# Rules on Fair Fund and

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## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

Rules of Practice
and

Rules on Fair Fund and
Disgorgement Plans

U.S. Securities and Exchange Commission
September 2016

COMMISSION RULES OF PRACTICE
Table of Contents
GENERAL RULES ............................................................................................................... 7
Rule 100. Scope of the rules of practice........................................................................................................................ 7
Rule 101. Definitions. ...................................................................................................................................................... 7
Rule 102. Appearance and practice before the Commission..................................................................................... 9
Rule 103. Construction of rules....................................................................................................................................15
Rule 104. Business hours...............................................................................................................................................15
Rule 110. Presiding officer. ...........................................................................................................................................15
Rule 111. Hearing officer: Authority. ..........................................................................................................................16
Rule 112. Hearing officer: Disqualification and withdrawal....................................................................................17
Rule 120. Ex parte communications.............................................................................................................................17
Rule 121. Separation of functions................................................................................................................................18
Rule 140. Commission orders and decisions: Signature and availability................................................................18
Rule 141. Orders and decisions: Service of orders instituting proceedings and other orders and decisions..18
Rule 150. Service of papers by parties.........................................................................................................................21
Rule 151. Filing of papers with the Commission: Procedure..................................................................................22
Rule 152. Filing of papers: Form..................................................................................................................................23
Rule 153. Filing of papers: Signature requirement and effect..................................................................................24
Rule 154. Motions...........................................................................................................................................................25
Rule 155. Default; motion to set aside default...........................................................................................................26
Rule 160. Time computation. .......................................................................................................................................27
Rule 161. Extensions of time, postponements and adjournments.........................................................................27
Rule 180. Sanctions.........................................................................................................................................................29
Rule 190. Confidential treatment of information in certain filings.........................................................................31
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Rule 191. Adjudications not required to be determined on the record after notice and opportunity for
hearing...........................................................................................................................................................31
Rule 192. Rulemaking: Issuance, amendment and repeal of rules of general application...................................32
Rule 193. Applications by barred individuals for consent to associate..................................................................33

INITIATION OF PROCEEDINGS AND PREHEARING RULES ..................................37
Rule 200. Initiation of proceedings..............................................................................................................................37
Rule 201. Consolidation and severance of proceedings. ..........................................................................................38
Rule 202. Specification of procedures by parties in certain proceedings...............................................................39
Rule 210. Parties, limited participants and amici curiae............................................................................................39
Rule 220. Answer to allegations. ..................................................................................................................................43
Rule 221. Prehearing conference..................................................................................................................................44
Rule 222. Prehearing submissions and disclosures....................................................................................................46
Rule 230. Enforcement and disciplinary proceedings: Availability of documents for inspection
and copying........................................................................................................................................................47
Rule 231. Enforcement and disciplinary proceedings: Production of witness statements. ................................51
Rule 232. Subpoenas. .....................................................................................................................................................51
Rule 233. Depositions upon oral examination...........................................................................................................54
Rule 234. Depositions upon written questions..........................................................................................................62
Rule 235. Introducing prior sworn statements or declarations. ..............................................................................62
Rule 240. Settlement.......................................................................................................................................................63
Rule 250. Dispositive motions......................................................................................................................................65

RULES REGARDING HEARINGS ....................................................................................67
Rule 300. Hearings..........................................................................................................................................................67
Rule 301. Hearings to be public. ..................................................................................................................................67
Rule 302. Record of hearings........................................................................................................................................67
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Rule 310. Failure to appear at hearings: Default........................................................................................................68
Rule 320. Evidence: Admissibility................................................................................................................................68
Rule 321. Evidence: Objections and offers of proof................................................................................................68
Rule 322. Evidence: Confidential information, protective orders. .........................................................................69
Rule 323. Evidence: Official notice. ............................................................................................................................70
Rule 324. Evidence: Stipulations..................................................................................................................................70
Rule 325. Evidence: Presentation under oath or affirmation. .................................................................................70
Rule 326. Evidence: Presentation, rebuttal and cross-examination........................................................................70
Rule 340. Proposed findings, conclusions and supporting briefs...........................................................................71
Rule 350. Record in proceedings before hearing officer; retention of documents; copies.................................71
Rule 351. Transmittal of documents to Secretary; record index; certification......................................................72
Rule 360. Initial decision of hearing officer and timing of hearing. ........................................................................73

APPEAL TO THE COMMISSION AND COMMISSION REVIEW .................................76
Rule 400. Interlocutory review. ....................................................................................................................................76
Rule 401. Consideration of stays..................................................................................................................................77
Rule 410. Appeal of initial decisions by hearing officers..........................................................................................79
Rule 411. Commission consideration of initial decisions by hearing officers.......................................................80
Rule 420. Appeal of determinations by self-regulatory organizations....................................................................82
Rule 421. Commission consideration of determinations by self-regulatory organizations..................................83
Rule 430. Appeal of actions made pursuant to delegated authority. ......................................................................83
Rule 431. Commission consideration of actions made pursuant to delegated authority. ...................................84
Rule 440. Appeal of determinations by the Public Company Accounting Oversight Board.............................86
Rule 441. Commission consideration of Board determinations. ............................................................................86
Rule 450. Briefs filed with the Commission...............................................................................................................87
Rule 451. Oral argument before the Commission.....................................................................................................88
Rule 452. Additional evidence. ......................................................................................................................................89
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Rule 460. Record before the Commission..................................................................................................................90
Rule 470. Reconsideration.............................................................................................................................................91
Rule 490. Receipt of petitions for judicial review pursuant to 28 U.S.C. 2112(a)(1). ..........................................91

RULES RELATING TO TEMPORARY ORDERS AND SUSPENSIONS........................92
Rule 500. Expedited consideration of proceedings...................................................................................................92
Rule 510. Temporary cease-and-desist orders: Application process. .....................................................................92
Rule 511. Temporary cease-and-desist orders: Notice; procedures for hearing...................................................93
Rule 512. Temporary cease-and-desist orders: Issuance after notice and opportunity for hearing....................94
Rule 513. Temporary cease-and-desist orders: Issuance without prior notice and opportunity for hearing. ...95
Rule 514. Temporary cease-and-desist orders: Judicial review; duration...............................................................96
Rule 520. Suspension of registration of brokers, dealers, or other Exchange Act-registered entities:
Application. ..................................................................................................................................................96
Rule 521. Suspension of registration of brokers, dealers, or other Exchange Act-registered entities: Notice
and opportunity for hearing on application.............................................................................................97
Rule 522. Suspension of registration of brokers, dealers, or other Exchange Act-registered entities: Issuance
and review of order......................................................................................................................................98
Rule 524. Suspension of registrations: Duration. ......................................................................................................99
Rule 530. Initial decision on permanent order: Timing for submitting proposed findings and preparation of
decision. .........................................................................................................................................................99
Rule 531. Initial decision on permanent order: Effect on temporary order. ..................................................... 100
Rule 540. Appeal and Commission review of initial decision making a temporary order permanent........... 100
Rule 550. Summary suspensions pursuant to Exchange Act Section 12(k)(1)(A)............................................. 101

RULES REGARDING DISGORGEMENT AND PENALTY PAYMENTS .................... 101
Rule 600. Interest on sums disgorged. ..................................................................................................................... 101
Rule 601. Prompt payment of disgorgement, interest and penalties................................................................... 102
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Rule 630. Inability to pay disgorgement, interest or penalties.............................................................................. 102

FORM D-A ......................................................................................................................... 103
Rule 900. Informal procedures and supplementary information concerning adjudicatory proceedings........ 114

FAIR FUND AND DISGORGEMENT PLANS.............................................................. 116
Rule 1100. Creation of Fair Fund. ............................................................................................................................ 116
Rule 1101. Submission of plan of distribution; contents of plan......................................................................... 116
Rule 1102. Provisions for payment........................................................................................................................... 117
Rule 1103. Notice of proposed plan and opportunity for comment by non-parties.......................................... 118
Rule 1104. Order approving, modifying, or disapproving proposed plan. ........................................................ 118
Rule 1105. Administration of plan............................................................................................................................ 118
Rule 1106. Right to challenge. .................................................................................................................................... 119

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GENERAL RULES
Rule 100. Scope of the rules of practice.
(a) Unless provided otherwise, these Rules of Practice govern proceedings before the
Commission under the statutes that it administers.
(b) These rules do not apply to:
(1) Investigations, except where made specifically applicable by the Rules Relating to
Investigations, part 203 of this chapter; or
(2) Actions taken by the duty officer pursuant to delegated authority under 17 CFR
200.43.
(3) Initiation of proceedings for SRO proposed rule changes under (17 CFR 201.700
and 701), except where made specifically applicable therein.
(c) The Commission, upon its determination that to do so would serve the interests of
justice and not result in prejudice to the parties to the proceeding, may by order direct, in a particular
proceeding, that an alternative procedure shall apply or that compliance with an otherwise applicable
rule is unnecessary.
Rule 101. Definitions.
(a) For purposes of these Rules of Practice, unless explicitly stated to the contrary:
(1) Commission means the United States Securities and Exchange Commission, or a
panel of Commissioners constituting a quorum of the Commission, or a single
Commissioner acting as duty officer pursuant to 17 CFR 200.43;
(2) Counsel means any attorney representing a party or any other person representing
a party pursuant to Rule 102(b);
(3) Disciplinary proceeding means an action pursuant to Rule 102(e);
(4) Enforcement proceeding means an action, initiated by an order instituting
proceedings, held for the purpose of determining whether or not a person is about to
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violate, has violated, has caused a violation of, or has aided or abetted a violation of any
statute or rule administered by the Commission, or whether to impose a sanction as defined
in Section 551(10) of the Administrative Procedure Act, 5 U.S.C. 551(10);
(5) Hearing officer means an administrative law judge, a panel of Commissioners
constituting less than a quorum of the Commission, an individual Commissioner, or any
other person duly authorized to preside at a hearing;
(6) Interested division means a division or an office assigned primary responsibility by
the Commission to participate in a particular proceeding;
(7) Order instituting proceedings means an order issued by the Commission commencing
a proceeding or an order issued by the Commission to hold a hearing;
(8) Party means the interested division, any person named as a respondent in an order
instituting proceedings, any applicant named in the caption of any order, persons entitled to
notice in a stop order proceeding as set forth in Rule 200(a)(2) or any person seeking
Commission review of a decision;
(9) Proceeding means any agency process initiated:
(i) By an order instituting proceedings; or
(ii) By the filing, pursuant to Rule 410, of a petition for review of an initial
decision by a hearing officer; or
(iii) By the filing, pursuant to Rule 420, of an application for review of a selfregulatory organization determination; or
(iv) By the filing, pursuant to Rule 430, of a notice of intention to file a petition
for review of a determination made pursuant to delegated authority; or
(v) By the filing, pursuant to Rule 440, of an application for review of a
determination by the Public Company Accounting Oversight Board; or

