1432 
HR 4173 RFS
the protection of investors. The grant or denial of registra-
tion to such an applicant shall be in accordance with the 
procedures set forth in paragraph (1) of this subsection. 
If the Commission grants such registration, the registra-
tion shall terminate on the 45th day after the effective 
date thereof, unless prior thereto the successor shall, in 
accordance with such rules and regulations as the Com-
mission may prescribe, adopt the application for registra-
tion as its own. 
‘‘(3) Any provision of this title (other than section 
5 and subsection (a) of this section) which prohibits any 
act, practice, or course of business if the mails or any 
means or instrumentality of interstate commerce is used 
in connection therewith shall also prohibit any such act, 
practice, or course of business by any registered municipal 
financial adviser or any person acting on behalf of such 
a municipal financial adviser, irrespective of any use of 
the mails or any means or instrumentality of interstate 
commerce in connection therewith. 
‘‘(4) The Commission, by order, shall censure, place 
limitations on the activities, functions, or operations of, 
suspend for a period not exceeding 12 months, or revoke 
the registration of any municipal financial adviser if it 
finds, on the record after notice and opportunity for hear-
ing, that such censure, placing of limitations, suspension, 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 01432
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
1433 
HR 4173 RFS
or revocation is in the public interest and that such munic-
ipal financial adviser, whether prior or subsequent to be-
coming such, or any person associated with such municipal 
financial adviser, whether prior or subsequent to becoming 
so associated— 
‘‘(A) has willfully made or caused to be made 
in any application for registration or report required 
to be filed with the Commission or with any other 
appropriate regulatory agency under this title, or in 
any proceeding before the Commission with respect 
to registration, any statement which was at the time 
and in the light of the circumstances under which it 
was made false or misleading with respect to any 
material fact, or has omitted to state in any such 
application or report any material fact which is re-
quired to be stated therein; 
‘‘(B) has been convicted within 10 years pre-
ceding the filing of any application for registration 
or at any time thereafter of any felony or mis-
demeanor or of a substantially equivalent crime by 
a foreign court of competent jurisdiction which the 
Commission finds— 
‘‘(i) involves the purchase or sale of any 
security, the taking of a false oath, the making 
of a false report, bribery, perjury, burglary, any 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 01433
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
1434 
HR 4173 RFS
substantially equivalent activity however de-
nominated by the laws of the relevant foreign 
government, or conspiracy to commit any such 
offense; 
‘‘(ii) arises out of the conduct of the busi-
ness of a municipal financial adviser, broker, 
dealer, municipal securities dealer, government 
securities broker, government securities dealer, 
investment adviser, bank, insurance company, 
fiduciary, transfer agent, nationally recognized 
statistical rating organization, foreign person 
performing a function substantially equivalent 
to any of the above, or entity or person required 
to be registered under the Commodity Ex-
change Act (7 U.S.C. 1 et seq.) or any substan-
tially equivalent foreign statute or regulation; 
‘‘(iii) involves the larceny, theft, robbery, 
extortion, forgery, counterfeiting, fraudulent 
concealment, embezzlement, fraudulent conver-
sion, or misappropriation of funds, or securities, 
or substantially equivalent activity however de-
nominated by the laws of the relevant foreign 
government; or 
‘‘(iv) involves the violation of section 152, 
1341, 1342, or 1343 or chapter 25 or 47 of 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 01434
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
1435 
HR 4173 RFS
title 18, United States Code, or a violation of 
a substantially equivalent foreign statute; 
‘‘(C) is permanently or temporarily enjoined by 
order, judgment, or decree of any court of competent 
jurisdiction from acting as a municipal financial ad-
viser, investment adviser, underwriter, broker, deal-
er, municipal securities dealer, government securities 
broker, government securities dealer, transfer agent, 
nationally recognized statistical rating organization, 
foreign person performing a function substantially 
equivalent to any of the above, or entity or person 
required to be registered under the Commodity Ex-
change Act or any substantially equivalent foreign 
statute or regulation, or as an affiliated person or 
employee of any investment company, bank, insur-
ance company, foreign entity substantially equivalent 
to any of the above, or entity or person required to 
be registered under the Commodity Exchange Act or 
any substantially equivalent foreign statute or regu-
lation or from engaging in or continuing any con-
duct or practice in connection with any such activity, 
or in connection with the purchase or sale of any se-
curity; 
‘‘(D) has willfully violated any provision of the 
Securities Act of 1933, the Investment Advisers Act 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 01435
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
1436 
HR 4173 RFS
of 1940, the Investment Company Act of 1940, the 
Commodity Exchange Act, this title, the rules or 
regulations under any of such statutes, or the rules 
of the Municipal Securities Rulemaking Board, or is 
unable to comply with any such provision; 
‘‘(E) has willfully aided, abetted, counseled, 
commanded, induced, or procured the violation by 
any other person of any provision of the Securities 
Act of 1933, the Investment Advisers Act of 1940, 
the Investment Company Act of 1940, the Com-
modity Exchange Act, this title, the rules or regula-
tions under any of such statutes, or the rules of the 
Municipal Securities Rulemaking Board, or has 
failed reasonably to supervise, with a view to pre-
venting violations of the provisions of such statutes, 
rules, and regulations, another person who commits 
such a violation, if such other person is subject to 
his supervision. For the purposes of this subpara-
graph, no person shall be deemed to have failed rea-
sonably to supervise any other person, if— 
‘‘(i) there have been established proce-
dures, and a system for applying such proce-
dures, which would reasonably be expected to 
prevent and detect, insofar as practicable, any 
such violation by such other person; and 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 01436
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
1437 
HR 4173 RFS
‘‘(ii) such person has reasonably dis-
charged the duties and obligations incumbent 
upon him by reason of such procedures and sys-
tem without reasonable cause to believe that 
such procedures and system were not being 
complied with; 
‘‘(F) is subject to any order of the Commission 
barring or suspending the right of the person to be 
associated with a municipal financial adviser; 
‘‘(G) has been found by a foreign financial reg-
ulatory authority to have— 
‘‘(i) made or caused to be made in any ap-
plication for registration or report required to 
be filed with a foreign financial regulatory au-
thority, or in any proceeding before a foreign fi-
nancial regulatory authority with respect to reg-
istration, any statement that was at the time 
and in the light of the circumstances under 
which it was made false or misleading with re-
spect to any material fact, or has omitted to 
state in any application or report to the foreign 
financial regulatory authority any material fact 
that is required to be stated therein; 
‘‘(ii) violated any foreign statute or regula-
tion regarding transactions in securities, or con-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 01437
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS