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U.S. Code as of:
01/19/04
Section 79f. Unlawful transactions by registered companies
(a) Issuing, selling, or altering rights of stockholders to
declaration
Except in accordance with a declaration effective under section
79g of this title and with the order under such section permitting
such declaration to become effective, it shall be unlawful for any
registered holding company or subsidiary company thereof, by use of
the mails or any means or instrumentality of interstate commerce,
or otherwise, directly or indirectly (1) to issue or sell any
security of such company; or (2) to exercise any privilege or right
to alter the priorities, preferences, voting power, or other rights
of the holders of an outstanding security of such company.
(b) Exemptions from operation of subsection (a)
The provisions of subsection (a) of this section shall not apply
to the issue, renewal, or guaranty by a registered holding company
or subsidiary company thereof of a note or draft (including the
pledge of any security as collateral therefor) if such note or
draft (1) is not part of a public offering, (2) matures or is
renewed for not more than nine months, exclusive of days of grace,
after the date of such issue, renewal, or guaranty thereof, and (3)
aggregates (together with all other then outstanding notes and
drafts of a maturity of nine months or less, exclusive of days of
grace, as to which such company is primarily or secondarily liable)
not more than 5 per centum of the principal amount and par value of
the other securities of such company then outstanding, or such
greater per centum thereof as the Commission upon application may
by order authorize as necessary or appropriate in the public
interest or for the protection of investors or consumers. In the
case of securities having no principal amount or no par value, the
value for the purposes of this subsection shall be the fair market
value as of the date of issue. The Commission by rules and
regulations or order, subject to such terms and conditions as it
deems appropriate in the public interest or for the protection of
investors or consumers, shall exempt from the provisions of
subsection (a) of this section the issue or sale of any security by
any subsidiary company of a registered holding company, if the
issue and sale of such security are solely for the purpose of
financing the business of such subsidiary company and have been
expressly authorized by the State commission of the State in which
such subsidiary company is organized and doing business, or if the
issue and sale of such security are solely for the purpose of
financing the business of such subsidiary company when such
subsidiary company is not a holding company, a public-utility
company, an investment company, or a fiscal or financing agency of
a holding company, a public utility company, or an investment
company. The provisions of subsection (a) of this section shall not
apply to the issue, by a registered holding company or subsidiary
company thereof, of a security issued pursuant to the terms of any
security outstanding on January 1, 1935, giving the holder of such
outstanding security the right to convert such outstanding security
into another security of the same issuer or of another person, or
giving the right to subscribe to another security of the same
issuer or another issuer. Within ten days after any issue, sale,
renewal, or guaranty exempted from the application of subsection
(a) of this section by or under authority of this subsection, such
holding company or subsidiary company thereof shall file with the
Commission a certificate of notification in such form and setting
forth such of the information required in a declaration under
section 79g of this title as the Commission may by rules and
regulations or order prescribe as necessary or appropriate in the
public interest or for the protection of investors or consumers.
(c) Selling from house to house; causing officer or employer of
subsidiary to sell
It shall be unlawful, by use of the mails or any means or
instrumentality of interstate commerce, or otherwise, for any
registered holding company or any subsidiary company thereof,
directly or indirectly -
(1) to sell or offer for sale or to cause to be sold or offered
for sale, from house to house, any security of such holding
company; or
(2) to cause any officer or employee of any subsidiary company
of such holding company to sell or cause to be sold any security
of such holding company.
As used in this subsection the term "house" shall not include an
office used for business purposes.
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