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(vi) By the filing, pursuant to 17 CFR 242.601, of an application for review of an
action or failure to act in connection with the implementation or operation of any
effective transaction reporting plan; or
(vii) By the filing, pursuant to 17 CFR 242.608, of an application for review of an
action taken or failure to act in connection with the implementation or operation of
any effective national market system plan; or
(viii) By the filing, pursuant to Section 11A(b)(5) of the Securities Exchange Act
of 1934, of an application for review of a determination of a registered securities
information processor;
(10) Secretary means the Secretary of the Commission;
(11) Temporary sanction means a temporary cease-and-desist order or a temporary
suspension of the registration of a broker, dealer, municipal securities dealer, government
securities broker, government securities dealer, or transfer agent pending final determination
whether the registration shall be revoked; and
(12) Board means the Public Company Accounting Oversight Board.
(b) [Reserved]
Rule 102. Appearance and practice before the Commission.
A person shall not be represented before the Commission or a hearing officer except as stated in
paragraphs (a) and (b) of this rule or as otherwise permitted by the Commission or a hearing officer.
(a) Representing oneself. In any proceeding, an individual may appear on his or her own behalf.
(b) Representing others. In any proceeding, a person may be represented by an attorney at law
admitted to practice before the Supreme Court of the United States or the highest court of any State
(as defined in Section 3(a)(16) of the Exchange Act, 15 U.S.C. 78c(a)(16)); a member of a
partnership may represent the partnership; a bona fide officer of a corporation, trust or association
may represent the corporation, trust or association; and an officer or employee of a state

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commission or of a department or political subdivision of a state may represent the state
commission or the department or political subdivision of the state.
(c) Former Commission employees. Former employees of the Commission must comply with the
restrictions on practice contained in the Commission's Conduct Regulation, Subpart M, 17 CFR
200.735.
(d) Designation of address for service; notice of appearance; power of attorney; withdrawal.
(1) Representing oneself. When an individual first makes any filing or otherwise appears on his
or her own behalf before the Commission or a hearing officer in a proceeding as defined in Rule
101(a), he or she shall file with the Commission, or otherwise state on the record, and keep
current, an address at which any notice or other written communication required to be served
upon him or her or furnished to him or her may be sent and a telephone number where he or
she may be reached during business hours.
(2) Representing others. When a person first makes any filing or otherwise appears in a
representative capacity before the Commission or a hearing officer in a proceeding as defined in
Rule 101(a), that person shall file with the Commission, and keep current, a written notice
stating the name of the proceeding; the representative's name, business address and telephone
number; and the name and address of the person or persons represented.
(3) Power of attorney. Any individual appearing or practicing before the Commission in a
representative capacity may be required to file a power of attorney with the Commission
showing his or her authority to act in such capacity.
(4) Withdrawal. Any person seeking to withdraw his or her appearance in a representative
capacity shall file a notice of withdrawal with the Commission or the hearing officer. The notice
shall state the name, address, and telephone number of the withdrawing representative; the
name, address, and telephone number of the person for whom the appearance was made; and
the effective date of the withdrawal. If the person seeking to withdraw knows the name, address,
and telephone number of the new representative, or knows that the person for whom the
appearance was made intends to represent him- or herself, that information shall be included in

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the notice. The notice must be served on the parties in accordance with Rule 150. The notice
shall be filed at least five days before the proposed effective date of the withdrawal.
(e) Suspension and disbarment.
(1) Generally. The Commission may censure a person or deny, temporarily or permanently,
the privilege of appearing or practicing before it in any way to any person who is found by the
Commission after notice and opportunity for hearing in the matter:
(i) Not to possess the requisite qualifications to represent others; or
(ii) To be lacking in character or integrity or to have engaged in unethical or improper
professional conduct; or
(iii) To have willfully violated, or willfully aided and abetted the violation of any
provision of the Federal securities laws or the rules and regulations thereunder.
(iv) With respect to persons licensed to practice as accountants, “improper professional
conduct” under Rule 102(e)(1)(ii) means:
(A) Intentional or knowing conduct, including reckless conduct, that results in a
violation of applicable professional standards; or
(B) Either of the following two types of negligent conduct:
(1) A single instance of highly unreasonable conduct that results in a violation of
applicable professional standards in circumstances in which an accountant knows, or
should know, that heightened scrutiny is warranted.
(2) Repeated instances of unreasonable conduct, each resulting in a violation of
applicable professional standards, that indicate a lack of competence to practice
before the Commission.
(2) Certain professionals and convicted persons. Any attorney who has been suspended or disbarred
by a court of the United States or of any State; or any person whose license to practice as an
accountant, engineer, or other professional or expert has been revoked or suspended in any
State; or any person who has been convicted of a felony or a misdemeanor involving moral
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turpitude shall be forthwith suspended from appearing or practicing before the Commission. A
disbarment, suspension, revocation or conviction within the meaning of this rule shall be
deemed to have occurred when the disbarring, suspending, revoking or convicting agency or
tribunal enters its judgment or order, including a judgment or order on a plea of nolo
contendere, regardless of whether an appeal of such judgment or order is pending or could be
taken.
(3) Temporary suspensions. An order of temporary suspension shall become effective upon
service on the respondent. No order of temporary suspension shall be entered by the
Commission pursuant to paragraph (e)(3)(i) of this rule more than 90 days after the date on
which the final judgment or order entered in a judicial or administrative proceeding described in
paragraph (e)(3)(i)(A) or (e)(3)(i)(B) of this rule has become effective, whether upon completion
of review or appeal procedures or because further review or appeal procedures are no longer
available.
(i) The Commission, with due regard to the public interest and without preliminary
hearing, may, by order, temporarily suspend from appearing or practicing before it any
attorney, accountant, engineer, or other professional or expert who has been by name:
(A) Permanently enjoined by any court of competent jurisdiction, by reason of his or
her misconduct in an action brought by the Commission, from violating or aiding and
abetting the violation of any provision of the Federal securities laws or of the rules and
regulations thereunder; or
(B) Found by any court of competent jurisdiction in an action brought by the
Commission to which he or she is a party or found by the Commission in any
administrative proceeding to which he or she is a party to have violated (unless the
violation was found not to have been willful) or aided and abetted the violation of any
provision of the Federal securities laws or of the rules and regulations thereunder.
(ii) Any person temporarily suspended from appearing and practicing before the
Commission in accordance with paragraph (e)(3)(i) of this rule may, within 30 days after
service upon him or her of the order of temporary suspension, petition the Commission to
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lift the temporary suspension. If no petition has been received by the Commission within 30
days after service of the order, the suspension shall become permanent.
(iii) Within 30 days after the filing of a petition in accordance with paragraph (e)(3)(ii) of
this rule, the Commission shall either lift the temporary suspension, or set the matter down
for hearing at a time and place designated by the Commission, or both, and, after
opportunity for hearing, may censure the petitioner or disqualify the petitioner from
appearing or practicing before the Commission for a period of time or permanently. In every
case in which the temporary suspension has not been lifted, every hearing held and other
action taken pursuant to this paragraph (e)(3) shall be expedited in accordance with Rule
500. If the hearing is held before a hearing officer, the time limits set forth in Rule 540 will
govern review of the hearing officer's initial decision.
(iv) In any hearing held on a petition filed in accordance with paragraph (e)(3)(ii) of this
rule, the staff of the Commission shall show either that the petitioner has been enjoined as
described in paragraph (e)(3)(i)(A) of this rule or that the petitioner has been found to have
committed or aided and abetted violations as described in paragraph (e)(3)(i)(B) of this rule
and that showing, without more, may be the basis for censure or disqualification. Once that
showing has been made, the burden shall be upon the petitioner to show cause why he or
she should not be censured or temporarily or permanently disqualified from appearing and
practicing before the Commission. In any such hearing, the petitioner may not contest any
finding made against him or her or fact admitted by him or her in the judicial or
administrative proceeding upon which the proceeding under this paragraph (e)(3) is
predicated. A person who has consented to the entry of a permanent injunction as described
in paragraph (e)(3)(i)(A) of this rule without admitting the facts set forth in the complaint
shall be presumed for all purposes under this paragraph (e)(3) to have been enjoined by
reason of the misconduct alleged in the complaint.
(4) Filing of prior orders. Any person appearing or practicing before the Commission who has
been the subject of an order, judgment, decree, or finding as set forth in paragraph (e)(3) of this
rule shall promptly file with the Secretary a copy thereof (together with any related opinion or
statement of the agency or tribunal involved). Failure to file any such paper, order, judgment,
decree or finding shall not impair the operation of any other provision of this rule.
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(5) Reinstatement.
(i) An application for reinstatement of a person permanently suspended or disqualified
under paragraph (e)(1) or (e)(3) of this rule may be made at any time, and the applicant may,
in the Commission's discretion, be afforded a hearing; however, the suspension or
disqualification shall continue unless and until the applicant has been reinstated by the
Commission for good cause shown.
(ii) Any person suspended under paragraph (e)(2) of this rule shall be reinstated by the
Commission, upon appropriate application, if all the grounds for application of the
provisions of that paragraph are subsequently removed by a reversal of the conviction or
termination of the suspension, disbarment, or revocation. An application for reinstatement
on any other grounds by any person suspended under paragraph (e)(2) of this rule may be
filed at any time and the applicant shall be accorded an opportunity for a hearing in the
matter; however, such suspension shall continue unless and until the applicant has been
reinstated by order of the Commission for good cause shown.
(6) Other proceedings not precluded. A proceeding brought under paragraph (e)(1), (e)(2) or (e)(3)
of this rule shall not preclude another proceeding brought under these same paragraphs.
(7) Public hearings. All hearings held under this paragraph (e) shall be public unless otherwise
ordered by the Commission on its own motion or after considering the motion of a party.
(f) Practice defined. For the purposes of these Rules of Practice, practicing before the Commission
shall include, but shall not be limited to:
(1) Transacting any business with the Commission; and
(2) The preparation of any statement, opinion or other paper by any attorney, accountant,
engineer or other professional or expert, filed with the Commission in any registration
statement, notification, application, report or other document with the consent of such attorney,
accountant, engineer or other professional or expert.

