To amend the Securities Exchange Act of 1934 to augment the emergency authority of the Securities and Exchange Commission.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Emergency Securities Response Act of 
2003''.

SEC. 2. EXTENSION OF EMERGENCY ORDER AUTHORITY OF THE SECURITIES 
              EXCHANGE COMMISSION.

    (a) Extension of Authority.--Paragraph (2) of section 12(k) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78l(k)(2)) is amended to 
read as follows:
            ``(2) Emergency orders.--(A) The Commission, in an 
        emergency, may by order summarily take such action to alter, 
        supplement, suspend, or impose requirements or restrictions 
        with respect to any matter or action subject to regulation by 
        the Commission or a self-regulatory organization under the 
        securities laws, as the Commission determines is necessary in 
        the public interest and for the protection of investors--
                    ``(i) to maintain or restore fair and orderly 
                securities markets (other than markets in exempted 
                securities);
                    ``(ii) to ensure prompt, accurate, and safe 
                clearance and settlement of transactions in securities 
                (other than exempted securities); or
                    ``(iii) to reduce, eliminate, or prevent the 
                substantial disruption by the emergency of (I) 
                securities markets (other than markets in exempted 
                securities), investment companies, or any other 
                significant portion or segment of such markets, or (II) 
                the transmission or processing of securities 
                transactions (other than transactions in exempted 
                securities).
            ``(B) An order of the Commission under this paragraph (2) 
        shall continue in effect for the period specified by the 
        Commission, and may be extended. Except as provided in 
        subparagraph (C), the Commission's action may not continue in 
        effect for more than 30 business days, including extensions.
            ``(C) An order of the Commission under this paragraph (2) 
        may be extended to continue in effect for more than 30 business 
        days if, at the time of the extension, the Commission finds 
        that the emergency still exists and determines that the 
        continuation of the order beyond 30 business days is necessary 
        in the public interest and for the protection of investors to 
        attain an objective described in clause (i), (ii), or (iii) of 
        subparagraph (A). In no event shall an order of the Commission 
        under this paragraph (2) continue in effect for more than 90 
        calendar days.
            ``(D) If the actions described in subparagraph (A) involve 
        a security futures product, the Commission shall consult with 
        and consider the views of the Commodity Futures Trading 
        Commission. In exercising its authority under this paragraph, 
        the Commission shall not be required to comply with the 
        provisions of section 553 of title 5, United States Code, or 
        with the provisions of section 19(c) of this title.
            ``(E) Notwithstanding the exclusion of exempted securities 
        (and markets therein) from the Commission's authority under 
        subparagraph (A), the Commission may use such authority to take 
        action to alter, supplement, suspend, or impose requirements or 
        restrictions with respect to clearing agencies for transactions 
        in such exempted securities. In taking any action under this 
        subparagraph, the Commission shall consult with and consider 
        the views of the Secretary of the Treasury.''.
    (b) Consultation; Definition of Emergency.--Section 12(k) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78l(k)) is further amended 
by striking paragraph (6) and inserting the following:
            ``(6) Consultation.--Prior to taking any action described 
        in paragraph (1)(B), the Commission shall consult with and 
        consider the views of the Secretary of the Treasury, Board of 
        Governors of the Federal Reserve System, and the Commodity 
        Futures Trading Commission, unless such consultation is 
        impracticable in light of the emergency.
            ``(7) Definitions.--
                    ``(A) Emergency.--For purposes of this subsection, 
                the term `emergency' means--
                            ``(i) a major market disturbance 
                        characterized by or constituting--
                                    ``(I) sudden and excessive 
                                fluctuations of securities prices 
                                generally, or a substantial threat 
                                thereof, that threaten fair and orderly 
                                markets; or
                                    ``(II) a substantial disruption of 
                                the safe or efficient operation of the 
                                national system for clearance and 
                                settlement of transactions in 
                                securities, or a substantial threat 
                                thereof; or
                            ``(ii) a major disturbance that 
                        substantially disrupts, or threatens to 
                        substantially disrupt--
                                    ``(I) the functioning of securities 
                                markets, investment companies, or any 
                                other significant portion or segment of 
                                the securities markets; or
                                    ``(II) the transmission or 
                                processing of securities transactions.
                    ``(B) Securities laws.--Notwithstanding section 
                3(a)(47), for purposes of this subsection, the term 
                `securities laws' does not include the Public Utility 
                Holding Company Act of 1935 (15 U.S.C. 79a et seq.).''.

SEC. 3. PARALLEL AUTHORITY OF THE SECRETARY OF THE TREASURY WITH 
              RESPECT TO GOVERNMENT SECURITIES.

    Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
5) is amended by adding at the end the following new subsection:
    ``(h) Emergency Authority.--The Secretary may by order take any 
action with respect to a matter or action subject to regulation by the 
Secretary under this section, or the rules of the Secretary thereunder, 
involving a government security or a market therein (or significant 
portion or segment of that market), that the Commission may take under 
section 12(k)(2) of this title with respect to transactions in 
securities (other than exempted securities) or a market therein (or 
significant portion or segment of that market).''.

            Passed the House of Representatives February 26, 2003.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.

Summary: Emergency Securities Response Act of 2003 - Amends the Securities Exchange Act of 1934 to grant the Securities and Exchange Commission (SEC) powers, in an emergency, to reduce, eliminate, or prevent the substantial disruption by the emergency of: (1) securities markets, investment companies, or other significant portion of such markets. Or (2) the transmission or processing of securities transactions. Permits such emergency to extend beyond 30 business days, but no more than 90 calendar days, if the SEC finds that the emergency still exists and determines that the continuation of the emergency order beyond 30 business days is necessary in the public interest and for the protection of investors. Redefines emergency to include a major disturbance that substantially disrupts, or threatens to substantially disrupt: (1) the functioning of securities markets, investment companies, or any other significant portion or segment of the securities markets. Or (2) the transmission or processing of securities transactions. Requires the Commission to consult with and consider the views of the Secretary of the Treasury, Board of Governors of the Federal Reserve System, and the Commodity Futures Trading Commission, prior to taking action extending the time frame of its emergency powers unless such consultation is impracticable in light of the emergency. Grants the Secretary of the Treasury parallel authority to take any action with respect to a matter or action subject to regulation by the Secretary involving a government security or a market therein that the Commission may take with respect to securities transactions or a market therein.