15 U.S.C. § 78iii — Functions of self-regulatory organizations

submitted 56 years ago by Pub. L. 91-598 to r/title-15-COMMERCE-AND-TRADE · 550 words · no verdicts yet

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Self-regulatory organizations (SROs) collect SIPC assessments from their members and pass the money to SIPC. SROs also inspect members for compliance with financial rules and report findings to SIPC. SIPC and the SEC coordinate with SROs to catch financial trouble early.

(a) Collection agent — Each SRO acts as SIPC's collection agent, gathering assessments from all SIPC members it oversees — unless SIPC picks a different SRO to do that job for a member who belongs to more than one SRO. If a member's only SRO is a registered clearing agency that isn't its examining authority, SIPC can still make that clearing agency the collection agent, or require the member to pay SIPC directly. A collection agent only has to hand assessed money to SIPC once it actually receives that money. Members who don't belong to any SRO must pay SIPC directly. (b) Immunity — No SRO can be held liable to anyone for actions it takes, or fails to take, in good faith under sections 78eee(a)(1) and 78eee(a)(2). (c) Inspections — The SRO that a member belongs to must inspect that member for compliance with financial responsibility rules. Two exceptions: (1) if the SRO is a registered clearing agency, the SEC can decide to do the inspection itself; and (2) if a member belongs to more than one SRO, the SEC — under section 78q(d) — must pick one SRO (or itself) to handle the inspection. (d) Reports — SROs must file inspection or examination reports (or copies) with SIPC, in whatever form SIPC designates by bylaw or rule. (e) Consultation — SIPC must work with SROs to: (1) develop procedures to catch a member's financial trouble early; (2) make sure SRO examinations for compliance use consistent methods and scope, with standardized report forms where possible; and (3) make sure, as often as practical, each member files financial information with, and gets examined by, its own examining SRO. (f) Financial condition of members — The SEC can make rules requiring any SRO to give SIPC reports and records about the financial condition of its members, whenever the SEC decides that's necessary or appropriate to protect the public or carry out this chapter's purpose.

the actual law source: uscode.house.gov ↗public domain

(a) Collection agent

Each self-regulatory organization shall act as collection agent for SIPC to collect the assessments payable by all members of SIPC for whom such self-regulatory organization is the examining authority, unless SIPC designates a self-regulatory organization other than the examining authority to act as collection agent for any member of SIPC who is a member of or participant in more than one self-regulatory organization. If the only self-regulatory organization of which a member of SIPC is a member or in which it is a participant is a registered clearing agency that is not the examining authority for the member, SIPC may, nevertheless, designate such registered clearing agency as collection agent for the member or may require that payments be made directly to SIPC. The collection agent shall be obligated to remit to SIPC assessments made under section 78ddd of this title only to the extent that payments of such assessment are received by such collection agent. Members of SIPC who are not members of or participants in a self-regulatory organization shall make payments directly to SIPC.

(b) Immunity

No self-regulatory organization shall have any liability to any person for any action taken or omitted in good faith pursuant to section 78eee(a)(1) and section 78eee(a)(2) of this title.

The self-regulatory organization of which a member of SIPC is a member or in which it is a participant shall inspect or examine such member for compliance with applicable financial responsibility rules, except that—

(1)

if the self-regulatory organization is a registered clearing agency, the Commission may designate itself as responsible for the examination of such member for compliance with applicable financial responsibility rules; and

(2)

if a member of SIPC is a member of or participant in more than one self-regulatory organization, the Commission, pursuant to section 78q(d) of this title, shall designate one of such self-regulatory organizations or itself as responsible for the examination of such member for compliance with applicable financial responsibility rules.

(d) Reports

There shall be filed with SIPC by the self-regulatory organizations such reports of inspections or examinations of the members of SIPC (or copies thereof) as may be designated by SIPC by bylaw or rule.

(e) Consultation

SIPC shall consult and cooperate with the self-regulatory organizations toward the end:

(1)

that there may be developed and carried into effect procedures reasonably designed to detect approaching financial difficulty upon the part of any member of SIPC;

(2)

that, as nearly as may be practicable, examinations to ascertain whether members of SIPC are in compliance with applicable financial responsibility rules will be conducted by the self-regulatory organizations under appropriate standards (both as to method and scope) and reports of such examinations will, where appropriate, be standard in form; and

(3)

that, as frequently as may be practicable under the circumstances, each member of SIPC will file financial information with, and be examined by, the self-regulatory organization which is the examining authority for such member.

(f) Financial condition of members

The Commission may, by such rules as it determines necessary or appropriate in the public interest and to carry out the purposes of this chapter, require any self-regulatory organization to furnish SIPC with reports and records (or copies thereof) relating to the financial condition of members of or participants in such self-regulatory organization.

Source credit: (Pub. L. 91–598, § 13, formerly § 9, Dec. 30, 1970, 84 Stat. 1654; amended Pub. L. 94–29, § 26, June 4, 1975, 89 Stat. 163; renumbered § 13 and amended Pub. L. 95–283, §§ 9, 12, May 21, 1978, 92 Stat. 260, 269.)

history & why it existsrecord from the source credit

1970Enacted · Pub. L. 91-598 · 84 Stat. 1654
1975Amended · Pub. L. 94-29 · 89 Stat. 163
1978Amended · Pub. L. 95-283 · 92 Stat. 260, 269

A history note hasn’t been published yet. The record shows enactment by Pub. L. 91-598 on 1970-12-30.

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