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Rule 103. Construction of rules.
(a) The Rules of Practice shall be construed and administered to secure the just, speedy, and
inexpensive determination of every proceeding.
(b) In any particular proceeding, to the extent that there is a conflict between these rules and a
procedural requirement contained in any statute, or any rule or form adopted thereunder, the latter
shall control.
(c) For purposes of these rules:
(1) Any term in the singular includes the plural, and any term in the plural includes the
singular, if such use would be appropriate;
(2) Any use of a masculine, feminine, or neuter gender encompasses such other genders as
would be appropriate; and
(3) Unless the context requires otherwise, counsel for a party may take any action required or
permitted to be taken by such party.
Rule 104. Business hours.
The Headquarters office of the Commission, at 100 F Street, NE., Washington, DC 20549, is
open each day, except Saturdays, Sundays, and Federal legal holidays, from 9 a.m. to 5:30 p.m.,
Eastern Standard Time or Eastern Daylight Saving Time, whichever is currently in effect in
Washington, D.C. Federal legal holidays consist of New Year's Day; Birthday of Martin Luther
King, Jr.; Presidents Day; Memorial Day; Independence Day; Labor Day; Columbus Day; Veterans
Day; Thanksgiving Day; Christmas Day; and any other day appointed as a holiday in Washington,
D.C. by the President or the Congress of the United States.
Rule 110. Presiding officer.
All proceedings shall be presided over by the Commission or, if the Commission so orders, by a
hearing officer. When the Commission designates that the hearing officer shall be an administrative
law judge, the Chief Administrative Law Judge shall select, pursuant to 17 CFR 200.30-10, the
administrative law judge to preside.
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Rule 111. Hearing officer: Authority.
The hearing officer shall have the authority to do all things necessary and appropriate to
discharge his or her duties. No provision of these Rules of Practice shall be construed to limit the
powers of the hearing officer provided by the Administrative Procedure Act, 5 U.S.C. 556, 557. The
powers of the hearing officer include, but are not limited to, the following:
(a) Administering oaths and affirmations;
(b) Issuing subpoenas authorized by law and revoking, quashing, or modifying any such
subpoena;
(c) Receiving relevant evidence and ruling upon the admission of evidence and offers of proof;
(d) Regulating the course of a proceeding and the conduct of the parties and their counsel;
(e) Holding prehearing and other conferences as set forth in Rule 221 and requiring the
attendance at any such conference of at least one representative of each party who has authority to
negotiate concerning the resolution of issues in controversy;
(f) Recusing himself or herself upon motion made by a party or upon his or her own motion;
(g) Ordering, in his or her discretion, in a proceeding involving more than one respondent, that
the interested division indicate, on the record, at least one day prior to the presentation of any
evidence, each respondent against whom that evidence will be offered;
(h) Subject to any limitations set forth elsewhere in these Rules of Practice, considering and
ruling upon all procedural and other motions, including a motion to correct a manifest error of fact
in the initial decision. A motion to correct is properly filed under this Rule only if the basis for the
motion is a patent misstatement of fact in the initial decision. Any motion to correct must be filed
within ten days of the initial decision. A brief in opposition may be filed within five days of a motion
to correct. The hearing officer shall have 20 days from the date of filing of any brief in opposition
filed to rule on a motion to correct;
(i) Preparing an initial decision as provided in Rule 360;

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(j) Upon notice to all parties, reopening any hearing prior to the filing of an initial decision
therein, or, if no initial decision is to be filed, prior to the time fixed for the filing of final briefs with
the Commission; and
(k) Informing the parties as to the availability of one or more alternative means of dispute
resolution, and encouraging the use of such methods.
Rule 112. Hearing officer: Disqualification and withdrawal.
(a) Notice of disqualification. At any time a hearing officer believes himself or herself to be
disqualified from considering a matter, the hearing officer shall issue a notice stating that he or she is
withdrawing from the matter and setting forth the reasons therefor.
(b) Motion for withdrawal. Any party who has a reasonable, good faith basis to believe that a
hearing officer has a personal bias, or is otherwise disqualified from hearing a case, may make a
motion to the hearing officer that the hearing officer withdraw. The motion shall be accompanied by
an affidavit setting forth in detail the facts alleged to constitute grounds for disqualification. If the
hearing officer finds himself or herself not disqualified, he or she shall so rule and shall continue to
preside over the proceeding.
Rule 120. Ex parte communications.
(a) Except to the extent required for the disposition of ex parte matters as authorized by law, the
person presiding over an evidentiary hearing may not:
(1) Consult a person or party on a fact in issue, unless on notice and opportunity for all
parties to participate; or
(2) Be responsible to or subject to the supervision or direction of an employee or agent
engaged in the performance of investigative or prosecuting functions for the Commission.
(b) The Commission's code of behavior regarding ex parte communications between persons
outside the Commission and decisional employees, 17 CFR 200.110 through 200.114, governs other
prohibited communications during a proceeding conducted under the Rules of Practice.

17

Rule 121. Separation of functions.
Any Commission officer, employee or agent engaged in the performance of investigative or
prosecutorial functions for the Commission in a proceeding as defined in Rule 101(a) may not, in
that proceeding or one that is factually related, participate or advise in the decision, or in
Commission review of the decision pursuant to Section 557 of the Administrative Procedure Act,
5 U.S.C. 557, except as a witness or counsel in the proceeding.
Rule 140. Commission orders and decisions: Signature and availability.
(a) Signature required. All orders and decisions of the Commission shall be signed by the Secretary
or any other person duly authorized by the Commission.
(b) Availability for inspection. Each order and decision shall be available for inspection by the public
from the date of entry, unless the order or decision is nonpublic. A nonpublic order or decision shall
be available for inspection by any person entitled to inspect it from the date of entry.
(c) Date of entry of orders. The date of entry of a Commission order shall be the date the order is
signed. Such date shall be reflected in the caption of the order, or if there is no caption, in the order
itself.
Rule 141. Orders and decisions: Service of orders instituting proceedings and other orders
and decisions.
(a) Service of an order instituting proceedings.
(1) By whom made. The Secretary, or another duly authorized officer of the Commission, shall
serve a copy of an order instituting proceedings on each person named in the order as a party.
The Secretary may direct an interested division to assist in making service.
(2) How made.
(i) To individuals. Notice of a proceeding shall be made to an individual by delivering a
copy of the order instituting proceedings to the individual or to an agent authorized by
appointment or by law to receive such notice. Delivery means—handing a copy of the order
to the individual; or leaving a copy at the individual's office with a clerk or other person in
charge thereof; or leaving a copy at the individual's dwelling house or usual place of abode
18

with some person of suitable age and discretion then residing therein; or sending a copy of
the order addressed to the individual by U.S. Postal Service certified, registered or Express
Mail and obtaining a confirmation of receipt; or giving confirmed telegraphic notice.
(ii) To corporations or entities. Notice of a proceeding shall be made to a person other than a
natural person by delivering a copy of the order instituting proceedings to an officer,
managing or general agent, or any other agent authorized by appointment or law to receive
such notice, by any method specified in paragraph (a)(2)(i) of this rule, or, in the case of an
issuer of a class of securities registered with the Commission, by sending a copy of the order
addressed to the most recent address shown on the entity's most recent filing with the
Commission by U.S. Postal Service certified, registered, or Express Mail and obtaining a
confirmation of attempted delivery.
(iii) Upon persons registered with the Commission. In addition to any other method of service
specified in paragraph (a)(2) of this rule, notice may be made to a person currently registered
with the Commission as a broker, dealer, municipal securities dealer, government securities
broker, government securities dealer, investment adviser, investment company or transfer
agent by sending a copy of the order addressed to the most recent business address shown
on the person's registration form by U.S. Postal Service certified, registered or Express Mail
and obtaining a confirmation of attempted delivery.
(iv) Upon persons in a foreign country. Notice of a proceeding to a person in a foreign country
may be made by any of the following methods:
(A) Any method specified in paragraph (a)(2) of this rule that is not prohibited by the
law of the foreign country; or
(B) By any internationally agreed means of service that is reasonably calculated to
give notice, such as those authorized by the Hague Convention on the Service Abroad of
Judicial and Extrajudicial Documents; or
(C) Any method that is reasonably calculated to give notice:
(1) As prescribed by the foreign country's law for service in that country in an
action in its courts of general jurisdiction; or
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(2) As the foreign authority directs in response to a letter rogatory or letter of
request; or
(3) Unless prohibited by the foreign country's law, by delivering a copy of the
order instituting proceedings to the individual personally, or using any form of mail
that the Secretary or the interested division addresses and sends to the individual and
that requires a signed receipt; or
(D) By any other means not prohibited by international agreement, as the
Commission or hearing officer orders.
(v) In stop order proceedings. Notwithstanding any other provision of paragraph (a)(2) of this
rule, in proceedings pursuant to Sections 8 or 10 of the Securities Act of 1933, 15 U.S.C. 77h
or 77j, or Sections 305 or 307 of the Trust Indenture Act of 1939, 15 U.S.C. 77eee or 77ggg,
notice of the institution of proceedings shall be made by personal service or confirmed
telegraphic notice, or a waiver obtained pursuant to paragraph (a)(4) of this rule.
(vi) To persons registered with self-regulatory organizations. Notice of a proceeding shall be made
to a person registered with a self-regulatory organization by any method specified in
paragraph (a)(2)(i) of this rule, or by sending a copy of the order addressed to the most
recent address for the person shown in the Central Registration Depository by U.S. Postal
Service certified, registered, or Express Mail and obtaining a confirmation of attempted
delivery.
(3) Record of service. The Secretary shall maintain a record of service on parties (in hard copy or
computerized format), identifying the party given notice, the method of service, the date of
service, the address to which service was made, and the person who made service. If a division
serves a copy of an order instituting proceedings, the division shall file with the Secretary either
an acknowledgement of service by the person served or proof of service consisting of a
statement by the person who made service certifying the date and manner of service; the names
of the persons served; and their mail or electronic addresses, facsimile numbers, or the addresses
of the places of delivery, as appropriate for the manner of service. If service is made in person,
the certificate of service shall state, if available, the name of the individual to whom the order
was given. If service is made by U.S. Postal Service certified or Express Mail, the Secretary shall
20

maintain the confirmation of receipt or of attempted delivery, and tracking number. If service is
made to an agent authorized by appointment to receive service, the certificate of service shall be
accompanied by evidence of the appointment.
(4) Waiver of service. In lieu of service as set forth in paragraph (a)(2) of this rule, the party
may be provided a copy of the order instituting proceedings by first class mail or other reliable
means if a waiver of service is obtained from the party and placed in the record.
(b) Service of orders or decisions other than an order instituting proceedings. Written orders or decisions
issued by the Commission or by a hearing officer shall be served promptly on each party pursuant to
any method of service authorized under paragraph (a) of this rule or Rules 150(c)(1) - (3). Such
orders or decisions may also be served by facsimile transmission if the party to be served has agreed
to accept such service in a writing, signed by the party, and has provided the Commission with
information concerning the facsimile machine telephone number and hours of facsimile machine
operation. Service of orders or decisions by the Commission, including those entered pursuant to
delegated authority, shall be made by the Secretary or, as authorized by the Secretary, by a member
of an interested division. Service of orders or decisions issued by a hearing officer shall be made by
the Secretary or the hearing officer.
Rule 150. Service of papers by parties.
(a) When required. In every proceeding as defined in Rule 101(a), each paper, including each notice
of appearance, written motion, brief, or other written communication, shall be served upon each
party in the proceeding in accordance with the provisions of this rule; provided, however, that
absent an order to the contrary, no service shall be required for motions which may be heard ex
parte.
(b) Upon a person represented by counsel. Whenever service is required to be made upon a person
represented by counsel who has filed a notice of appearance pursuant to Rule 102, service shall be
made pursuant to paragraph (c) of this rule upon counsel, unless service upon the person
represented is ordered by the Commission or the hearing officer.
(c) How made. Service shall be made by delivering a copy of the filing. Delivery means:

