PUBLIC LAWS-CH. 677-JUNE 25, 1938 statement whether the acts or practices prohibited by such rule or rules, or the omission of any act required thereby, are deemed to constitute conduct inconsistent with just and equitable prin- ciples of trade, and (D) a statement setting forth the penalty imposed. In any proceeding to determine whether a broker or dealer shall be denied membership, such rules shall provide that the broker or dealer shall be notified of, and be given an oppor- tunity to be heard upon, the specific grounds for denial which are under consideration; that a record shall be kept; and that the determination shall set forth the specific grounds upon which the denial is based; and "(10) the requirements of subsection (c), insofar as these may be applicable, are satisfied. Affaliated securities "(c) The Commission may permit or require the rules of an association. Participation in ap- association applying for registration pursuant to subsection (b), to plicant association as an affiliate. provide for the admission of an association registered as an affiliated securities association pursuant to subsection (d), to participation in said applicant association as an affiliate thereof, under terms per- mitting such powers and responsibilities to such affiliate, and under such other appropriate terms and conditions, as may be provided by the rules of said applicant association, if such rules appear to the Commission to be necessary or appropriate in the public interest or for the protection of investors and to carry out the purposes of this section. The duties and powers of the Commission with respect to any national securities association or any affiliated securities associa- tion shall in no way be limited by reason of any such affiliation. pRequirementss ofap- "(d) An applicant association shall not be registered as an affiliated securities association unless it appears to the Commission that- "(1) such association, notwithstanding that it does not satisfy the requirements set forth in paragraph (1) of subsection (b), will, forthwith upon the registration thereof, be admitted to affiliation with an association registered as a national securities association pursuant to said subsection (b), in the manner and under the terms and conditions provided by the rules of said national securities association in accordance with subsection (c); and "(2) such association and its rules satisfy the requirements set forth in paragraphs (2) to (9), inclusive, of subsection (b); except that in the case of any such association any restrictions upon membership therein of the type authorized by paragraph (3) of subsection (b) shall not be less stringent than in the case of the national securities association with which such association is to be affiliated. Registration if re- quiremet satisfie (e) U the filing of an application for registration pursuant to subsection (b) or subsection (d), the Commission shall by order grant such registration if the requirements of this section are ent sal i reqired satisfied. If, after appropriate notice and opportunity for hearing, it appears to the Commission that any requirement of this section is not satisfied, the Commission shall by order deny such registration. miFted to affibiaton If any association granted registration as an affiliated securities with registered na- association pursuant to subsection (d) shall fail to be admitted elation, e promptly thereafter to affiliation with a registered national securities association, the Commission shall revoke the registration of such affiliated securities association. reWithdria from "(f) A registered securities association (whether national or affiliated) may, upon such reasonable notice as the Commission may deem necessary in the public interest or for the protection of inves- tors, withdraw from registration by filing with the Commission a 1072 [52 STAT.
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