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VOLUME 18

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NUMBER 29

Washington, Thursday, February 12, 1953

TITLE 17 COMMODITY AND
SECURITIES EXCHANGES
Chapter II Securities and Exchange Commission Part 203C onduct of M embers ployees and F ormer M embers ployees of the C o m m issio n .

and and
Em Em
Statement of purpose. The Securi ties and Exchange Commission is adopt ing a comprehensive regulation to re state the ethical principles which it believes should govern and have gov erned the conduct of members and employees and former members and employees of the Commission. The regulation includes a general statement of policy following essentially language used by a Subcommittee of the Senate Committee on Labor and Public Welfare in its report on Ethical Standards in Government, and in the related bill, S.
2293, 82d Cong., 1st Sess., 1951. The regulation also deals more specifically with limitations on outside or private employment, securities transactions, dis closure to superiors of personal interests which might conflict with official duties, negotiation for private employment by persons interested in matters pending before the Commission, and practice be fore the Commission by former members and employees of the Commission.
The more specific regulations are largely a revision of existing rules set forth in memoranda of instructions which have been issued to the staff from time to time, and previously published opinions concerning the propriety of practice by former employees. Among other things, the revision makes it clear that the substantive rules apply to mem bers of the Commission as well as to employees. Some of the rules particu larly Rules 4 and 5 203.4 and 203.5
contain procedural provisions for ref erence of questions arising under the rules by an employee to his superior.
While the Commissioners themselves cannot refer such a problem to a supe rior, it is contemplated that, in case of doubt as to the applicability of the sub stantive provisions, they will either re frain from participation in the m atter or will request the advice of their associates, in accordance with past practice.
Paragraph a of Rule 6 203.6 a
Prohibits without limit of time former
members and employees from appearing before the Commission in a particular m atter with respect to which they had a prior official responsibility or specific knowledge. This rule is intended to be declaratory of the practice which the Commission has applied in the advisory rulings th at have been rendered from time to time in the past concerning the propriety of specific appearances by for mer members and employees. In a t tempting to state the rule in concrete terms, it is recognized th at the concept of what constitutes a particular m atter will require interpretation. In render ing such interpretations the basic policy consideration underlying the rule will require consideration of whether the ap pearance in question will involve an unethical conflict with prior official responsibilities.
Following is an illustration of the way the Commission believes Rule 6 a 203.6 a should be interpreted. An accountant on the Commissions staff has had occasion to deal officially with a reg istration statement or annual report for a particular company and after leaving the Commission joins an accounting firm which does accounting work for that company. In the absence of unusual circumstances, such an accountant would not be barred from doing accounting work in connection with future regis tration statements or annual reports for the same company. If, however, the ac countants official responsibilities had involved an investigation or accounting controversy of a continuing character, subsequent activities for the company involved, although pertaining to new filings, might be so related to the con tinuing investigation or controversy as to constitute an appearance in respect to the particular m atter previously dealt with on behalf of. the Commission.
Paragraph b of Rule 6 203.6 b
is a new provision which is designed to aid in the administration of the first part of the rule by requiring the filing of re ports covering all appearances before the Commission during the first two years after ceasing to be a member or employee of the Commission.
The new regulation supersedes the previous memoranda on Outside or Pri vate Employment dated Feb. 14, 1949
and on Employees Securities TransacContinued on next page
CONTENTS
Agriculture Department
PaS

See Production and Marketing
Administration.

Alien Property, Office of
Notices:
Diedrich, John; vesting o ld e r..

868

Army Department
Notices:
Office of Chief Signal Officer?
statement of organization and functions of agencies dealing with the public---------------Rules and regulations:
Army procurement procedure;
Bonds and insurance---------Contract clauses and forms Federal, State, and local taxes------ ------------------
Foreign purchases_ ______
General provisions--- .-----Interdepartmental procure ment--------------- ---------Labor.____ _ --------- -
Patents and copyrights-------Procurement by:
Formal advertising------------Negotiation----------Termination____ __________

859
857
856
857
855
853
855
857
857
854
855
857

Commerce Department See Federal Maritime Board.

Defense Department See Army Department.

Defense Materials Procurement Agency
Notices:
Deputy Administrator; delega tion to exercise the function and authority of Acting Ad ministrator--------- --------------

861

Economic Stabilization Agency See Price Stabilization, Office of.

Federal Communications Com mission
Notices:
Cuban Broadcast Stations; noti fication of new stations, list of changes, modifications and deletions of existing stations.

861

Federal Maritime Board
Notices:
Notice of agreements filed with Board for approval:
Compagnie General Trans atlantique et al--------------849

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