21

(1) Personal service—handing a copy to the person required to be served; or leaving a copy
at the person's office with a clerk or other person in charge thereof, or, if there is no one in
charge, leaving it in a conspicuous place therein; or, if the office is closed or the person to be
served has no office, leaving it at the person's dwelling house or usual place of abode with some
person of suitable age and discretion then residing therein;
(2) Mailing the papers through the U.S. Postal Service by first class, registered, or certified
mail or Express Mail delivery addressed to the person;
(3) Sending the papers through a commercial courier service or express delivery service; or
(4) Transmitting the papers by facsimile transmission where the following conditions are
met:
(i) The persons so serving each other have provided the Commission and the parties
with notice of the facsimile machine telephone number to be used and the hours of facsimile
machine operation;
(ii) The transmission is made at such a time that it is received during the Commission's
business hours as defined in Rule 104; and
(iii) The sender of the transmission previously has not been served in accordance with
Rule 150 with a written notice from the recipient of the transmission declining service by
facsimile transmission.
(d) When service is complete. Personal service, service by U.S. Postal Service Express Mail or service
by a commercial courier or express delivery service is complete upon delivery. Service by mail is
complete upon mailing. Service by facsimile is complete upon confirmation of transmission by
delivery of a manually signed receipt.
Rule 151. Filing of papers with the Commission: Procedure.
(a) When to file. All papers required to be served by a party upon any person shall be filed
contemporaneously with the Commission. Papers required to be filed with the Commission must be
received within the time limit, if any, for such filing. Filing with the Commission may be made by
facsimile transmission if the party also contemporaneously transmits to the Commission a non22

facsimile original with a manual signature. However, any person filing with the Commission by
facsimile transmission will be responsible for assuring that the Commission receives a complete and
legible filing within the time limit set for such filing.
(b) Where to file. Filing of papers with the Commission shall be made by filing them with the
Secretary. When a proceeding is assigned to a hearing officer, a person making a filing with the
Secretary shall promptly provide to the hearing officer a copy of any such filing, provided, however,
that the hearing officer may direct or permit filings to be made with him or her, in which event the
hearing officer shall note thereon the filing date and promptly provide the Secretary with either the
original or a copy of any such filings.
(c) To whom to direct the filing. Unless otherwise provided, where the Commission has assigned a
case to a hearing officer, all motions, objections, applications or other filings made during a
proceeding prior to the filing of an initial decision therein, or, if no initial decision is to be filed,
prior to the time fixed for the filing of briefs with the Commission, shall be directed to and decided
by the hearing officer.
(d) Certificate of service. Papers filed with the Commission or a hearing officer shall be
accompanied by a certificate stating the name of the person or persons served, the date of service,
the method of service and the mailing address or facsimile telephone number to which service was
made, if not made in person. If the method of service to any party is different from the method of
service to any other party or the method for filing with the Commission, the certificate shall state
why a different means of service was used.
Rule 152. Filing of papers: Form.
(a) Specifications. Papers filed in connection with any proceeding as defined in Rule 101(a) shall:
(1) Be on one grade of unglazed white paper measuring 81⁄2 × 11 inches, except that, to the
extent that the reduction of larger documents would render them illegible, such documents may
be filed on larger paper;
(2) Be typewritten or printed in 12-point or larger typeface or otherwise reproduced by a
process that produces permanent and plainly legible copies;
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(3) Include at the head of the paper, or on a title page, the name of the Commission, the title
of the proceeding, the names of the parties, the subject of the particular paper or pleading, and
the file number assigned to the proceeding;
(4) Be paginated with left hand margins at least 1 inch wide, and other margins of at least 1
inch;
(5) Be double-spaced, with single-spaced footnotes and single-spaced indented quotations;
and
(6) Be stapled, clipped or otherwise fastened in the upper left corner.
(b) Signature required. All papers must be dated and signed as provided in Rule 153.
(c) Suitability for recordkeeping. Documents which, in the opinion of the Commission, are not
suitable for computer scanning or microfilming may be rejected.
(d) Number of copies. An original and three copies of all papers shall be filed, unless filing is made
by facsimile in accordance with Rule 151. If filing is made by facsimile, the filer shall also transmit to
the Office of the Secretary one non-facsimile original with a manual signature, contemporaneously
with the facsimile transmission. The non-facsimile original must be accompanied by a statement of
the date on which, and the facsimile number to which, the party made transmission of the facsimile
filing.
(e) Form of briefs. All briefs containing more than 10 pages shall include a table of contents, an
alphabetized table of cases, a table of statutes, and a table of other authorities cited, with references
to the pages of the brief wherein they are cited.
(f) Scandalous or impertinent matter. Any scandalous or impertinent matter contained in any brief or
pleading or in connection with any oral presentation in a proceeding may be stricken on order of the
Commission or the hearing officer.
Rule 153. Filing of papers: Signature requirement and effect.
(a) General requirements. Following the issuance of an order instituting proceedings, every filing of
a party represented by counsel shall be signed by at least one counsel of record in his or her name
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and shall state that counsel's business address and telephone number. A party who acts as his or her
own counsel shall sign his or her individual name and state his or her address and telephone number
on every filing.
(b) Effect of signature.
(1) The signature of a counsel or party shall constitute a certification that:
(i) The person signing the filing has read the filing;
(ii) To the best of his or her knowledge, information, and belief, formed after reasonable
inquiry, the filing is well grounded in fact and is warranted by existing law or a good faith
argument for the extension, modification, or reversal of existing law; and
(iii) The filing is not made for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of adjudication.
(2) If a filing is not signed, the hearing officer or the Commission shall strike the filing,
unless it is signed promptly after the omission is called to the attention of the person making the
filing.
Rule 154. Motions.
The requirements in this rule apply to motions and related filings except where another rule
expressly governs.
(a) Generally. Unless made during a hearing or conference, a motion shall be in writing, shall state
with particularity the grounds therefor, shall set forth the relief or order sought, and shall be
accompanied by a written brief of the points and authorities relied upon. All written motions shall
be served in accordance with Rule 150, be filed in accordance with Rule 151, meet the requirements
of Rule 152, and be signed in accordance with Rule 153. The Commission or the hearing officer may
order that an oral motion be submitted in writing. Unless otherwise ordered by the Commission or
the hearing officer, if a motion is properly made to the Commission concerning a proceeding to
which a hearing officer is assigned, the proceeding before the hearing officer shall continue pending
the determination of the motion by the Commission. No oral argument shall be heard on any
motion unless the Commission or the hearing officer otherwise directs.
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(b) Opposing and reply briefs. Briefs in opposition to a motion shall be filed within five days after
service of the motion. Reply briefs shall be filed within three days after service of the opposition.
(c) Length limitation. No motion (together with the brief in support of the motion), brief in
opposition to the motion, or reply brief shall exceed 7,000 words, exclusive of any table of contents
or table of authorities. The word limit shall not apply to any addendum that consists solely of copies
of applicable cases, pertinent legislative provisions or rules, or relevant exhibits. Requests for leave
to file motions and briefs in excess of 7,000 words are disfavored. A motion or brief, together with
any accompanying brief, that does not exceed 15 pages in length, exclusive of pages containing the
table of contents, table of authorities, and any addendum that consists solely of copies of applicable
cases, pertinent legislative provisions, or rules and exhibits, but inclusive of pleadings incorporated
by reference, is presumptively considered to contain no more than 7,000 words. Any motion or brief
that exceeds these page limits must include a certificate by the attorney, or an unrepresented party,
stating that the document complies with the length limitation set forth in this paragraph and stating
the number of words in the document. The person preparing the certificate may rely on the word
count of a word-processing program to prepare the document.
Rule 155. Default; motion to set aside default.
(a) A party to a proceeding may be deemed to be in default and the Commission or the hearing
officer may determine the proceeding against that party upon consideration of the record, including
the order instituting proceedings, the allegations of which may be deemed to be true, if that party
fails:
(1) To appear, in person or through a representative, at a hearing or conference of which
that party has been notified;
(2) To answer, to respond to a dispositive motion within the time provided, or otherwise to
defend the proceeding; or
(3) To cure a deficient filing within the time specified by the commission or the hearing
officer pursuant to Rule 180(b).
(b) A motion to set aside a default shall be made within a reasonable time, state the reasons for
the failure to appear or defend, and specify the nature of the proposed defense in the proceeding. In
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order to prevent injustice and on such conditions as may be appropriate, the hearing officer, at any
time prior to the filing of the initial decision, or the Commission, at any time, may for good cause
shown set aside a default.
Rule 160. Time computation.
(a) Computation. In computing any period of time prescribed in or allowed by these Rules of
Practice or by order of the Commission, the day of the act, event, or default from which the
designated period of time begins to run shall not be included. The last day of the period so
computed shall be included unless it is a Saturday, Sunday, or Federal legal holiday (as defined in
Rule 104), in which event the period runs until the end of the next day that is not a Saturday,
Sunday, or Federal legal holiday. Intermediate Saturdays, Sundays, and Federal legal holidays shall be
excluded from the computation when the period of time prescribed or allowed is seven days or less,
not including any additional time allowed for service by mail in paragraph (b) of this rule. If on the
day a filing is to be made, weather or other conditions have caused the Secretary's office or other
designated filing location to close, the filing deadline shall be extended to the end of the next day
that is neither a Saturday, a Sunday, nor a Federal legal holiday.
(b) Additional time for service by mail. If service is made by mail, three days shall be added to the
prescribed period for response unless an order of the Commission or the hearing officer specifies a
date certain for filing. In the event that an order of the Commission or the hearing officer specifies a
date certain for filing, no time shall be added for service by mail.
Rule 161. Extensions of time, postponements and adjournments.
(a) Availability. Except as otherwise provided by law, the Commission, at any time, or the hearing
officer, at any time prior to the filing of his or her initial decision or, if no initial decision is to be
filed, at any time prior to the closing of the record, may, for good cause shown, extend or shorten
any time limits prescribed by these Rules of Practice for the filing of any papers and may, consistent
with paragraphs (b) and (c) of this rule, postpone or adjourn any hearing.
(b) Considerations in determining whether to extend time limits or grant postponements, adjournments and
extensions.

