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BROKER-DEALER REGISTRATION-Continued

the registrant had willfully failed to report his change of address to the Commission, held, pending fival determination on revocation, it is necessary and appropriate in the public interest and for the protection of investors that the broker-dealer's right to use the mails and instruments of interstate commerce in securities transactions be suspended . . . Pages 570, 615, 617, 634, 636, 638.

DEFINITIONS "SERVICE CONTRACT"

Where the issuer has joined with other subsidiaries of the parent company "in a cooperative effort to obtain services needed by all of them and to that end have created various departments for their common use," and where the expenses are, in the first instance defrayed by the parent company and periodically apportioned among the subsidiaries held such agreement constitutes a service contract and information relating thereto must be submitted in response to appropriate items of Form 10-K ... Page 449.

PRACTICE AND PROCEDURE

DETERMINATION OF JURISDICTIONAL AND CONSTITUTIONAL QUESTIONS

The Commission will assume the constitutionality of statutes administered by it, in considering a motion to quash and dismiss an order for hearing on constitutional grounds . . . Page 112. MOTION FOR BILL OF PARTICULARS

A motion for a bill of particulars concerning the matters to be considered in a hearing ordered by the Commission, which seeks to have the Commission plead its evidence, will be denied ... Page 109. POWER TO INSTITUTE PROCEEDINGS

The provision of Section 27 of the Securities Exchange Act of 1934 that “The district courts ... shall have exclusive jurisdiction of violations of this title and of all suits in equity and actions at law brought to enforce any liability or duty created by this title ..." does not deprive the Commission of jurisdiction to conduct the proceedings provided for by Sections 15 (b) and 19 (a) (3) of the Act, or other administrative proceedings provided for by the Act . . . Page 112. SUFFICIENCY OF ORDER FOR HEARING

An order for hearing is sufficient if it gives to the persons concerned reasonable notice of the matters to be considered .. Page 109.

UNLISTED TRADING PRIVILEGES

ADEQUACY OF DISTRIBUTION AND TRADING ACTIVITY IN APPLICANT'S

VICINITY Applicant held to have established sufficient public distribution and public trading activity in its vicinity (as previously determined) with regard to securities for which unlisted trading privileges were sought to render the extension of such privileges thereto appropriate in the public interest and for protection of investors ... Pages 32, 36, 42, 248, 266, 389, 943.

Application for extension of unlisted trading denied where it appeared that there was insufficient public distribution and trading activity ... Pages 32, 36, 42, 389, 943.

UNLISTED TRADING PRIVILEGES-Continued

Where applicant has not introduced satisfactory proof of sufficiently widespread distribution of, and sufficient public trading activity in, 11 securities, held that applications for extension of unlisted trading privileges should be held in abeyance pending the submission of additional data . . . Page 943. ADEQUACY OF DISTRIBUTION AND TRADING ACTIVITY WITHIN APPLI

CANT'S VICINITY Applicant held to have established sufficient public distribution and public trading activity within its vicinity (as previously determined) in securities for which unlisted trading privileges in round lots were sought to render the extension of such privileges thereto appropriate in the public interest and for the protection of investors . . . Pages 389, 949.

Applications for extension of unlisted trading in round lots denied as to one security due to insufficient public distribution and trading activity . . . Pages 889, 949. ADEQUACY OF OPERATING MECHANICS OF THE EXCHANGE

Increase in number of odd-lot dealers to compete with each other, closing applicant exchange 15 minutes later than New York Stock Exchange to equalize prices and requiring the members to check both primary and local markets and to place any order in the market appearing to afford the better execution of the order, held to accomplish objectives of the Commission . . . Page 32.

Upon adoption of designated rules, the operating mechanics of applicant exchange held to be such as to render it appropriate in the public interest to grant unlisted trading privileges thereto, provided the statutory requisites of public distribution and trading activity are satisfied . . . Page 266. ADEQUACY OF REPORTS FILED UNDER SECURITIES ACT OF 1933 TO SATISFY

SECTION 12 (f) (3) OF THE SECURITIES EXCHANGE ACT OF 1934 The registration of bonds under the Securities Act of 1933 coupled with the "undertaking” required by Section 15 (d) of the Securities Exchange Act of 1934 would normally insure that information will be supplied which would be substan tially equivalent to that available pursuant to rules and regulations of the Commission in respect of similar bonds duly listed and registered on a national secur. ities exchange within the meaning of the requirement of clause (3) of Section 12 (f) of the latter Act... Page 248. ADEQUACY OF ROUND-LOT TRADING PROCEDURE TO ESTABLISH EXCHANGE

