|
U.S. Code as of:
01/19/04
Section 79g. Declarations by registered companies in respect to security transactions
(a) Contents
A registered holding company or subsidiary company thereof may
file a declaration with the Commission, regarding any of the acts
enumerated in subsection (a) of section 79f of this title, in such
form as the Commission may by rules and regulations prescribe as
necessary or appropriate in the public interest or for the
protection of investors or consumers. Such declaration shall
include -
(1) such of the information and documents which are required to
be filed in order to register a security under section 77g 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; and
(2) such additional information, in such form and detail, and
such documents regarding the declarant or any associate company
thereof, the particular security and compliance with such State
laws as may apply to the act in question 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.
(b) Effective date of declaration; order of Commission
A declaration filed under this section shall become effective
within such reasonable period of time after the filing thereof as
the Commission shall fix by rules and regulations or order, unless
the Commission prior to the expiration of such period shall have
issued an order to the declarant to show cause why such declaration
should become effective. Within a reasonable time after an
opportunity for hearing upon an order to show cause under this
subsection, unless the declarant shall withdraw its declaration,
the Commission shall enter an order either permitting such
declaration to become effective as filed or amended, or refusing to
permit such declaration to become effective. Amendments to a
declaration may be made upon such terms and conditions as the
Commission may prescribe.
(c) Conditions precedent to permitting declaration to become
effective
The Commission shall not permit a declaration regarding the issue
or sale of a security to become effective unless it finds that -
(1) such security is (A) a common stock having a par value and
being without preference as to dividends or distribution over,
and having at least equal voting rights with, any outstanding
security of the declarant; (B) a bond (i) secured by a first lien
on physical property of the declarant, or (ii) secured by an
obligation of a subsidiary company of the declarant secured by a
first lien on physical property of such subsidiary company, or
(iii) secured by any other assets of the type and character which
the Commission by rules and regulations or order may prescribe as
appropriate in the public interest or for the protection of
investors; (C) a guaranty of, or assumption of liability on, a
security of another company; or (D) a receiver's or trustee's
certificate duly authorized by the appropriate court or courts;
or
(2) such security is to be issued or sold solely (A) for the
purpose of refunding, extending, exchanging, or discharging an
outstanding security of the declarant and/or a predecessor
company thereof or for the purpose of effecting a merger,
consolidation, or other reorganization; (B) for the purpose of
financing the business of the declarant as a public-utility
company; (C) for the purpose of financing the business of the
declarant, when the declarant is neither a holding company nor a
public-utility company; and/or (D) for necessary and urgent
corporate purposes of the declarant where the requirements of the
provisions of paragraph (1) of this subsection would impose an
unreasonable financial burden upon the declarant and are not
necessary or appropriate in the public interest or for the
protection of investors or consumers; or
(3) such security is one the issuance of which was authorized
by the company prior to January 1, 1935, and which the Commission
by rules and regulations or order authorizes as necessary or
appropriate in the public interest or for the protection of
investors or consumers.
(d) Conditions having permission of effectiveness
If the requirements of subsections (c) and (g) of this section
are satisfied, the Commission shall permit a declaration regarding
the issue or sale of a security to become effective unless the
Commission finds that -
(1) the security is not reasonably adapted to the security
structure of the declarant and other companies in the same
holding-company system;
(2) the security is not reasonably adapted to the earning power
of the declarant;
(3) financing by the issue and sale of the particular security
is not necessary or appropriate to the economical and efficient
operation of a business in which the applicant lawfully is
engaged or has an interest;
(4) the fees, commissions, or other remuneration, to whomsoever
paid, directly or indirectly, in connection with the issue, sale,
or distribution of the security are not reasonable;
(5) in the case of a security that is a guaranty of, or
assumption of liability on, a security of another company, the
circumstances are such as to constitute the making of such
guaranty or the assumption of such liability an improper risk for
the declarant; or
(6) the terms and conditions of the issue or sale of the
security are detrimental to the public interest or the interest
of investors or consumers.
(e) Declaration regarding alterations, priorities, voting power,
and other rights of security holders
If the requirements of subsection (g) of this section are
satisfied, the Commission shall permit a declaration to become
effective regarding the exercise of a privilege or right to alter
the priorities, preferences, voting power, or other rights of the
holders of an outstanding security unless the Commission finds that
such exercise of such privilege or right will result in an unfair
or inequitable distribution of voting power among holders of the
securities of the declarant or is otherwise detrimental to the
public interest or the interest of investors or consumers.
(f) Order permitting declaration to become effective
Any order permitting a declaration to become effective may
contain such terms and conditions as the Commission finds necessary
to assure compliance with the conditions specified in this section.
(g) Compliance with State laws as condition to permission of
effectiveness
If a State commission or State securities commission, having
jurisdiction over any of the acts enumerated in subsection (a) of
section 79f of this title, shall inform the Commission, upon
request by the Commission for an opinion or otherwise, that State
laws applicable to the act in question have not been complied with,
the Commission shall not permit a declaration regarding the act in
question to become effective until and unless the Commission is
satisfied that such compliance has been effected.
|
|