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(1) In considering all motions or requests pursuant to paragraph (a) or (b) of this rule, the
Commission or the hearing officer should adhere to a policy of strongly disfavoring such
requests, except in circumstances where the requesting party makes a strong showing that the
denial of the request or motion would substantially prejudice their case. In determining whether
to grant any requests, the Commission or hearing officer shall consider, in addition to any other
relevant factors:
(i) The length of the proceeding to date;
(ii) The number of postponements, adjournments or extensions already granted;
(iii) The stage of the proceedings at the time of the request;
(iv) The impact of the request on the hearing officer's ability to complete the proceeding
in the time specified by the Commission; and
(v) Any other such matters as justice may require.
(2) To the extent that the Commission has chosen a timeline under which the hearing would
occur beyond the statutory 60-day deadline, this policy of strongly disfavoring requests for
postponement will not apply to a request by a respondent to postpone commencement of a
cease and desist proceeding hearing beyond the statutory 60-day period.
(c) (1) Time limit. Postponements, adjournments or extensions of time for filing papers shall not
exceed 21 days unless the Commission or the hearing officer states on the record or sets forth in a
written order the reasons why a longer period of time is necessary.
(2) Stay pending Commission consideration of offers of settlement.
(i) If the Commission staff and one or more respondents in the proceeding file a joint
motion notifying the hearing officer that they have agreed in principle to a settlement on all
major terms, then the hearing officer shall stay the proceeding as to the settling
respondent(s), or in the discretion of the hearing officer as to all respondents, pending
completion of Commission consideration of the settlement offer. Any such stay will be
contingent upon:
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(A) The settling respondent(s) submitting to the Commission staff, within fifteen
business days of the stay, a signed offer of settlement in conformance with Rule 240; and
(B) Within twenty business days of receipt of the signed offer, the staff submitting
the settlement offer and accompanying recommendation to the Commission for
consideration.
(ii) If the parties fail to meet either of these deadlines or if the Commission rejects the
offer of settlement, the hearing officer must be promptly notified and, upon notification of
the hearing officer, the stay shall lapse and the proceeding will continue. In the circumstance
where:
(A) A hearing officer has granted a stay because the parties have “agreed in principle
to a settlement;”
(B) The agreement in principle does not materialize into a signed settlement offer
within 15 business days of the stay; and
(C) The stay lapses, the hearing officer will not be required to grant another stay
related to the settlement process until both parties have notified the hearing officer in
writing that a signed settlement offer has been prepared, received by the Commission's
staff, and will be submitted to the Commission.
(iii) The granting of any stay pursuant to this paragraph (c) shall stay the timeline
pursuant to Rule 360(a).
Rule 180. Sanctions.
(a) Contemptuous conduct.
(1) Subject to exclusion or suspension. Contemptuous conduct by any person before the
Commission or a hearing officer during any proceeding, including at or in connection with any
conference, deposition or hearing, shall be grounds for the Commission or the hearing officer
to:

29

(i) Exclude that person from such deposition, hearing or conference, or any portion
thereof; and/or
(ii) Summarily suspend that person from representing others in the proceeding in which
such conduct occurred for the duration, or any portion, of the proceeding.
(2) Review procedure. A person excluded from a deposition, hearing or conference, or a counsel
summarily suspended from practice for the duration or any portion of a proceeding, may seek
review of the exclusion or suspension by filing with the Commission, within three days of the
exclusion or suspension order, a motion to vacate the order. The Commission shall consider
such motion on an expedited basis as provided in Rule 500.
(3) Adjournment. Upon motion by a party represented by counsel subject to an order of
exclusion or suspension, an adjournment shall be granted to allow the retention of new counsel.
In determining the length of an adjournment, the Commission or hearing officer shall consider,
in addition to the factors set forth in Rule 161, the availability of co-counsel for the party or of
other members of a suspended counsel's firm.
(b) Deficient filings; leave to cure deficiencies. The Commission or the hearing officer may reject, in
whole or in part, any filing that fails to comply with any requirements of these Rules of Practice or
of any order issued in the proceeding in which the filing was made. Any such filings shall not be part
of the record. The Commission or the hearing officer may direct a party to cure any deficiencies and
to resubmit the filing within a fixed time period.
(c) Failure to make required filing or to cure deficient filing. The Commission or the hearing officer may
enter a default pursuant to Rule 155, dismiss one or more claims, decide the particular claim(s) at
issue against that person, or prohibit the introduction of evidence or exclude testimony concerning
that claim if a person fails:
(1) To make a filing required under these Rules of Practice; or
(2) To cure a deficient filing within the time specified by the Commission or the hearing
officer pursuant to paragraph (b) of this rule.

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Rule 190. Confidential treatment of information in certain filings.
(a) Application. An application for confidential treatment pursuant to the provisions of Clause 30
of Schedule A of the Securities Act of 1933, 15 U.S.C. 77aa(30), and Rule 406 thereunder, 17 CFR
230.406; Section 24(b)(2) of the Securities Exchange Act of 1934, 15 U.S.C. 78x(b)(2), and Rule 24b2 thereunder, 17 CFR 240.24b-2; Section 45(a) of the Investment Company Act of 1940, 15 U.S.C.
80a-44(a), and Rule 45a-1 thereunder, 17 CFR 270.45a-1; or Section 210(a) of the Investment
Advisers Act of 1940, 15 U.S.C. 80b-10(a), shall be filed with the Secretary. The application shall be
accompanied by a sealed copy of the materials as to which confidential treatment is sought.
(b) Procedure for supplying additional information. The applicant may be required to furnish in writing
additional information with respect to the grounds for objection to public disclosure. Failure to
supply the information so requested within 14 days from the date of receipt by the applicant of a
notice of the information required shall be deemed a waiver of the objection to public disclosure of
that portion of the information to which the additional information relates, unless the Commission
or the hearing officer shall otherwise order for good cause shown at or before the expiration of such
14-day period.
(c) Confidentiality of materials pending final decision. Pending the determination of the application for
confidential treatment, transcripts, non-final orders including an initial decision, if any, and other
materials in connection with the application shall be placed under seal; shall be for the confidential
use only of the hearing officer, the Commission, the applicant, and any other parties and counsel;
and shall be made available to the public only in accordance with orders of the Commission.
(d) Public availability of orders. Any final order of the Commission denying or sustaining an
application for confidential treatment shall be made public. Any prior findings or opinions relating
to an application for confidential treatment under this rule shall be made public at such time as the
material as to which confidentiality was requested is made public.
Rule 191. Adjudications not required to be determined on the record after notice and
opportunity for hearing.
(a) Scope of the rule. This rule applies to every case of adjudication, as defined in 5 U.S.C. 551,
pursuant to any statute which the Commission administers, where adjudication is not required to be
31

determined on the record after notice and opportunity for hearing and which the Commission has
not chosen to determine on the record after notice and opportunity for hearing.
(b) Procedure. In every case of adjudication under paragraph (a) of this rule, the Commission shall
give prompt notice of any adverse action or final disposition to any person who has requested the
Commission to make (or not to make) any such adjudication, and furnish to any such person a
written statement of reasons therefor. Additional procedures may be specified in rules relating to
specific types of such adjudications. Where any such rule provides for the publication of a
Commission order, notice of the action or disposition shall be deemed to be given by such
publication.
(c) Contents of the record. If the Commission provides notice and opportunity for the submission of
written comments by parties to the adjudication or, as the case may be, by other interested persons,
written comments received on or before the closing date for comments, unless accorded
confidential treatment pursuant to statute or rule of the Commission, become a part of the record of
the adjudication. The Commission, in its discretion, may accept and include in the record written
comments filed with the Commission after the closing date.
Rule 192. Rulemaking: Issuance, amendment and repeal of rules of general application.
(a) By petition. Any person desiring the issuance, amendment or repeal of a rule of general
application may file a petition therefor with the Secretary. Such petition shall include a statement
setting forth the text or the substance of any proposed rule or amendment desired or specifying the
rule the repeal of which is desired, and stating the nature of his or her interest and his or her reasons
for seeking the issuance, amendment or repeal of the rule. The Secretary shall acknowledge, in
writing, receipt of the petition and refer it to the appropriate division or office for consideration and
recommendation. Such recommendations shall be transmitted with the petition to the Commission
for such action as the Commission deems appropriate. The Secretary shall notify the petitioner of
the action taken by the Commission.
(b) Notice of proposed issuance, amendment or repeal of rules. Except where the Commission finds that
notice and public procedure are impracticable, unnecessary, or contrary to the public interest,
whenever the Commission proposes to issue, amend, or repeal any rule or regulation of general
application other than an interpretive rule; general statement of policy; or rule of agency
32

organization, procedure, or practice; or any matter relating to agency management or personnel or to
public property, loans, grants, benefits, or contracts, there shall first be published in the Federal
Register a notice of the proposed action. Such notice shall include:
(1) A statement of the time, place, and nature of the rulemaking proceeding, with particular
reference to the manner in which interested persons shall be afforded the opportunity to
participate in such proceeding;
(2) Reference to the authority under which the rule is proposed; and
(3) The terms or substance of the proposed rule or a description of the subjects and issues
involved.
Rule 193. Applications by barred individuals for consent to associate.
Preliminary note
This rule governs applications to the Commission by certain persons, barred by Commission
order from association with brokers, dealers, municipal securities dealers, government securities
brokers, government securities dealers, investment advisers, investment companies or transfer
agents, for consent to become so associated. Applications made pursuant to this rule must show that
the proposed association would be consistent with the public interest. In addition to the information
specifically required by the rule, applications should be supplemented, where appropriate, by written
statements of individuals (other than the applicant) who are competent to attest to the applicant's
character, employment performance, and other relevant information. Intentional misstatements or
omissions of fact may constitute criminal violations of 18 U.S.C. 1001 et seq. and other provisions
of law.
The nature of the supervision that an applicant will receive or exercise as an associated person
with a registered entity is an important matter bearing upon the public interest. In meeting the
burden of showing that the proposed association is consistent with the public interest, the
application and supporting documentation must demonstrate that the proposed supervision,
procedures, or terms and conditions of employment are reasonably designed to prevent a recurrence
of the conduct that led to imposition of the bar. As an associated person, the applicant will be
33

limited to association in a specified capacity with a particular registered entity and may also be
subject to specific terms and conditions.
Normally, the applicant's burden of demonstrating that the proposed association is consistent
with the public interest will be difficult to meet where the applicant is to be supervised by, or is to
supervise, another barred individual. In addition, where an applicant wishes to become the sole
proprietor of a registered entity and thus is seeking Commission consent notwithstanding an
absence of supervision, the applicant's burden will be difficult to meet.
In addition to the factors set forth in paragraph (d) of this rule, the Commission will consider
the nature of the findings that resulted in the bar when making its determination as to whether the
proposed association is consistent with the public interest. In this regard, attention is directed to
Rule 5(e) of the Commission's Rules on Informal and Other Procedures, 17 CFR 202.5(e). Among
other things, Rule 5(e) sets forth the Commission's policy “not to permit a * * * respondent [in an
administrative proceeding] to consent to * * * [an] order that imposes a sanction while denying the
allegations in the * * * order for proceedings.” Consistent with the rationale underlying that policy,
and in order to avoid the appearance that an application made pursuant to this rule was granted on
the basis of such denial, the Commission will not consider any application that attempts to reargue
or collaterally attack the findings that resulted in the Commission's bar order.
(a) Scope of rule. Applications for Commission consent to associate, or to change the terms and
conditions of association, with a registered broker, dealer, municipal securities dealer, government
securities broker, government securities dealer, investment adviser, investment company or transfer
agent may be made pursuant to this rule where a Commission order bars the individual from
association with a registered entity and:
(1) Such barred individual seeks to become associated with an entity that is not a member of
a self-regulatory organization; or
(2) The order contains a proviso that application may be made to the Commission after a
specified period of time.
(b) Form of application. Each application shall be supported by an affidavit, manually signed by the
applicant, that addresses the factors set forth in paragraph (d) of this rule. One original and three
34

copies of the application shall be filed pursuant to Rules 151, 152 and 153. Each application shall
include as exhibits:
(1) A copy of the Commission order imposing the bar;
(2) An undertaking by the applicant to notify immediately the Commission in writing if any
information submitted in support of the application becomes materially false or misleading while
the application is pending;
(3) The following forms, as appropriate:
(i) A copy of a completed Form U-4, where the applicant's proposed association is with a
broker-dealer or municipal securities dealer;
(ii) A copy of a completed Form MSD-4, where the applicant's proposed association is
with a bank municipal securities dealer;
(iii) The information required by Form ADV, 17 CFR 279.1, with respect to the
applicant, where the applicant's proposed association is with an investment adviser;
(iv) The information required by Form TA-1, 17 CFR 249b.100, with respect to the
applicant, where the applicant's proposed association is with a transfer agent; and
(4) A written statement by the proposed employer that describes:
(i) The terms and conditions of employment and supervision to be exercised over such
applicant and, where applicable, by such applicant;
(ii) The qualifications, experience, and disciplinary records of the proposed supervisor(s)
of the applicant;
(iii) The compliance and disciplinary history, during the two years preceding the filing of
the application, of the office in which the applicant will be employed; and
(iv) The names of any other associated persons in the same office who have previously
been barred by the Commission, and whether they are to be supervised by the applicant.

