SANCTIONS AGAINST INVESTMENT ADVISERS OR PERSONS ASSOCIATED OR SEEKING ASSOCIATION WITH A REGISTERED INVESTMENT ADVISER OR INVESTMENT COMPANY.

SEC. 205. SANCTIONS AGAINST INVESTMENT ADVISERS OR PERSONS ASSOCIATED OR SEEKING ASSOCIATION WITH A REGISTERED INVESTMENT ADVISER OR INVESTMENT COMPANY. (a) Investment Company Act of 1940.— Section 9(b) of the Investment Company Act of 1940 (15 U.S.C. 80a–9(b)) is amended— (1) by striking “or” at the end of paragraphs (1) and (2); (2) by striking the period at the end of paragraph (3) and inserting a semicolon; and (3) by inserting after paragraph (3) the following: “(4) has been found by a foreign financial regulatory authority to have— “(A) made or caused to be made in any application for registration or report required to be filed with a foreign securities authority, or in any proceeding before a foreign securities authority with respect to registration, any statement that was at the time and in light of the circumstances under which it was made false or misleading with respect to any material fact, or has omitted to state in any application or report to a foreign securities authority any material fact that is required to be stated therein; “(B) violated any foreign statute or regulation regarding transactions in securities or contracts of sale of a commodity for future delivery traded on or subject to the rules of a contract market or any board of trade; 104 STAT. 2719 “(C) aided, abetted, counseled, commanded, induced, or procured the violation by any other person of any foreign statute or regulation regarding transactions in securities or contracts of sale of a commodity for future delivery traded on or subject to the rules of a contract market or any board of trade; “(5) within 10 years has been convicted by a foreign court of competent jurisdiction of a crime, however denominated by the laws of the relevant foreign government, that is substantially equivalent to an offense set forth in paragraph (1) of subsection (a); or “(6) by reason of any misconduct, is temporarily or permanently enjoined by any foreign court of competent jurisdiction from acting in any of the capacities, set forth in paragraph (2) of subsection (a), or a substantially equivalent foreign capacity, or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any security.”. (b) Investment Advisers Act of 1940.— Section 203(e) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(e)) is amended— (1) in paragraph (2) by inserting after “misdemeanor” the following: “or of a substantially equivalent crime by a foreign court of competent jurisdiction”; (2) in paragraph (2)(A), by inserting after “burglary,” the following: “any substantially equivalent activity however denominated by the laws of the relevant foreign government,”; (3) in paragraphs (2)(B) and (3)— (A) by inserting after “transfer agent,” the following: “foreign person performing a function substantially equivalent to any of the above,”; and (B) after “Commodity Exchange Act” each place it appears, the following: “or any substantially equivalent statute or regulation”; (4) in paragraph (2)(C), by inserting after “securities” the following: “or substantially equivalent activity however denominated by the laws of the relevant foreign government”; (5) in paragraph (2)(D) by inserting after “United States Code” the following: “, or a violation of substantially equivalent foreign statute”; (6) in paragraph (3)— (A) by inserting after “court of competent jurisdiction” the following: “, including any foreign court of competent jurisdiction,”; and (B) by inserting after “insurance company,” the following: “foreign entity substantially equivalent to any of the above,”; (7) in paragraph (5), by inserting after “this title,” the following: “the Commodity Exchange Act,”; and (8) by inserting after paragraph (6) the following new paragraph: “(7) has been found by a foreign financial regulatory authority to have— “(A) made or caused to be made in any application for registration or report required to be filed with a foreign securities authority, or in any proceeding before a foreign securities authority with respect to registration, any statement that was at the time and in light of the circumstances104 STAT. 2720 under which it was made false or misleading with respect to any material fact, or has omitted to state in any application or report to a foreign securities authority any material fact that is required to be stated therein; “(B) violated any foreign statute or regulation regarding transactions in securities or contracts of sale of a commodity for future delivery traded on or subject to the rules of a contract market or any board of trade; “(C) aided, abetted, counseled, commanded, induced, or procured the violation by any other person of any foreign statute or regulation regarding transactions in securities or contracts of sale of a commodity for future delivery traded on or subject to the rules of a contract market or any board of trade, or has been found, by the foreign finanical regulatory authority, to have failed reasonably to supervise, with a view to preventing violations of statutory provisions, and rules and regulations promulgated thereunder, another person who commits such a violation, if such other person is subject to his supervision.”. (c) Conforming Amendment.— Section 203(f) of the Investment Advisers Act of 1940 (15 U.S.C. 80b—3(f)) is amended by striking “paragraph (1), (4), or (5)” and inserting “paragraph (1), (4), (5), or (7)”.