108TH CONGRESS
1ST SESSION
H. R. 657
AN ACT
To amend the Securities Exchange Act of 1934 to
augment the emergency authority of the Securi-
ties and Exchange Commission.
108TH CONGRESS
1ST SESSION
H. R. 657
AN ACT
To amend the Securities Exchange Act of 1934 to augment
the emergency authority of the Securities and Exchange
Commission.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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 Commis-
sion, in an emergency, may by order summarily take
such action to alter, supplement, suspend, or impose
requirements or restrictions with respect to any mat-
ter or action subject to regulation by the Commis-
sion or a self-regulatory organization under the secu-
rities laws, as the Commission determines is nec-
essary in the public interest and for the protection
of investors—
‘‘(i) to maintain or restore fair and orderly
securities markets (other than markets in ex-
empted securities);
‘‘(ii) to ensure prompt, accurate, and safe
clearance and settlement of transactions in se-
curities (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 ex-
empted securities), investment companies, or
any other significant portion or segment of such
markets, or (II) the transmission or processing
of securities transactions (other than trans-
actions 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 Com-
mission’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) con-
tinue in effect for more than 90 calendar days.
‘‘(D) If the actions described in subparagraph
(A) involve a security futures product, the Commis-
sion shall consult with and consider the views of the
Commodity Futures Trading Commission. In exer-
cising its authority under this paragraph, the Com-
mission shall not be required to comply with the pro-
visions 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 exempt-
ed securities (and markets therein) from the Com-
mission’s authority under subparagraph (A), the
Commission may use such authority to take action
to alter, supplement, suspend, or impose require-
ments or restrictions with respect to clearing agen-
cies 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 ac-
tion described in paragraph (1)(B), the Commission
shall consult with and consider the views of the Sec-
retary of the Treasury, Board of Governors of the
Federal Reserve System, and the Commodity Fu-
tures 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 char-
acterized by or constituting—
‘‘(I) sudden and excessive fluc-
tuations 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 set-
tlement of transactions in securities,
or a substantial threat thereof; or
‘‘(ii) a major disturbance that sub-
stantially disrupts, or threatens to substan-
tially disrupt—
‘‘(I) the functioning of securities
markets, investment companies, or
any other significant portion or seg-
ment of the securities markets; or
‘‘(II) the transmission or proc-
essing of securities transactions.
‘‘(B) SECURITIES LAWS.—Notwithstanding
section 3(a)(47), for purposes of this sub-
section, the term ‘securities laws’ does not in-
clude 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 gov-
ernment security or a market therein (or significant por-
tion 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)