35

(c) Required showing. The applicant shall make a showing satisfactory to the Commission that the
proposed association would be consistent with the public interest.
(d) Factors to be addressed. The affidavit required by paragraph (b) of this rule shall address each of
the following:
(1) The time period since the imposition of the bar;
(2) Any restitution or similar action taken by the applicant to recompense any person injured
by the misconduct that resulted in the bar;
(3) The applicant's compliance with the order imposing the bar;
(4) The applicant's employment during the period subsequent to imposition of the bar;
(5) The capacity or position in which the applicant proposes to be associated;
(6) The manner and extent of supervision to be exercised over such applicant and, where
applicable, by such applicant;
(7) Any relevant courses, seminars, examinations or other actions completed by the applicant
subsequent to imposition of the bar to prepare for his or her return to the securities business;
and
(8) Any other information material to the application.
(e) Notification to applicant and written statement. In the event an adverse recommendation is
proposed by the staff with respect to an application made pursuant to this rule, the applicant shall be
so advised and provided with a written statement of the reasons for such recommendation. The
applicant shall then have 30 days to submit a written statement in response.
(f) Concurrent applications. The Commission will not consider any application submitted pursuant
to this rule if any other application for consent to associate concerning the same applicant is pending
before any self-regulatory organization.

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INITIATION OF PROCEEDINGS AND PREHEARING RULES
Rule 200. Initiation of proceedings.
(a) Order instituting proceedings: Notice and opportunity for hearing.
(1) Generally. Whenever an order instituting proceedings is issued by the Commission,
appropriate notice thereof shall be given to each party to the proceeding by the Secretary or
another duly designated officer of the Commission. Each party shall be given notice of any
hearing within a time reasonable in light of the circumstances, in advance of the hearing;
provided, however, no prior notice need be given to a respondent if the Commission has
authorized the Division of Enforcement to seek a temporary sanction ex parte.
(2) Stop order proceedings: Additional persons entitled to notice. Any notice of a proceeding relating
to the issuance of a stop order suspending the effectiveness of a registration statement pursuant
to Section 8(d) of the Securities Act of 1933, 15 U.S.C. 77h(d), shall be sent to or served on the
issuer; or, in the case of a foreign government or political subdivision thereof, sent to or served
on the underwriter; or, in the case of a foreign or territorial person, sent to or served on its duly
authorized representative in the United States named in the registration statement, properly
directed in the case of telegraphic notice to the address given in such statement. In addition, if
such proceeding is commenced within 90 days after the registration statement has become
effective, notice of the proceeding shall be given to the agent for service named on the facing
sheet of the registration statement and to each other person designated on the facing sheet of
the registration statement as a person to whom copies of communications to such agent are to
be sent.
(b) Content of order. The order instituting proceedings shall:
(1) State the nature of any hearing;
(2) State the legal authority and jurisdiction under which the hearing is to be held;
(3) Contain a short and plain statement of the matters of fact and law to be considered and
determined, unless the order directs an answer pursuant to Rule 220 in which case the order

37

shall set forth the factual and legal basis alleged therefor in such detail as will permit a specific
response thereto; and
(4) State the nature of any relief or action sought or taken.
(c) Time and place of hearing. The time and place for any hearing shall be fixed with due regard for
the public interest and the convenience and necessity of the parties, other participants, or their
representatives.
(d) Amendment to order instituting proceedings.
(1) By the Commission. Upon motion by a party, the Commission may, at any time, amend an
order instituting proceedings to include new matters of fact or law.
(2) By the hearing officer. Upon motion by a party, the hearing officer may, at any time prior to
the filing of an initial decision or, if no initial decision is to be filed, prior to the time fixed for
the filing of final briefs with the Commission, amend an order instituting proceedings to include
new matters of fact or law that are within the scope of the original order instituting proceedings.
(e) Publication of notice of public hearings. Unless otherwise ordered by the Commission, notice of any
public hearing shall be given general circulation by release to the public, by publication in the SEC
News Digest and, where directed, by publication in the Federal Register.
Rule 201. Consolidation and severance of proceedings.
(a) Consolidation. By order of the Commission or a hearing officer, proceedings involving a
common question of law or fact may be consolidated for hearing of any or all the matters at issue in
such proceedings. The Commission or the hearing officer may make such orders concerning the
conduct of such proceedings as it deems appropriate to avoid unnecessary cost or delay.
Consolidation shall not prejudice any rights under these Rules of Practice and shall not affect the
right of any party to raise issues that could have been raised if consolidation had not occurred. For
purposes of this rule, no distinction is made between joinder and consolidation of proceedings.
(b) Severance. By order of the Commission, any proceeding may be severed with respect to one or
more parties. Any motion to sever must be made solely to the Commission and must include a
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representation that a settlement offer is pending before the Commission or otherwise show good
cause.
Rule 202. Specification of procedures by parties in certain proceedings.
(a) Motion to specify procedures. In any proceeding other than an enforcement or disciplinary
proceeding, a proceeding to review a determination by a self-regulatory organization pursuant to
Rules 420 and 421, or a proceeding to review a determination of the Board pursuant to Rules 440
and 441, a party may, at any time up to 20 days prior to the start of a hearing, make a motion to
specify the procedures necessary or appropriate for the proceeding with particular reference to:
(1) Whether there should be an initial decision by a hearing officer;
(2) Whether any interested division of the Commission may assist in the preparation of the
Commission's decision; and
(3) Whether there should be a 30-day waiting period between the issuance of the
Commission's order and the date it is to become effective.
(b) Objections; effect of failure to object. Any other party may object to the procedures so specified,
and such party may specify such additional procedures as it considers necessary or appropriate. In
the absence of such objection or such specification of additional procedures, such other party may
be deemed to have waived objection to the specified procedures.
(c) Approval required. Any proposal pursuant to paragraph (a) of this rule, even if not objected to
by any party, shall be subject to the written approval of the hearing officer.
(d) Procedure upon agreement to waive an initial decision. If an initial decision is waived pursuant to
paragraph (a) of this rule, the hearing officer shall notify the Secretary and, unless the Commission
directs otherwise within 14 days, no initial decision shall be issued.
Rule 210. Parties, limited participants and amici curiae.
(a) Parties in an enforcement or disciplinary proceeding, a proceeding to review a self-regulatory organization
determination, or a proceeding to review a Board determination.

39

(1) Generally. No person shall be granted leave to become a party or a non-party participant
on a limited basis in an enforcement or disciplinary proceeding, a proceeding to review a
determination by a self-regulatory organization pursuant to Rules 420 and 421, or a proceeding
to review a determination by the Board pursuant to Rules 440 and 441, except as authorized by
paragraph (c) of this rule.
(2) Disgorgement proceedings. In an enforcement proceeding, a person may state his or her views
with respect to a proposed plan of disgorgement or file a proof of claim pursuant to Rule 1103.
(b) Intervention as a party.
(1) Generally. In any proceeding, other than an enforcement proceeding, a disciplinary
proceeding, a proceeding to review a self-regulatory determination, or a proceeding to review a
Board determination, any person may seek leave to intervene as a party by filing a motion setting
forth the person's interest in the proceeding. No person, however, shall be admitted as a party to
a proceeding by intervention unless it is determined that leave to participate pursuant to
paragraph (c) of this rule would be inadequate for the protection of the person's interests. In a
proceeding under the Investment Company Act of 1940, any representative of interested
security holders, or any other person whose participation in the proceeding may be in the public
interest or for the protection of investors, may be admitted as a party upon the filing of a written
motion setting forth the person's interest in the proceeding.
(2) Intervention as of right. In proceedings under the Investment Company Act of 1940, any
interested State or State agency shall be admitted as a party to any proceeding upon the filing of
a written motion requesting leave to be admitted.
(c) Leave to participate on a limited basis. In any proceeding, other than an enforcement proceeding,
a disciplinary proceeding, a proceeding to review a self-regulatory determination, or a proceeding to
review a Board determination, any person may seek leave to participate on a limited basis as a nonparty participant as to any matter affecting the person's interests:
(1) Procedure. Motions for leave to participate shall be in writing, shall set forth the nature and
extent of the movant's interest in the proceeding, and, except where good cause for late filing is
shown, shall be filed not later than 20 days prior to the date fixed for the commencement of the
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hearing. Leave to participate pursuant to this paragraph (c) may include such rights of a party as
the hearing officer may deem appropriate. Persons granted leave to participate shall be served in
accordance with Rule 150; provided, however, that a party to the proceeding may move that the
extent of notice of filings or other papers to be provided to persons granted leave to participate
be limited, or may move that the persons granted leave to participate bear the cost of being
provided copies of any or all filings or other papers. Persons granted leave to participate shall be
bound, except as may be otherwise determined by the hearing officer, by any stipulation between
the parties to the proceeding with respect to procedure, including submission of evidence,
substitution of exhibits, corrections of the record, the time within which briefs or exceptions
may be filed or proposed findings and conclusions may be submitted, the filing of initial
decisions, the procedure to be followed in the preparation of decisions and the effective date of
the Commission's order in the case. Where the filing of briefs or exceptions or the submission of
proposed findings and conclusions are waived by the parties to the proceedings, a person
granted leave to participate pursuant to this paragraph (c) shall not be permitted to file a brief or
exceptions or submit proposed findings and conclusions except by leave of the Commission or
of the hearing officer.
(2) Certain persons entitled to leave to participate. The hearing officer is directed to grant leave to
participate under this paragraph (c) to any person to whom it is proposed to issue any security in
exchange for one or more bona fide outstanding securities, claims or property interests, or partly
in such exchange and partly for cash, where the Commission is authorized to approve the terms
and conditions of such issuance and exchange after a hearing upon the fairness of such terms
and conditions.
(3) Leave to participate in certain Commission proceedings by a representative of the United States
Department of Justice, a United States Attorney's Office, or a criminal prosecutorial authority of any State or
any other political subdivision of a State. The Commission or the hearing officer may grant leave to
participate on a limited basis to an authorized representative of the United States Department of
Justice, an authorized representative of a United States Attorney, or an authorized representative
of any criminal prosecutorial authority of any State or any other political subdivision of a State
for the purpose of requesting a stay during the pendency of a criminal investigation or
prosecution arising out of the same or similar facts that are at issue in the pending Commission
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enforcement or disciplinary proceeding. Upon a showing that such a stay is in the public interest
or for the protection of investors, the motion for stay shall be favored. A stay granted under this
paragraph (c)(3) may be granted for such a period and upon such conditions as the Commission
or the hearing officer deems appropriate.
(d) Amicus participation.
(1) Availability. An amicus brief may be filed only if:
(i) A motion for leave to file the brief has been granted;
(ii) The brief is accompanied by written consent of all parties;
(iii) The brief is filed at the request of the Commission or the hearing officer; or
(iv) The brief is presented by the United States or an officer or agency thereof, or by a
State, Territory or Commonwealth.
(2) Procedure. An amicus brief may be filed conditionally with the motion for leave. The
motion for leave shall identify the interest of the movant and shall state the reasons why a brief
of an amicus curiae is desirable. Except as all parties otherwise consent, any amicus curiae shall
file its brief within the time allowed the party whose position the amicus will support, unless the
Commission or hearing officer, for cause shown, grants leave for a later filing. In the event that a
later filing is allowed, the order granting leave to file shall specify when an opposing party may
reply to the brief. A motion of an amicus curiae to participate in oral argument will be granted
only for extraordinary reasons.
(e) Permission to state views. Any person may make a motion seeking leave to file a memorandum or
make an oral statement of his or her views. Any such communication may be included in the record;
provided, however, that unless offered and admitted as evidence of the truth of the statements
therein made, any assertions of fact submitted pursuant to the provisions of this paragraph (e) will
be considered only to the extent that the statements therein made are otherwise supported by the
record.
(f) Modification of participation provisions. The Commission or the hearing officer may, by order,
modify the provisions of this rule which would otherwise be applicable, and may impose such terms
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and conditions on the participation of any person in any proceeding as it may deem necessary or
appropriate in the public interest.
Rule 220. Answer to allegations.
(a) When required. In its order instituting proceedings, the Commission may require any
respondent to file an answer to each of the allegations contained therein. Even if not so ordered, any
respondent in any proceeding may elect to file an answer. Any other person granted leave by the
Commission or the hearing officer to participate on a limited basis in such proceedings pursuant to
Rule 210(c) may be required to file an answer.
(b) When to file. Except where a different period is provided by rule or by order, a respondent
required to file an answer as provided in paragraph (a) of this rule shall do so within 20 days after
service upon the respondent of the order instituting proceedings. Persons granted leave to
participate on a limited basis in the proceeding pursuant to Rule 210(c) may file an answer within a
reasonable time, as determined by the Commission or the hearing officer. If the order instituting
proceedings is amended, the Commission or the hearing officer may require that an amended
answer be filed and, if such an answer is required, shall specify a date for the filing thereof.
(c) Contents; effect of failure to deny. Unless otherwise directed by the hearing officer or the
Commission, an answer shall specifically admit, deny, or state that the party does not have, and is
unable to obtain, sufficient information to admit or deny each allegation in the order instituting
proceedings. When a party intends in good faith to deny only a part of an allegation, the party shall
specify so much of it as is true and shall deny only the remainder. A statement of a lack of
information shall have the effect of a denial. Any allegation not denied shall be deemed admitted. A
respondent must affirmatively state in the answer any avoidance or affirmative defense, including
but not limited to res judicata and statute of limitations. In this regard, a respondent must state in
the answer whether the respondent relied on the advice of counsel, accountants, auditors, or other
professionals in connection with any claim, violation alleged or remedy sought. Failure to do so may
be deemed a waiver.
(d) Motion for more definite statement. A respondent may file with an answer a motion for a more
definite statement of specified matters of fact or law to be considered or determined. Such motion
shall state the respects in which, and the reasons why, each such matter of fact or law should be
43

