IB 

Union Calendar No. 13

108TH CONGRESS 

1ST SESSION H. R. 657

[Report No. 108–19] 

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 

FEBRUARY 25, 2003

Committed to the Committee of the Whole House on the State of the Union 

and ordered to be printed 

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, 
2

•HR 657 RH 

1 SECTION 1. SHORT TITLE. 

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

3 Response Act of 2003’’. 

4 SEC. 2. EXTENSION OF EMERGENCY ORDER AUTHORITY OF 

5 THE SECURITIES EXCHANGE COMMISSION. 

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

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

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

9 ‘‘(2) EMERGENCY ORDERS.—(A) The Commis10 sion, in an emergency, may by order summarily take 

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

12 requirements or restrictions with respect to any mat13 ter or action subject to regulation by the Commis14 sion or a self-regulatory organization under the secu15 rities laws, as the Commission determines is nec16 essary in the public interest and for the protection 

17 of investors—

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

19 securities markets (other than markets in ex20 empted securities); 

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

22 clearance and settlement of transactions in se23 curities (other than exempted securities); or 

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

25 substantial disruption by the emergency of (I) 

26 securities markets, investment companies, or 
3

•HR 657 RH 

1 any other significant portion or segment of such 

2 markets, or (II) the transmission or processing 

3 of securities transactions. 

4 ‘‘(B) An order of the Commission under this 

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

6 specified by the Commission, and may be extended. 

7 Except as provided in subparagraph (C), the Com8 mission’s action may not continue in effect for more 

9 than 30 business days, including extensions. If the 

10 actions described in subparagraph (A) involve a se11 curity futures product, the Commission shall consult 

12 with and consider the views of the Commodity Fu13 tures Trading Commission. In exercising its author14 ity under this paragraph, the Commission shall not 

15 be required to comply with the provisions of section 

16 553 of title 5, United States Code, or with the provi17 sions of section 19(c) of this title. 

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

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

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

21 extension, the Commission finds that the emergency 

22 still exists and determines that the continuation of 

23 the order beyond 30 business days is necessary in 

24 the public interest and for the protection of investors 

25 to attain an objective described in clause (i), (ii), or 
4

•HR 657 RH 

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

2 of the Commission under this paragraph (2) con3 tinue in effect for more than 90 calendar days.’’. 

4 (b) DEFINITION OF EMERGENCY.—Paragraph (6) of 

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

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

7 ‘‘(6) DEFINITIONS.—

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

9 subsection, the term ‘emergency’ means—

10 ‘‘(i) a major market disturbance char11 acterized by or constituting—

12 ‘‘(I) sudden and excessive fluc13 tuations of securities prices generally, 

14 or a substantial threat thereof, that 

15 threaten fair and orderly markets; or 

16 ‘‘(II) a substantial disruption of 

17 the safe or efficient operation of the 

18 national system for clearance and set19 tlement of transactions in securities, 

20 or a substantial threat thereof; or 

21 ‘‘(i) a major disturbance that substan22 tially disrupts, or threatens to substantially 

23 disrupt—

24 ‘‘(I) the functioning of securities 

25 markets, investment companies, or 
5

•HR 657 RH 

1 any other significant portion or seg2 ment of the securities markets; or 

3 ‘‘(II) the transmission or proc4 essing of securities transactions. 

5 ‘‘(B) SECURITIES LAWS.—Notwithstanding 

6 section 3(a)(47), for purposes of this sub7 section, the term ‘securities laws’ does not in8 clude the Public Utility Holding Company Act 

9 of 1935 (15 U.S.C. 79a et seq.).’’. 
Union Calendar No. 13

108TH CONGRESS 

1ST SESSION H. R. 657

[Report No. 108–19] 

A BILL

To amend the Securities Exchange Act of 1934 to 

augment the emergency authority of the Securities and Exchange Commission. 

FEBRUARY 25, 2003

Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed