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Sarbanes Oxley
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SEC. 107.
COMMISSION OVERSIGHT OF THE BOARD.
(a) GENERAL OVERSIGHT
RESPONSIBILITY.—The Commission
shall have
oversight and enforcement authority over the
Board,
as provided
in this Act. The provisions of section
17(a)(1) of the
Securities
Exchange Act of 1934 (15 U.S.C. 78q(a)(1)),
and of section
17(b)(1) of
the Securities Exchange Act of 1934 (15 U.S.C.
78q(b)(1))
shall apply
to the Board as fully as if the Board were a
‘‘registered
securities
association’’ for purposes of those sections
17(a)(1) and
17(b)(1).
(b) RULES OF THE BOARD.—
(1) DEFINITION.—In
this section, the term ‘‘proposed rule’’
means any
proposed rule of the Board, and any
modification
of any such
rule.
(2) PRIOR APPROVAL
REQUIRED.—No rule of the Board
shall
become
effective without prior approval of the
Commission in
accordance
with this section, other than as provided in
section
103(a)(3)(B)
with respect to initial or transitional
standards.
H. R. 3763—22
(3) APPROVAL
CRITERIA.—The Commission shall
approve
a proposed
rule, if it finds that the rule is consistent
with
the
requirements of this Act and the securities
laws, or is
necessary or
appropriate in the public interest or for the
protection
of investors.
(4) PROPOSED RULE
PROCEDURES.—The provisions of
paragraphs
(1) through
(3) of section 19(b) of the Securities
Exchange Act
of 1934 (15 U.S.C. 78s(b)) shall govern the
proposed
rules of the
Board, as fully as if the Board were a
‘‘registered
securities association’’ for purposes of that
section
19(b), except
that, for purposes of this paragraph—
(A) the
phrase ‘‘consistent with the requirements of
this title
and the rules and regulations thereunder
applicable to
such organization’’ in section 19(b)(2) of
that
Act shall be
deemed to read ‘‘consistent with the
requirements
of title I of
the Sarbanes-Oxley Act of 2002, and
the rules and
regulations issued thereunder applicable to
such
organization, or as necessary or appropriate
in the
public
interest or for the protection of investors’’;
and
(B) the
phrase ‘‘otherwise in furtherance of the
purposes
of this
title’’ in section 19(b)(3)(C) of that Act
shall
be deemed to
read ‘‘otherwise in furtherance of the
purposes
of title I of
the Sarbanes-Oxley Act of 2002’’.
(5) COMMISSION AUTHORITY TO AMEND RULES OF THE
BOARD.—The
provisions of section 19(c) of the Securities
Exchange Act
of 1934 (15 U.S.C. 78s(c)) shall govern the
abrogation,
deletion, or
addition to portions of the rules of the Board
by the
Commission as fully as if the Board were a
‘‘registered
securities
association’’ for purposes of that section
19(c), except
that the
phrase ‘‘to conform its rules to the
requirements of
this title
and the rules and regulations thereunder
applicable
to such
organization, or otherwise in furtherance of
the purposes
of this
title’’ in section 19(c) of that Act shall,
for purposes
of this
paragraph, be deemed to read ‘‘to assure the
fair
administration of the Public Company
Accounting Oversight
Board,
conform the rules promulgated by that Board to
the
requirements
of title I of the Sarbanes-Oxley Act of 2002,
or otherwise
further the purposes of that Act, the
securities
laws, and the
rules and regulations thereunder applicable to
that Board’’.
(c) COMMISSION REVIEW OF DISCIPLINARY ACTION
TAKEN BY
THE BOARD.—
(1) NOTICE OF
SANCTION.—The Board shall promptly
file
notice with
the Commission of any final sanction on any
registered
public
accounting firm or on any associated person
thereof, in
such form and containing such information as
the
Commission,
by rule, may prescribe.