required to be made more definite. If the motion is granted, the order granting such motion shall set
the periods for filing such a statement and any answer thereto.
(e) Amendments. A respondent may amend its answer at any time by written consent of each
adverse party or with leave of the Commission or the hearing officer. Leave shall be freely granted
when justice so requires.
(f) Failure to file answer: default. If a respondent fails to file an answer required by this rule within
the time provided, such respondent may be deemed in default pursuant to Rule 155(a). A party may
make a motion to set aside a default pursuant to Rule 155(b).
Rule 221. Prehearing conference.
(a) Purposes of conference. The purposes of a prehearing conference include, but are not limited to:
(1) Expediting the disposition of the proceeding;
(2) Establishing early and continuing control of the proceeding by the hearing officer; and
(3) Improving the quality of the hearing through more thorough preparation.
(b) Procedure. On his or her own motion or at the request of a party, the hearing officer may, in
his or her discretion, direct counsel or any party to meet for an initial, final or other prehearing
conference. Such conferences may be held with or without the hearing officer present as the hearing
officer deems appropriate. Where such a conference is held outside the presence of the hearing
officer, the hearing officer shall be advised promptly by the parties of any agreements reached. Such
conferences also may be held with one or more persons participating by telephone or other remote
means.
(c) Subjects to be discussed. At a prehearing conference consideration may be given and action taken
with respect to any and all of the following:
(1) Simplification and clarification of the issues;
(2) Exchange of witness and exhibit lists and copies of exhibits;
(3) Timing of expert witness disclosures and reports, if any;
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(4) Stipulations, admissions of fact, and stipulations concerning the contents, authenticity, or
admissibility into evidence of documents;
(5) Matters of which official notice may be taken;
(6) The schedule for exchanging prehearing motions or briefs, if any;
(7) The method of service for papers other than Commission orders;
(8) The filing of any motion pursuant to Rule 250;
(9) Settlement of any or all issues;
(10) Determination of hearing dates;
(11) Amendments to the order instituting proceedings or answers thereto;
(12) Production, and timing for completion of the production, of documents as set forth in
Rule 230, and prehearing production of documents in response to subpoenas duces tecum as set
forth in Rule 232;
(13) Specification of procedures as set forth in Rule 202;
(14) Depositions to be conducted, if any, and date by which depositions shall be completed;
and
(15) Such other matters as may aid in the orderly and expeditious disposition of the
proceeding.
(d) Required prehearing conference. Except where the emergency nature of a proceeding would make
a prehearing conference clearly inappropriate, at least one prehearing conference should be held.
(e) Prehearing orders. At or following the conclusion of any conference held pursuant to this rule,
the hearing officer shall enter a ruling or order which recites the agreements reached and any
procedural determinations made by the hearing officer.
(f) Failure to appear: default. Any person who is named in an order instituting proceedings as a
person against whom findings may be made or sanctions imposed and who fails to appear, in person
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or through a representative, at a prehearing conference of which he or she has been duly notified
may be deemed in default pursuant to Rule 155(a). A party may make a motion to set aside a default
pursuant to Rule 155(b).
Rule 222. Prehearing submissions and disclosures.
(a) Submissions generally. The hearing officer, on his or her own motion, or at the request of a party
or other participant, may order any party, including the interested division, to furnish such
information as deemed appropriate, including any or all of the following:
(1) An outline or narrative summary of its case or defense;
(2) The legal theories upon which it will rely;
(3) Copies and a list of documents that it intends to introduce at the hearing; and
(4) A list of witnesses who will testify on its behalf, including the witnesses' names,
occupations, addresses and a brief summary of their expected testimony.
(b) Expert witnesses.
(1) Information to be supplied; reports. Each party who intends to call an expert witness shall
submit, in addition to the information required by paragraph (a)(4) of this rule, a statement of
the expert's qualifications, a listing of other proceedings in which the expert has given expert
testimony during the previous four years, and a list of publications authored or co-authored by
the expert in the previous ten years. Additionally, if the witness is one retained or specially
employed to provide expert testimony in the case or one whose duties as the party's employee
regularly involve giving expert testimony, then the party must include in the disclosure a written
report—prepared and signed by the witness. The report must contain:
(i) A complete statement of all opinions the witness will express and the basis and
reasons for them;
(ii) The facts or data considered by the witness in forming them;
(iii) Any exhibits that will be used to summarize or support them; and
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(iv) A statement of the compensation to be paid for the study and testimony in the case.
(2) Drafts and communications protected.
(i) Drafts of any report or other disclosure required under this rule need not be furnished
regardless of the form in which the draft is recorded.
(ii) Communications between a party's attorney and the party's expert witness who is
required to provide a report under this rule need not be furnished regardless of the form of
the communications, except if the communications relate to compensation for the expert's
study or testimony, identify facts or data that the party's attorney provided and that the
expert considered in forming the opinions to be expressed, or identify assumptions that the
party's attorney provided and that the expert relied on in forming the opinions to be
expressed.
Rule 230. Enforcement and disciplinary proceedings: Availability of documents for
inspection and copying.
For purposes of this rule, the term documents shall include writings, drawings, graphs, charts,
photographs, recordings and other data compilations, including data stored by computer, from
which information can be obtained.
(a) Documents to be available for inspection and copying.
(1) Unless otherwise provided by this rule, or by order of the Commission or the hearing
officer, the Division of Enforcement shall make available for inspection and copying by any
party documents obtained by the Division prior to the institution of proceedings, in connection
with the investigation leading to the Division's recommendation to institute proceedings. Such
documents shall include:
(i) Each subpoena issued;
(ii) Every other written request to persons not employed by the Commission to provide
documents or to be interviewed;
(iii) The documents turned over in response to any such subpoenas or other written
requests;
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(iv) All transcripts and transcript exhibits;
(v) Any other documents obtained from persons not employed by the Commission; and
(vi) Any final examination or inspection reports prepared by the Office of Compliance
Inspections and Examinations, the Division of Trading and Markets, or the Division of
Investment Management, if the Division of Enforcement intends either to introduce any
such report into evidence or to use any such report to refresh the recollection of any witness.
(2) Nothing in this paragraph (a) shall limit the right of the Division to make available any
other document, or shall limit the right of a respondent to seek access to or production pursuant
to subpoena of any other document, or shall limit the authority of the hearing officer to order
the production of any document pursuant to subpoena.
(b) Documents that may be withheld or redacted.
(1) The Division of Enforcement may withhold a document if:
(i) The document is privileged;
(ii) The document is an internal memorandum, note or writing prepared by a
Commission employee, other than an examination or inspection report as specified in
paragraph (a)(1)(vi) of this rule, or is otherwise attorney work product and will not be
offered in evidence;
(iii) The document would disclose the identity of a confidential source;
(iv) The document reflects only settlement negotiations between the Division of
Enforcement and a person or entity who is not a respondent in the proceeding; or
(v) The hearing officer grants leave to withhold a document or category of documents as
not relevant to the subject matter of the proceeding or otherwise, for good cause shown.
(2) Unless the hearing officer orders otherwise upon motion, the Division of Enforcement
may redact information from a document if:

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(i) The information is among the categories set forth in paragraphs (b)(1)(i) through (v)
of this rule; or
(ii) The information consists of the following with regard to a person other than the
respondent to whom the information is being produced:
(A) An individual's social-security number;
(B) An individual’s birth date;
(C) The name of an individual known to be a minor; or
(D) A financial account number, taxpayer-identification number, credit card or debit
card number, passport number, driver's license number, or state-issued identification
number other than the last four digits of the number.
(3) Nothing in this paragraph (b) authorizes the Division of Enforcement in connection with
an enforcement or disciplinary proceeding to withhold, contrary to the doctrine of Brady v.
Maryland, 373 U.S. 83, 87 (1963), documents that contain material exculpatory evidence.
(c) Withheld document list. The hearing officer may require the Division of Enforcement to submit
for review a list of documents or categories of documents withheld pursuant to paragraphs (b)(1)(i)
through (b)(1)(v) of this rule or to submit any document withheld, and may determine whether any
such document should be made available for inspection and copying. When similar documents are
withheld pursuant to paragraphs (b)(1)(i) through (b)(1)(v) of this rule, those documents may be
identified by category instead of by individual document. The hearing officer retains discretion to
determine when an identification by category is insufficient.
(d) Timing of inspection and copying. Unless otherwise ordered by the Commission or the hearing
officer, the Division of Enforcement shall commence making documents available to a respondent
for inspection and copying pursuant to this rule no later than 7 days after service of the order
instituting proceedings. In a proceeding in which a temporary cease-and-desist order is sought
pursuant to Rule 510 or a temporary suspension of registration is sought pursuant to Rule 520,
documents shall be made available no later than the day after service of the decision as to whether to
issue a temporary cease-and-desist order or temporary suspension order.
49

