It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange—
(a)(1)
To effect a short sale, or to use or employ any stop-loss order in connection with the purchase or sale, of any security other than a government security, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
(2)
Paragraph (1) of this subsection shall not apply to security futures products.
(b)
11 So in original. Probably should be followed by a comma. To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, or any securities-based swap agreement any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
(c)(1)
To effect, accept, or facilitate a transaction involving the loan or borrowing of securities in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
(2)
section 1813(q) of title 12 Nothing in paragraph (1) may be construed to limit the authority of the appropriate Federal banking agency (as defined in ), the National Credit Union Administration, or any other Federal department or agency having a responsibility under Federal law to prescribe rules or regulations restricting transactions involving the loan or borrowing of securities in order to protect the safety and soundness of a financial institution or to protect the financial system from systemic risk.
section 77q(a) of this titleoRules promulgated under subsection (b) that prohibit fraud, manipulation, or insider trading (but not rules imposing or specifying reporting or recordkeeping requirements, procedures, or standards as prophylactic measures against fraud, manipulation, or insider trading), and judicial precedents decided under subsection (b) and rules promulgated thereunder that prohibit fraud, manipulation, or insider trading, shall apply to security-based swap agreements to the same extent as they apply to securities. Judicial precedents decided under and sections 78i, 78, 78p, 78t, and 78u–1 of this title, and judicial precedents decided under applicable rules promulgated under such sections, shall apply to security-based swap agreements to the same extent as they apply to securities.
Pub. L. 111–203, § 762(d)(3)(B)2010—, which directed amendment of the matter following subsection (b) “by striking ‘(as defined in section 206B of the Gramm-Leach-Bliley Act), in each place that such terms appear’ ”, was executed by striking out “(as defined in section 206B of the Gramm-Leach-Bliley Act)” after “security-based swap agreements” in two places in concluding provisions following subsec. (c) to reflect the probable intent of Congress.
Pub. L. 111–203, § 929L(2)Subsec. (a)(1). , substituted “other than a government security” for “registered on a national securities exchange”.
Pub. L. 111–203, § 762(d)(3)(A)Subsec. (b). , struck out “(as defined in section 206B of the Gramm-Leach-Bliley Act),” after “securities-based swap agreement”.
Pub. L. 111–203, § 984(a)Subsec. (c). , which directed amendment of this section by adding subsec. (c) at the end, was executed by adding subsec. (c) after subsec. (b) to reflect the probable intent of Congress.
Pub. L. 106–554, § 1(a)(5) [title III, § 303(d)(1)]Subsec. (b). , inserted “or any securities-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act),” before “any manipulative or deceptive device”.
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Pub. L. 111–203section 4 of Pub. L. 111–203Amendment by sections 929L(2) and 984(a) of effective 1 day after , except as otherwise provided, see , set out as an Effective Date note under section 5301 Title 12, Banks and Banking.
“Not later than 2 years after the date of enactment of this Act [], the Commission shall promulgate rules that are designed to increase the transparency of information available to brokers, dealers, and investors, with respect to the loan or borrowing of securities.”
15 U.S.C. 78j(b)“Members of Congress and employees of Congress are not exempt from the insider trading prohibitions arising under the securities laws, including section 10(b) of the Securities Exchange Act of 1934 [] and Rule 10b–5 thereunder.”
15 U.S.C. 78j(b)“Executive branch employees, judicial officers, and judicial employees are not exempt from the insider trading prohibitions arising under the securities laws, including section 10(b) of the Securities Exchange Act of 1934 [] and Rule 10b–5 thereunder.”
, , , provided that:
section 2 of Pub. L. 112–105section 13101 of Title 5[For definitions of “executive branch employees”, “judicial officers”, and “judicial employees”, see , set out as a Definitions note under , Government Organization and Employees.]
Executive Documents
Transfer of Functions
64 Stat. 1265section 78d of this titleFor transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. , 15 F.R. 3175, , set out under .