15 USC 77s - Special powers of Commission

U.S Code last checked for updates: Apr 29, 2024

§ 77s.

Special powers of Commission

(a)

Rules and regulations

(b)

Recognition of accounting standards

(1)

In general

In carrying out its authority under subsection (a) and under section 13(b) of the Securities Exchange Act of 1934 [15 U.S.C. 78m(b)], the Commission may recognize, as “generally accepted” for purposes of the securities laws, any accounting principles established by a standard setting body—

(A)

that—

(i)

is organized as a private entity;

(ii)

has, for administrative and operational purposes, a board of trustees (or equivalent body) serving in the public interest, the majority of whom are not, concurrent with their service on such board, and have not been during the 2-year period preceding such service, associated persons of any registered public accounting firm;

(iii)

is funded as provided in section 7219 of this title;

(iv)

has adopted procedures to ensure prompt consideration, by majority vote of its members, of changes to accounting principles necessary to reflect emerging accounting issues and changing business practices; and

(v)

considers, in adopting accounting principles, the need to keep standards current in order to reflect changes in the business environment, the extent to which international convergence on high quality accounting standards is necessary or appropriate in the public interest and for the protection of investors; and

(B)

that the Commission determines has the capacity to assist the Commission in fulfilling the requirements of subsection (a) and section 13(b) of the Securities Exchange Act of 1934 [15 U.S.C. 78m(b)], because, at a minimum, the standard setting body is capable of improving the accuracy and effectiveness of financial reporting and the protection of investors under the securities laws.

(2)

Annual report

(c)

Production of evidence

(d)

Federal and State cooperation

(1)

The Commission is authorized to cooperate with any association composed of duly constituted representatives of State governments whose primary assignment is the regulation of the securities business within those States, and which, in the judgment of the Commission, could assist in effectuating greater uniformity in Federal-State securities matters. The Commission shall, at its discretion, cooperate, coordinate, and share information with such an association for the purposes of carrying out the policies and projects set forth in paragraphs (2) and (3).

(2)

It is the declared policy of this subsection that there should be greater Federal and State cooperation in securities matters, including—

(A)

maximum effectiveness of regulation,

(B)

maximum uniformity in Federal and State regulatory standards,

(C)

minimum interference with the business of capital formation, and

(D)

a substantial reduction in costs and paperwork to diminish the burdens of raising investment capital (particularly by small business) and to diminish the costs of the administration of the Government programs involved.

(3)

The purpose of this subsection is to engender cooperation between the Commission, any such association of State securities officials, and other duly constituted securities associations in the following areas:

(A)

the sharing of information regarding the registration or exemption of securities issues applied for in the various States;

(B)

the development and maintenance of uniform securities forms and procedures; and

(C)

the development of a uniform exemption from registration for small issuers which can be agreed upon among several States or between the States and the Federal Government. The Commission shall have the authority to adopt such an exemption as agreed upon for Federal purposes. Nothing in this chapter shall be construed as authorizing preemption of State law.

(4)

In order to carry out these policies and purposes, the Commission shall conduct an annual conference as well as such other meetings as are deemed necessary, to which representatives from such securities associations, securities self-regulatory organizations, agencies, and private organizations involved in capital formation shall be invited to participate.

(5)

For fiscal year 1982, and for each of the three succeeding fiscal years, there are authorized to be appropriated such amounts as may be necessary and appropriate to carry out the policies, provisions, and purposes of this subsection. Any sums so appropriated shall remain available until expended.

(6)

Notwithstanding any other provision of law, neither the Commission nor any other person shall be required to establish any procedures not specifically required by the securities laws, as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(47)], or by chapter 5 of title 5, in connection with cooperation, coordination, or consultation with—

(A)

any association referred to in paragraph (1) or (3) or any conference or meeting referred to in paragraph (4), while such association, conference, or meeting is carrying out activities in furtherance of the provisions of this subsection; or

(B)

any forum, agency, or organization, or group referred to in section 80c–1 of this title, while such forum, agency, organization, or group is carrying out activities in furtherance of the provisions of such section 80c–1.

As used in this paragraph, the terms “association”, “conference”, “meeting”, “forum”, “agency”, “organization”, and “group” include any committee, subgroup, or representative of such entities.

(e)

Evaluation of rules or programs

For the purpose of evaluating any rule or program of the Commission issued or carried out under any provision of the securities laws, as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c), and the purposes of considering, proposing, adopting, or engaging in any such rule or program or developing new rules or programs, the Commission may—

(1)

gather information from and communicate with investors or other members of the public;

(2)

engage in such temporary investor testing programs as the Commission determines are in the public interest or would protect investors; and

(3)

consult with academics and consultants, as necessary to carry out this subsection.

(f)

Rule of construction

(g)

Funding for the GASB

(1)

In general

The Commission may, subject to the limitations imposed by section 15B of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4), require a national securities association registered under the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.] to establish—

(A)

a reasonable annual accounting support fee to adequately fund the annual budget of the Governmental Accounting Standards Board (referred to in this subsection as the “GASB”); and

(B)

rules and procedures, in consultation with the principal organizations representing State governors, legislators, local elected officials, and State and local finance officers, to provide for the equitable allocation, assessment, and collection of the accounting support fee established under subparagraph (A) from the members of the association, and the remittance of all such accounting support fees to the Financial Accounting Foundation.

(2)

Annual budget

(3)

Use of funds

(4)

Limitation on fee

(5)

Rules of construction

(A)

Fees not public monies

(B)

Limitation on authority of the Commission

Nothing in this subsection shall be construed to—

(i)

provide the Commission or any national securities association direct or indirect oversight of the budget or technical agenda of the GASB; or

(ii)

affect the setting of generally accepted accounting principles by the GASB.

(C)

Noninterference with States

(May 27, 1933, ch. 38, title I, § 19, 48 Stat. 85; June 6, 1934, ch. 404, title II, § 209, 48 Stat. 908; Pub. L. 94–210, title III, § 308(a)(2), Feb. 5, 1976, 90 Stat. 57; Pub. L. 96–477, title V, § 505, Oct. 21, 1980, 94 Stat. 2292; Pub. L. 100–181, title II, § 207, Dec. 4, 1987, 101 Stat. 1252; Pub. L. 107–204, title I, § 108(a), July 30, 2002, 116 Stat. 768; Pub. L. 111–203, title IX, §§ 912, 978(a), 985(a)(3), July 21, 2010, 124 Stat. 1824, 1924, 1933.)

cite as: 15 USC 77s