions on the participation of any person in any proceeding as it may deem necessary or appropriate in the public interest. Rule 10. Consolidation.
By order of the Commission, proceedings involving a common question of law or fact may be joined for hearing of any or all the matters in issue in such proceedings and such proceedings may be consolidated; and the Commission may make such orders concerning the conduct of such proceedings as may tend to avoid unnecessary costs or delay. Rule 11. Hearings for the Purpose of Taking
Evidence; Motions and Applications to
Hearing Officer. (a) When held. Hearings for the purpose of taking evidence shall be held as ordered by the Commission.
(b) Presiding officers; public hearings. All such hearings shall be held before the Commission or a hearing officer, who shall be a hearing examiner or other officer duly designated by the Commission or shall be one or more members of the Commission. The hearings shall be conducted in an impartial and orderly manner. All such hearings, except hearings on applications for confidential treatment filed pursuant to the provisions of Clause 30 of Schedule A of the Securities Act of 1933, section 24(b) of the Securities Exchange Act of 1934, section 22(b) of the Public Utility Holding Company Act of 1935, section 45(a) of the Investment Comany Act of 1940, section 210(a) of the Investment Advisers Act of 1940, or the rules and regulations promulgated under such sections, shall be public unless otherwise ordered by the Commission. No hearing shall be private where all respondents request that the hearing be made public.
(c) Disqualification of hearing officer. In any hearing for the purpose of taking evidence a hearing officer may withdraw from a case when he deems himself disqualified. In such event he shall immediately notify the Commission of his withdrawal and inform it of his reasons for such action. Any party or any person who has been granted leave to be heard pursuant to Rule 9 may in good faith request a hearing officer to withdraw on the grounds of personal bias or other disqualification. The person seeking disqualification shall file with the hearing officer a timely affidavit setting forth in detail the facts alleged to constitute grounds for disqualification, and the hearing officer may file a response thereto. If the hearing officer believes himself not disqualified, he shall so rule and proceed with the hearing. If the person seeking disqualification excepts from the ruling of the hearing officer, the hearing officer shall certify the question together with the affidavit and any response filed in connection with it, to the Commission. The Commission may rule on the question without hearing or it may require testimony or argument on the issues raised. The affidavit and response, any testimony taken, and the decision thereon shall be part of the record in the case.
(d) Functions of hearing officer. The hearing officer shall regulate the course of the hearing and shall perform the functions specified in Rule 11(e). Upon notice to all parties, the hearing officer may reopen any hearing prior to the filing of an initial decision therein, or, if no initial decision is to be filed, prior to the time fixed for the filing of final briefs with the Commission.
(e) Rulings by hearing officer; exceptions. Except as otherwise directed by the Commission, or where these rules specifically provide otherwise, all applications, motions and objections made during a proceeding prior to the filing of an initial decision therein, or, if no initial decision is to be filed, prior to the time fixed for the filing of final briefs with the Commission, shall be made to or referred to and decided by the hearing officer, except that where his ruling would dispose of the proceeding in whole or in part, it shall be made only in an initial decision submitted after the conclusion of the hearing. Except where the hearing officer prescribes or permits a different procedure, any application or motion shall be in writing and shall be accompanied by a written brief of the points and authorities relied upon in support of the same and any party may file an anwser within 5 days after service upon him of such motion or application as provided in Rule 23. Objections to the admission or exclusion of evidence must be made on the record and shall be in short form, stating the grounds of objections relied upon, and the transcript shall not include argument or debate thereon except as ordered by the hearing officer. Rulings by the hearing officer on all applications, motions and objections shall be part of the record. Exceptions to any ruling thereon by the hearing officer need not be noted at the time of the ruling in order to be urged before the Commission. Such exceptions will be deemed waived however, unless raised (1) in accordance with Rule 12(a), (2) in the manner of a proposed finding in accordance with Rule 16(d), or (3) in a petition for Commission review of an initial decision in accordance with Rule 17.
(f) Transcript of hearings. Hearings for the purpose of taking evidence shall be stenographically reported, and a transcript thereof shall be made.
request and obtain the production of any statement, or part thereof, of such witness, pertaining to his direct testimony, in the possession of the Division, subject, however, to the limitations applicable to the production of witnesses' statements under the Jencks Act, 18 U.S.C. 3500.
(Adopted Rule 11.1 eff. Aug. 2, 1966, Release 33-4842.) Rule 12. Interlocutory Review; Motions and
Applications to Commission. (a) Review of hearing officer's rulings. The Commission will not review a ruling of the hearing officer prior to its consideration of the entire proceeding in the absence of extraordinary circumstances. Except as provided in Rule 11(c), a hearing officer shall not certify a ruling for interlocutory review by the Commission unless a party so requests and (1) the hearing officer finds, either on the record or in writing, that in his opinion a subsequent reversal of his ruling would cause unusual delay or expense, taking into consideration the probability of such reversal, or (2) his ruling would compel testimony of Commission members, officers or employees or the production of documentary evidence in their custody. The certification by the hearing officer shall be in writing and shall specify the material relevant to the ruling involved. The Commission may decline to consider the ruling certified, if it determines that interlocutory review is not warranted or appropriate under the circumstances. If the hearing officer does not certify a matter, a party who had requested certification may apply to the Commission for review, or the Commission on its own motion may direct that any matter be submitted to it for review. An application for review shall be in writing and shall briefly state the grounds relied on. Review will not be granted unless the Commission concludes that the hearing officer erred in failing to certify the matter. Unless otherwise ordered by the hearing officer, the hearing before the hearing officer shall continue whether or not such certification or application is made. Failure to request certification or to make such application will not waive the right to seek review of the ruling of the hearing officer after the close of the hearing pursuant to Rules 16(d) and 17. The Commission will prescribe the procedure for each application hereunder and paragraph (c) of this rule shall not apply.