Evening star., 1934-07-15
SECURITIES GROUP
TOPLAN DIVISIONS
Personnel Win Be Assem-.
bled as New Commission
90 Work Progresses.


new stock market regulatory Law
win form the immediate task for the
Securities and Exchange Commission
this coming week
"A the plan takes shape. personnel
win be assembled. The preparation
aoi' rules and regulations viii get un-
der way as soon as a chief counsel
and other officials are selected. The
regulations must be isseud before
September /, when the registration
provisions applying TO exchanges and
securities are effective.
Experience Of different members Of
the commission qualities them for
particular duties in connection with
its activities.
Robert t. Hesly who as chief
counsel Of the FEDERAL Trade Com
mission directed It's public utility in
vestigation and had occasion TO pro-
test against the inadequacy Of ac-
counting methoos, will devote his at
tention TO the corporate reporting
sections OF the new law. In hearings
before both House and Senate cona-
mittees during the consideration os
the stock market ball, Healy urged
the need Of plenty of teeth in the sec
tions authorizing the commission TO
require corporations listing securities
on stock exchanges to make such
periodical reports as may be deemed
desirable. II was these sections which
aroused considerable opposition from
business interests on the ground that
the commission might attempt under
such authority TO interfere with the
sdairs Of corporations
Special Section Work.
II is understood q special section of
an exchange division of the commits
Sion will deal with the administration
OF the corporate reporting and related
provisions Of the law. This section
presumably viii concern itself with
the issuers Of securities, their directors,
officers and principal stockholders and
with matters relating to proxies of
corporation stockholders. Under sec
ton l3, the corporate reporting sec
ton, every issuer of a security regis
tered on a national securities exchange
must file with the commission such
information and documents as may
be required TO keep up to date the in
formation and documents filed in
connection with registration and such
annual and quarterly reports as the
commission may require.
There may be special section of
the exchange division to deal with
the registration and supervision of
exchanges, another section to handle
the registration of securities and still
another section to have immediate
charge Of the registration and limita-
ton Of the functions of members,
brokers and dealers and the matter of
business practices.
Rules for the registration of eY-
changes must be drawn up. ForIas
must be prepared for applications and
questionnaires. After registration
commences applications of the ex-
changes must be passed upon. There
must be some method of policing the
exchanges to insure compliance with
regulations. The question of the rules
of the exchanges also must be consid-
cred with a view to the classi ification
of members and methods of election
of officers and committees. The ex-
change rules also involve the slspen-
sion, expulsion and disciplining of
members. The commission is under
instructions in the law to report to
Congress on exchange rules before
January 3, 1885.
Drawing Of Regulations.
Initial rules and regulations for the
registration of securities must be
drawn up. One of the related ques-
tions will be a study which the COM
mission must make on trading in un-
listed securities upon exchanges, a re-
port on which must be submitted to
Congress by January 3, 1896.
In connection with the section
which will have to do with members,
brokers and dealers. report must be
submitted TO Congress by January ),
1886 on the feasibility and advisable |
ity OF the complete segregation of the
functions OF dealers and brokers.
The division of the commission, be-
sides an exchange division, will in
clude a securities division, which will |
have immediate charge of the admin |
istration of the securities act, which |
will be shifted from the Federal Trade |
Commission about September /, a
legal division ana perhaps special di-
visions heading up in the Offices of a
secretary and comptroller.
James NJ. Lands and George c. |
Mathews, who were chiefly concerned
with the administration of the securi-
ties act as members of the Federal
Trade Commission. are more familiar
with that part of the new commits
Slon'S activities than any Of the other
three members. II is expected that
Mr. Lands will devote himself at the
start primarily TO matters in connec-
tlon with the supervision OF stock
exchanges which probably means that
Mr.. Mathews will deal chiefly with
administration of the securities act
Duties of Pecora.
Ferdinand Pecora, who, as counsel
for the Senate Banking and Currency
Committees stock market investiga-
ton. had occasion to dig up evidence
relative 10 practices which are con-
demned in the new law or which the
commission Is given power TO prohibit
or regulate, Will be closely concerned
with rules and regulations applying
TO the exchanges. 1t is assumed that
either Mr.. Pecora or Mr. Healy will
have charge of the legal division.
Joseph P. Kennedy. chairman of
the commission. will have general ad-
miniStratlve authority over all Givis-
ions He may also have immediate
supervision over such divisions as
those which include the Offices Of
the secretary and controller or what
ever may be the title of the Official
who collects fees and panaltieS. acts
as custodian Of funds and has charge
OF auditing activities