(e) Place of inspection and copying. Documents subject to inspection and copying pursuant to this
rule shall be made available to the respondent for inspection and copying at the Commission office
where they are ordinarily maintained, or at such other place as the parties, in writing, may agree. A
respondent shall not be given custody of the documents or leave to remove the documents from the
Commission's offices pursuant to the requirements of this rule other than by written agreement of
the Division of Enforcement. Such agreement shall specify the documents subject to the agreement,
the date they shall be returned and such other terms or conditions as are appropriate to provide for
the safekeeping of the documents.
(f) Copying costs and procedures. The respondent may obtain a photocopy of any documents made
available for inspection. The respondent shall be responsible for the cost of photocopying. Unless
otherwise ordered, charges for copies made by the Division of Enforcement at the request of the
respondent will be at the rate charged pursuant to the fee schedule at 17 CFR 200.80e for copies.
The respondent shall be given access to the documents at the Commission's offices or such other
place as the parties may agree during normal business hours for copying of documents at the
respondent's expense.
(g) Issuance of investigatory subpoenas after institution of proceedings. The Division of Enforcement shall
promptly inform the hearing officer and each party if investigatory subpoenas are issued under the
same investigation file number or pursuant to the same order directing private investigation (“formal
order”) under which the investigation leading to the institution of proceedings was conducted. The
hearing officer shall order such steps as necessary and appropriate to assure that the issuance of
investigatory subpoenas after the institution of proceedings is not for the purpose of obtaining
evidence relevant to the proceedings and that any relevant documents that may be obtained through
the use of investigatory subpoenas in a continuing investigation are made available to each
respondent for inspection and copying on a timely basis.
(h) Failure to make documents available—harmless error. In the event that a document required to be
made available to a respondent pursuant to this rule is not made available by the Division of
Enforcement, no rehearing or redecision of a proceeding already heard or decided shall be required,
unless the respondent shall establish that the failure to make the document available was not
harmless error.
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Rule 231. Enforcement and disciplinary proceedings: Production of witness statements.
(a) Availability. Any respondent in an enforcement or disciplinary proceeding may move that the
Division of Enforcement produce for inspection and copying any statement of any person called or
to be called as a witness by the Division of Enforcement that pertains, or is expected to pertain, to
his or her direct testimony and that would be required to be produced pursuant to the Jencks Act,
18 U.S.C. 3500. For purposes of this rule, statement shall have the meaning set forth in 18 U.S.C.
3500(e). Such production shall be made at a time and place fixed by the hearing officer and shall be
made available to any party, provided, however, that the production shall be made under conditions
intended to preserve the items to be inspected or copied.
(b) Failure to produce—harmless error. In the event that a statement required to be made available
for inspection and copying by a respondent is not turned over by the Division of Enforcement, no
rehearing or redecision of a proceeding already heard or decided shall be required unless the
respondent establishes that the failure to turn over the statement was not harmless error.
Rule 232. Subpoenas.
(a) Availability; procedure. In connection with any hearing ordered by the Commission or any
deposition permitted under Rule 233, a party may request the issuance of subpoenas requiring the
attendance and testimony of witnesses at such depositions or at the designated time and place of
hearing, and subpoenas requiring the production of documentary or other tangible evidence
returnable at any designated time or place. Unless made on the record at a hearing, requests for
issuance of a subpoena shall be made in writing and served on each party pursuant to Rule 150. A
person whose request for a subpoena has been denied or modified may not request that any other
person issue the subpoena.
(1) Unavailability of hearing officer. In the event that the hearing officer assigned to a proceeding
is unavailable, the party seeking issuance of the subpoena may seek its issuance from the first
available of the following persons: The Chief Administrative Law Judge, the law judge most
senior in service as a law judge, the duty officer, any other member of the Commission, or any
other person designated by the Commission to issue subpoenas. Requests for issuance of a
subpoena made to the Commission, or any member thereof, must be submitted to the Secretary,
not to an individual Commissioner.
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(2) Signing may be delegated. A hearing officer may authorize issuance of a subpoena, and may
delegate the manual signing of the subpoena to any other person authorized to issue subpoenas.
(b) Standards for issuance. Where it appears to the person asked to issue the subpoena that the
subpoena sought may be unreasonable, oppressive, excessive in scope, or unduly burdensome, he or
she may, in his or her discretion, as a condition precedent to the issuance of the subpoena, require
the person seeking the subpoena to show the general relevance and reasonable scope of the
testimony or other evidence sought. If after consideration of all the circumstances, the person
requested to issue the subpoena determines that the subpoena or any of its terms is unreasonable,
oppressive, excessive in scope, or unduly burdensome, he or she may refuse to issue the subpoena,
or issue it only upon such conditions as fairness requires. In making the foregoing determination,
the person issuing the subpoena may inquire of the other participants whether they will stipulate to
the facts sought to be proved.
(c) Service. Service shall be made pursuant to the provisions of Rule 150(b) through (d). The
provisions of this paragraph (c) shall apply to the issuance of subpoenas for purposes of
investigations, as required by 17 CFR 203.8, as well as depositions and hearings.
(d) Tender of fees required. When a subpoena ordering the attendance of a person at a hearing or
deposition is issued at the instance of anyone other than an officer or agency of the United States,
service is valid only if the subpoena is accompanied by a tender to the subpoenaed person of the
fees for one day's attendance and mileage specified by paragraph (f) of this rule.
(e) Application to quash or modify.
(1) Procedure. Any person to whom a subpoena or notice of deposition is directed, or who is
an owner, creator or the subject of the documents that are to be produced pursuant to a
subpoena, or any party may, prior to the time specified therein for compliance, but in no event
more than 15 days after the date of service of such subpoena or notice, request that the
subpoena or notice be quashed or modified. Such request shall be made by application filed with
the Secretary and served on all parties pursuant to Rule 150. The party on whose behalf the
subpoena or notice was issued may, within five days of service of the application, file an
opposition to the application. If a hearing officer has been assigned to the proceeding, the
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application to quash shall be directed to that hearing officer for consideration, even if the
subpoena or notice was issued by another person.
(2) Standards governing application to quash or modify. If compliance with the subpoena or notice
of deposition would be unreasonable, oppressive, unduly burdensome or would unduly delay the
hearing, the hearing officer or the Commission shall quash or modify the subpoena or notice, or
may order a response to the subpoena, or appearance at a deposition, only upon specified
conditions. These conditions may include but are not limited to a requirement that the party on
whose behalf the subpoena was issued shall make reasonable compensation to the person to
whom the subpoena was addressed for the cost of copying or transporting evidence to the place
for return of the subpoena.
(3) Additional standards governing application to quash deposition notices or subpoenas filed pursuant to
Rule 233(a). The hearing officer or the Commission shall quash or modify a deposition notice or
subpoena filed or issued pursuant to Rule 233(a) unless the requesting party demonstrates that
the deposition notice or subpoena satisfies the requirements of Rule 233(a), and:
(i) The proposed deponent was a witness of or participant in any event, transaction,
occurrence, act, or omission that forms the basis for any claim asserted by the Division of
Enforcement, any defense, or anything else required to be included in an answer pursuant to
Rule 220(c) by any respondent in the proceeding (this excludes a proposed deponent whose
only knowledge of these matters arises from the Division of Enforcement's investigation or
the proceeding);
(ii) The proposed deponent is a designated as an "expert witness" under Rule 222(b);
provided, however, that the deposition of an expert who is required to submit a written
report under Rule 222(b) may only occur after such report is served; or
(iii) The proposed deponent has custody of documents or electronic data relevant to the
claims or defenses of any party (this excludes Division of Enforcement or other
Commission officers or personnel who have custody of documents or data that was
produced by the Division to the respondent).

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(f) Witness fees and mileage. Witnesses summoned before the Commission shall be paid the same
fees and mileage that are paid to witnesses in the courts of the United States, and witnesses whose
depositions are taken and the persons taking the same shall severally be entitled to the same fees as
are paid for like services in the courts of the United States. Witness fees and mileage shall be paid by
the party at whose instance the witnesses appear. Except for such witness fees and mileage, each
party is responsible for paying any fees and expenses of the expert witnesses whom that party
designates under Rule 222(b), for appearance at any deposition or hearing.
Rule 233. Depositions upon oral examination.
(a) Depositions upon written notice. In any proceeding under the 120-day timeframe designated
pursuant to Rule 360(a)(2), depositions upon written notice may be taken as set forth in this
paragraph. No other depositions shall be permitted except as provided in paragraph (b) of this rule.
(1) If the proceeding involves a single respondent, the respondent may file written notices to
depose no more than three persons, and the Division of Enforcement may file written notices to
depose no more than three persons.
(2) If the proceeding involves multiple respondents, the respondents collectively may file
joint written notices to depose no more than five persons, and the Division of Enforcement may
file written notices to depose no more than five persons. The depositions taken under this
paragraph (a)(2) shall not exceed a total of five depositions for the Division of Enforcement, and
five depositions for all respondents collectively.
(3) Additional depositions upon motion. Any side may file a motion with the hearing officer
seeking leave to notice up to two additional depositions beyond those permitted pursuant to
paragraphs (a)(1) and (2) of this rule.
(i) Procedure.
(A) A motion for additional depositions must be filed no later than 90 days prior to
the hearing date. Any party opposing the motion may submit an opposition within five
days after service of the motion. No reply shall be permitted. The motion and any
oppositions each shall not exceed seven pages in length. These limitations exclusively
govern motions under this rule; notwithstanding Rule 154(a), any points and authorities
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shall be included in the motion or opposition, with no separate statement of points and
authorities permitted, and none of the requirements in Rule 154(b) or (c) shall apply.
(B) Upon consideration of the motion and any opposing papers, the hearing officer
will issue an order either granting or denying the motion. The hearing officer shall
consider the motion on an expedited basis.
(C) The proceeding shall not automatically be stayed pending the determination of
the motion.
(ii) Grounds and standards for motion. A motion under this paragraph (a)(3) shall not be
granted unless the additional depositions satisfy Rule 232(e) and the moving side
demonstrates a compelling need for the additional depositions by:
(A) Identifying each of the witnesses whom the moving side plans to depose
pursuant to paragraph (a)(1) or (2) of this rule as well as the additional witnesses
whom the side seeks to depose;
(B) Describing the role of each witness and proposed additional witness;
(C) Describing the matters concerning which each witness and proposed additional
witness is expected to be questioned, a

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A0d7219e369b970d0. Public record. Not legal advice.