I 

108TH CONGRESS 

1ST SESSION H. R. 657

To amend the Securities Exchange Act of 1934 to augment the emergency 

authority of the Securities and Exchange Commission. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 11, 2003

Mr. GARRETT of New Jersey (for himself, Mr. OXLEY, Mr. BAKER, Mr. 

FRANK of Massachusetts, Mr. KANJORSKI, and Mr. EMANUEL) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL

To amend the Securities Exchange Act of 1934 to augment 

the emergency authority of the Securities and Exchange 

Commission.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Emergency Securities 

5 Response Act of 2003’’. 
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1 SEC. 2. EXTENSION OF EMERGENCY ORDER AUTHORITY OF 

2 THE SECURITIES EXCHANGE COMMISSION. 

3 (a) EXTENSION OF AUTHORITY.—Paragraph (2) of 

4 section 12(k) of the Securities Exchange Act of 1934 (15 

5 U.S.C. 78l(k)(2)) is amended to read as follows: 

6 ‘‘(2) EMERGENCY ORDERS.—(A) The Commis7 sion, in an emergency, may by order summarily take 

8 such action to alter, supplement, suspend, or impose 

9 requirements or restrictions with respect to any mat10 ter or action subject to regulation by the Commis11 sion or a self-regulatory organization under the secu12 rities laws, as the Commission determines is nec13 essary in the public interest and for the protection 

14 of investors—

15 ‘‘(i) to maintain or restore fair and orderly 

16 securities markets (other than markets in ex17 empted securities); 

18 ‘‘(ii) to ensure prompt, accurate, and safe 

19 clearance and settlement of transactions in se20 curities (other than exempted securities); or 

21 ‘‘(iii) to reduce, eliminate, or prevent the 

22 substantial disruption by the emergency of (I) 

23 securities markets, investment companies, or 

24 any other significant portion or segment of such 

25 markets, or (II) the transmission or processing 

26 of securities transactions. 
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1 ‘‘(B) An order of the Commission under this 

2 paragraph (2) shall continue in effect for the period 

3 specified by the Commission, and may be extended. 

4 Except as provided in subparagraph (C), the Com5 mission’s action may not continue in effect for more 

6 than 30 business days, including extensions. If the 

7 actions described in subparagraph (A) involve a se8 curity futures product, the Commission shall consult 

9 with and consider the views of the Commodity Fu10 tures Trading Commission. In exercising its author11 ity under this paragraph, the Commission shall not 

12 be required to comply with the provisions of section 

13 553 of title 5, United States Code, or with the provi14 sions of section 19(c) of this title. 

15 ‘‘(C) An order of the Commission under this 

16 paragraph (2) may be extended to continue in effect 

17 for more than 30 business days if, at the time of the 

18 extension, the Commission finds that the emergency 

19 still exists and determines that the continuation of 

20 the order beyond 30 business days is necessary in 

21 the public interest and for the protection of investors 

22 to attain an objective described in clause (i), (ii), or 

23 (iii) of subparagraph (A). In no event shall an order 

24 of the Commission under this paragraph (2) con25 tinue in effect for more than 90 calendar days.’’. 
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1 (b) DEFINITION OF EMERGENCY.—Paragraph (6) of 

2 section 12(k) of the Securities Exchange Act of 1934 (15 

3 U.S.C. 78l(k)(6)) is amended to read as follows: 

4 ‘‘(6) DEFINITIONS.—

5 ‘‘(A) EMERGENCY.—For purposes of this 

6 subsection, the term ‘emergency’ means—

7 ‘‘(i) a major market disturbance char8 acterized by or constituting—

9 ‘‘(I) sudden and excessive fluc10 tuations of securities prices generally, 

11 or a substantial threat thereof, that 

12 threaten fair and orderly markets; or 

13 ‘‘(II) a substantial disruption of 

14 the safe or efficient operation of the 

15 national system for clearance and set16 tlement of transactions in securities, 

17 or a substantial threat thereof; or 

18 ‘‘(i) a major disturbance that substan19 tially disrupts, or threatens to substantially 

20 disrupt—

21 ‘‘(I) the functioning of securities 

22 markets, investment companies, or 

23 any other significant portion or seg24 ment of the securities markets; or 
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1 ‘‘(II) the transmission or proc2 essing of securities transactions. 

3 ‘‘(B) SECURITIES LAWS.—Notwithstanding 

4 section 3(a)(47), for purposes of this sub5 section, the term ‘securities laws’ does not in6 clude the Public Utility Holding Company Act 

7 of 1935 (15 U.S.C. 79a et seq.).’’.

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