(2) REVIEW OF
SANCTIONS.—The provisions of
sections
19(d)(2) and
19(e)(1) of the Securities Exchange Act of
1934
(15 U.S.C.
78s (d)(2) and (e)(1)) shall govern the review
by
the
Commission of final disciplinary sanctions
imposed by the
Board
(including sanctions imposed under section
105(b)(3) of
this Act for
noncooperation in an investigation of the
Board),
as fully as
if the Board were a self-regulatory
organization
and the
Commission were the appropriate regulatory
agency
for such
organization for purposes of those sections
19(d)(2)
and 19(e)(1),
except that, for purposes of this paragraph—
H. R. 3763—23
(A) section
105(e) of this Act (rather than that section
19(d)(2))
shall govern the extent to which application
for,
or
institution by the Commission on its own
motion of,
review of any
disciplinary action of the Board operates
as a stay of
such action;
(B)
references in that section 19(e)(1) to
‘‘members’’
of such an
organization shall be deemed to be references
to registered
public accounting firms;
(C) the
phrase ‘‘consistent with the purposes of this
title’’ in
that section 19(e)(1) shall be deemed to read
‘‘consistent
with the
purposes of this title and title I of the
Sarbanes-Oxley Act of 2002’’;
(D)
references to rules of the Municipal
Securities Rulemaking
Board in that
section 19(e)(1) shall not apply; and
(E) the
reference to section 19(e)(2) of the
Securities
Exchange Act
of 1934 shall refer instead to section
107(c)(3)
of this Act.
(3) COMMISSION
MODIFICATION AUTHORITY.—The
Commission
may enhance,
modify, cancel, reduce, or require the
remission
of a sanction
imposed by the Board upon a registered
public
accounting firm or associated person thereof,
if the
Commission,
having due regard for the public interest and
the
protection of investors, finds, after a
proceeding in accordance
with this
subsection, that the sanction—
(A) is not
necessary or appropriate in furtherance of
this Act or
the securities laws; or
(B) is
excessive, oppressive, inadequate, or
otherwise
not
appropriate to the finding or the basis on
which the
sanction was
imposed.
(d) CENSURE OF THE BOARD; OTHER SANCTIONS.—
(1) RESCISSION OF
BOARD AUTHORITY.—The Commission,
by rule,
consistent with the public interest, the
protection of
investors,
and the other purposes of this Act and the
securities
laws, may
relieve the Board of any responsibility to
enforce
compliance
with any provision of this Act, the securities
laws,
the rules of
the Board, or professional standards.
(2) CENSURE OF THE
BOARD; LIMITATIONS.—The Commission
may, by
order, as it determines necessary or
appropriate in
the public
interest, for the protection of investors, or
otherwise
in
furtherance of the purposes of this Act or the
securities
laws, censure
or impose limitations upon the activities,
functions,
and
operations of the Board, if the Commission
finds,
on the
record, after notice and opportunity for a
hearing, that
the Board—
(A) has
violated or is unable to comply with any
provision
of this Act,
the rules of the Board, or the securities
laws; or
(B) without
reasonable justification or excuse, has
failed to
enforce compliance with any such provision or
rule, or any
professional standard by a registered public
accounting
firm or an associated person thereof.
(3) CENSURE OF BOARD MEMBERS; REMOVAL FROM
OFFICE.—
The
Commission may, as necessary or appropriate in
the public
interest, for
the protection of investors, or otherwise in
furtherance
of the
purposes of this Act or the securities laws,
remove
from office
or censure any member of the Board, if the
Commission
finds, on the
record, after notice and opportunity for a
hearing, that
such member—
(A) has
willfully violated any provision of this Act,
the rules of
the Board, or the securities laws;
(B) has
willfully abused the authority of that member;
or
(C) without
reasonable justification or excuse, has
failed to
enforce compliance with any such provision or
rule, or any
professional standard by any registered public
accounting
firm or any associated person thereof.
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