§ 19.121. Disciplinary proceedings.

1,088 words·~5 min read·/us/cfr/t12/s§ 19.121·

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(a)Scope—(1) In general. Except as provided in this section, subpart A of this part applies to proceedings by the Comptroller to determine whether, pursuant to authority contained in sections 15B(c)(5), 15C(c)(2)(A), 17A(c)(3), and 17A(c)(4)(C) of the Exchange Act (15 U.S.C. 78o-4(c)(5), 78o-5(c)(2)(A), 78q-1(c)(3)(A), and 78q-1(c)(4)(C)), to take disciplinary action against the following:

(i)A bank that is a municipal securities dealer, any person associated with a bank that is a municipal securities dealer, or any person seeking to become associated with a bank that is a municipal securities dealer;

(ii)A bank that is a government securities broker or government securities dealer, any person associated with a bank that is a government securities broker or government securities dealer, or any person seeking to become associated with a government securities broker or government securities dealer; or

(iii)A bank that is a transfer agent, any person associated with a bank that is a transfer agent, or any person seeking to become associated with a bank that is a transfer agent.

(2)Other actions. In addition to the issuance of disciplinary orders after opportunity for hearing, the Comptroller may issue and serve any notices and temporary or permanent cease-and-desist orders and take any actions that are authorized by section 8 of the FDIA (12 U.S.C. 1818); sections 15B(c)(5), 15C(c)(2)(B), and 17A(d)(2) of the Exchange Act (15 U.S.C. 78o-4(c)(5), 78o-5(c)(2)(B), and 78q-1(d)(2)); and other sections of this part against the following:

(i)The parties listed in paragraph (a)(1) of this section; and

(ii)A bank that is a clearing agency.

(3)Definitions. As used in this section:

(i)The term bank means a national bank or Federal savings association, and, when referring to a government securities broker or government securities dealer, a Federal branch or agency of a foreign bank;

(ii)The terms transfer agent, municipal securities dealer, government securities broker, and government securities dealer have the same meaning as the terms in sections 3(a)(25), 3(a)(30), 3(a)(43), and 3(a)(44) of the Exchange Act (15 U.S.C. 78c(a)(25), 78c(a)(30), 78c(a)(43), and 78c(a)(44)), respectively;

(iii)The terms person associated with a bank that is a municipal securities dealer and person associated with a municipal securities dealer have the same meaning as person associated with a municipal securities dealer in section 3(a)(32) of the Exchange Act (15 U.S.C. 78c(a)(32));

(iv)The terms person associated with a bank that is a government securities broker or government securities dealer and person associated with a government securities broker or government securities dealer have the same meaning as person associated with a government securities broker or government securities dealer in section 3(a)(45) of the Exchange Act (15 U.S.C. 78c(a)(45)); and

(v)The terms person associated with a bank that is a transfer agent and person associated with a transfer agent have the same meaning as person associated with a transfer agent in section 3(a)(49) of the Exchange Act (15 U.S.C. 78c(a)(49)).

(4)Preservation of authority. Nothing in this section impairs the powers conferred on the Comptroller by other provisions of law.

(b)Notice of charges and answer—(1) In general. Proceedings are commenced when the Comptroller serves a notice of charges on a bank or associated person. The notice must indicate the type of disciplinary action being contemplated and the grounds therefor and fix a date, time, and place for hearing. The hearing must be set for a date at least 30 days after service of the notice. A respondent served with a notice of charges may file an answer as prescribed in § 19.19. Any respondent who fails to appear at a hearing personally or by a duly authorized representative is deemed to have consented to the issuance of a disciplinary order.

(2)Public basis of proceedings; private hearings. All proceedings under this section must be commenced, and the notice of charges must be filed, on a public basis unless otherwise ordered by the Comptroller. Pursuant to § 19.33(a), a request for a private hearing may be filed within 20 days of service of the notice.

(c)Disciplinary orders—(1) Service of order; content. In the event of consent, or if on the record filed by the ALJ, the Comptroller finds that any act or omission or violation specified in the notice of charges has been established, the Comptroller may serve on the bank or persons concerned a disciplinary order, as provided in the Exchange Act. The order may:

(i)Censure; limit the activities, functions, or operations of; or suspend or revoke the registration of a bank that is a municipal securities dealer;

(ii)Censure, suspend, or bar any person associated with a municipal securities dealer or seeking to become a person associated with a municipal securities dealer;

(iii)Censure; limit the activities, functions, or operations of; or suspend or bar a bank that is a government securities broker or government securities dealer;

(iv)Censure; limit the activities, functions, or operations of; or suspend or bar any person associated with or seeking to become a person associated with a government securities broker or government securities dealer;

(v)Deny registration to; limit the activities, functions, or operations of; or suspend or revoke the registration of a bank that is a transfer agent; or

(vi)Censure, limit the activities or functions of, or suspend or bar any person associated with a transfer agent or seeking to become a person associated with a transfer agent.

(2)Effective date of order. A disciplinary order is effective when served on the respondent or respondents involved and remains effective and enforceable until it is stayed, modified, terminated, or set aside by action of the Comptroller or a reviewing court.

(d)Applications for stay or review of disciplinary actions imposed by registered clearing agencies—(1) Stays. The rules adopted by the Securities and Exchange Commission

(SEC)pursuant to section 19 of the Exchange Act (15 U.S.C. 78s) regarding applications by persons for whom the SEC is the appropriate regulatory agency for stays of disciplinary sanctions or summary suspensions imposed by registered clearing agencies (17 CFR 240.19d-2) apply to applications by banks. References to the “Commission” are deemed to refer to the “OCC.”

(2)Reviews. The regulations adopted by the SEC pursuant to section 19 of the Exchange Act (15 U.S.C. 78s) regarding applications by persons for whom the SEC is the appropriate regulatory agency for reviews of final disciplinary sanctions, denials of participation, or prohibitions or limitations of access to services imposed by registered clearing agencies (17 CFR 240.19d-3(a) through (f)) apply to applications by banks. References to the “Commission” are deemed to refer to the “OCC.”

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