Delegation of Authority to Approve Suspension

of Securities leading on a National Market

T he President is authorized by the general delegation authority in 3 U .S.C . § 301 to delegate to the 

Secretary of the Treasury his authority to approve the suspension of securities trading by the 

Securities and Exchange Commission under § 12(k) of the Securities Act of 1934, since nothing in 

that section affirm atively prohibits delegation or specifically designates another officer to receive 

delegation of the function.

N othing in the legislative history of § 12(k) suggests that Congress expected the President to exercise 

his approval authority personally. Indeed, Congress may have felt it necessary to make explicit the 

§ 12(k) approval authority at all only because of the independence otherwise given the SEC. Thus 

the congressional intent could have been simply to give the President the option, which he might 

not otherw ise have enjoyed, to supervise the agency’s decisions in this im portant area.

June 23, 1982

MEMORANDUM OPINION FOR THE DEPUTY COUNSEL 

TO THE PRESIDENT

You have requested the views of this Office regarding the President’s power to 

delegate to the Secretary of the Treasury his responsibility, under § 12(k) of the 

Securities Exchange Act of 1934, 15 U.S.C. § 78/(k) (1982) (the Act), to 

approve the agency’s summary suspension of securities trading on a national 

market for periods of up to 90 days.' For the reasons set forth below, we conclude 

that the President may delegate his § 12(k) approval authority to the Secretary of 

the Treasury.2

The President is generally authorized under 3 U.S.C. § 301 to delegate 

functions to “ the head of any department or agency in the executive branch,” 3

1 Section 12(k) provides in pertinent part as follows

If in its opinion the public interest and the protection of investors so require, the Commission is 

authonzed summarily to suspend trading in any security (other than an exempted security) for a 

period not exceeding ten days, or with the approval c f the President, summarily to suspend all

trading on any national securities exchange or otherwise, in securities other than exempted

securities, fo r a period not exceeding ninety days. (Emphasis added )

2 We have not considered the legal issues raised by delegation to other government officials.

3 Section 301 provides in full*

The President of the United States is authonzed to designate and empower the head of any 

department or agency in the executive branch, or any official thereof who is required to be appointed 

by and with the advice and consent of the Senate, to perform without approval, ratification, or other 

action by the President (1) any function which is vested in the President by law, or (2) any function 

which such officer is required or authorized by law to perform only with or subject to the approval, 

ratification, or other action of the President: Provided, That nothing contained herein shall relieve the 

President of his responsibility in office for the acts of any such head or other official designated by 

him to perform such functions Such designation and authorization shall be in writing, shall be 

published in the Federal Register, shall be subject to such terms, conditions, and limitations as the 

President may deem advisable, and shall be revocable at any time by the President in whole or in 

part.

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including, of course, the Secretary of the Treasury. This general authorization, 

however, is qualified in 3 U.S.C. § 302, which provides that:

The authority conferred by this chapter shall apply to any 

function vested in the President by law if such law does not

affirmatively prohibit delegation c f the perform ance c f such function as herein provided for, or specifically designate the officer or

cfficers to whom it may be delegated. This chapter shall not be 

deemed to limit or derogate from any existing or inherent right of 

the President to delegate the performance of functions vested in 

him by law, and nothing herein shall be deemed to require express 

authorization in any case in which such an official would be 

presumed in law to have acted by authority or direction of the 

President. (Emphasis added.)

The issue, therefore, is whether § 12(k), the law investing the approval 

authority in the President, either “ affirmatively prohibits] delegation” or “ specifically designated] the officer or officers to whom [the function] may be 

delegated.” Nothing in § 12(k) specifically designates a subordinate officer to 

receive delegation of the function. Nor, we believe, does § 12(k) affirmatively 

prohibit delegation.

The category of statutes which affirmatively prohibit delegation is very narrow. Statutes may prohibit delegation either by their terms or by express statements in the legislative history. In addition, in extremely limited circumstances, 

the function involved might be of such fundamental gravity as to render inescapable the conclusion that Congress would not have created the function but for the 

assumption that the President would exercise it personally. Although the congressional purpose underlying § 301 was primarily to relieve the President of 

routine paperwork, the Congress rejected a proposal to limit the delegable 

functions to administrative duties4 and chose instead generally to permit delegation of even sensitive and discretionary matters.5 The bill’s sponsor stated that 

delegation would be permitted except when a function or responsibility was 

“especially imposed by law” upon the President.6

The power to suspend trading on a national market is of course a grave 

responsibility with important economic, political, and diplomatic consequences. 

The Supreme Court has characterized as “ awesome” the narrower authority 

under § 12(k) summarily to suspend trading in a single security for up to 10 days. 

SEC v. Sloan, 436 U.S. 103, 112 (1978). The authority to suspend trading on an 

entire market for up to 90 days is obviously of far greater magnitude.

Nevertheless, § 12(k) does not on its face preclude delegation. Nor have we 

found any indication in the legislative history that Congress would not have 

provided for a market suspension power but for the assumption that the President

4 95 Cong. Rec. 11396 (1949)

5 See 3 U.S C § 303, defining delegable functions to include “ any duty, power, responsibility, authority or 

discretion vested in the President or other officer concerned.”

6 95 Cong. Rec. 11395-96 (1949) (remarks of Rep McCormack). See also id. (“the President’s express duty” ); 

id. at 11396 (“expressly delegated to the President” )

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would personally exercise his approval authority.7 It is significant in this regard 

that Congress established the agency to be relatively free of executive oversight 

or supervision. Congress could well have believed that, without the explicit 

§ 12(k) approval authority, the President would have had no power to disapprove 

the agency’s decision to suspend market trading. The congressional intent could 

have been simply to give the Executive the option, which he might not otherwise 

have enjoyed, to supervise the agency’s decisions in this important area. Such an 

intent would not be frustrated by the President’s determination not to exercise the 

approval power personally but to delegate it elsewhere within the Executive 

Branch, especially to an officer intimately involved with monetary and financial 

matters. Because § 12(k) is silent regarding the President’s authority to delegate 

his approval authority, and because a plausible explanation for a congressional 

decision to vest approval authority in the President exists apart from the possibility that Congress would not have created the suspension power but for the 

assumption that the President would exercise it personally, we conclude that 

§ 12(k) is not a statute that affirmatively prohibits delegation. The President is 

therefore empowered to delegate that authority to the Secretary of the Treasury 

under § 301.

T h e o d o r e B . O l s o n

A ssistant Attorney G eneral

Office c f Legal Counsel

7 Section 12(k) was originally enacted as §§ 15(c)(5) and 19(a)(4) of the Act and was recodified, with 

insubstantial changes, by the Securities Acts Amendments of 1975. 89 Stat. 118