AS AN INDEPENDENT SECONDARY MARKET Present operating mechanics of Boston Stock Exchange as to round-lot trading tend to establish it as an independent secondary market . . . Page 389. NECESSITY OR APPROPRIATENESS OF EXTENSION OF ODD-LOT AND

ROUND-LOT TRADING Where unlisted trading privileges in certain securities were granted to an applicant exchange only with respect to odd-lot trading and not to round-lot trading because of its exchange's practice of gearing round-lot trading to the trading on the primary exchange, and subsequently new rules have been adopted and made effective by the applicant exchange which appear to supply facilities for an independent market for unlisted trading in round lots held that it is appropriate in the public interest and for the protection of investors to extend to such exchange the privileges of unlisted trading in both round lots and odd lots to securities which otherwise satisfy the requirements of the statute .. Page 949.

UNLISTED TRADING PRIVILEGES--Continued

SUFFICIENCY OF PROOF OF DISTRIBUTION

Sufficient public distribution cannot be inferred from the sole circumstonces that the security is actively traded in the vicinity of the exchange but must be independently established . . . Page 943. SUFFICIENCY OF PROOF OF TRADING ACTIVITY

Evidence of the number of transactions in a security by members of the exchange without a showing of the area in which the transactions originated held insufficient proof of trading activity in the vicinity of the exchange Page 943. VIOINITY OF EXCHANGE Definition of Vicinity of Various Exchanges

Page Boston Stock Exchange.

389 Detroit Stock Exchange

943 New York Curb Exchange..

248 Philadelphia Stock Exchange

36, 949 Pittsburgh Stock Exchange

42 Wheeling Stock Exchange

266 Vicinity of Exchange

A claim to a larger area as the "vicinity of the applicant exchange will be disregarded if the public distribution and trading activity within the larger area are insufficient to satisfy the statutory standards . . . Page 32.

WITHDRAWAL FROM REGISTRATION AND STRIKING FROM LISTING

APPLICATION BY ISSUER OR EXCHANGE
Scope of Commission's Power

Where registrant's application to withdraw its common stock from listing and registration on a national securities exchange (1) indicated that only a small number of stockholders use the facilities of that exchange without benefit commensurate to the expense involved, and a free and open market was available on another exchange, (2) disclosed adequately the material facts with respect to volume of trading and the comparative costs of transfers, and (3) conformed to the Commission's rules and the rules of the exchange, held to require the granting of the application and a denial of a motion by the exchange to strike such application ... Page 397.

Where a national securities exchange, in its application to strike from listing a security listed thereon, complies with its own rules and with the rules and regulations of the Commission, held the Commission's authority does not extend beyond the imposition of conditions for the protection of investors in the granting of the application ... Pages 433, 435, 938, 979. Suspending Decision on Application

Where notice sent by registrant pursuant to Rule X-12D2-1 contained misleading statements of fact which might have deterred some of registrant's stockholders from presenting to the Commission facts relating to the terms which should be imposed for the protection of investors, held decision upon the application should be suspended until the registrant has sent a corrected notice to its stockholders and until such stockholders have had an opportunity to express their views ... Page 721.

WITHDRAWAL FROM REGISTRATION AND STRIKING PROX

LISTING—Continued Terms

Fact that delisting granted on application of an exchange relieves a company a the necessity of filing annual reports under the Act held not to warrant the impostion of terms and conditions in the Commission's order granting an application for delisting . . . Page 433.

Where registrant urged that listing be continued until company had developed a proposed plan for broadening activities, but where such plan would substantially alter its business, and adoption was uncertain, held exchange's application for delisting should be granted without terms . . . Page 435.

Where delisting will not deprive the stockholders of other markets nor will the hardship to stockholders be any different in kind from that which ordinarily results when securities are delisted, held not to be necessary or appropriate to impose terms for the protection of investors . . . Page 938.

Where neither the issuer nor the objecting stockholders suggest conditions, apart from a delay of 90 days, and where it does not appear that any conditions may be imposed which will afford protection from the disadvantages allegedly resulting from delisting, held, the application will be unconditionally granted ... Page 979. PROCEEDINGS BY COMMISSION Failure to File Adequate Annual Report

Where registrant filed incomplete annual report, held necessary and appropriste for the protection of investors that the registration of its securities on a national securities exchange be withdrawn ... Page 631. Failure to File Annual Report

Where the issuer of securities failed to comply with the provisions of Section 13 (a) of the Act and the rules and regulations thereunder, in that it failed to file the prescribed annual report, held, pursuant to Section 19 (a) (2) of the Act, that the withdrawal of the stock from registration is necessary and appropriate for the protection of investors . . . Page 941. Powers Regarding Suspension or Withdrawal of Registration

Where exchange in good faith made application to strike stock from listing and registration, and where registrant promptly filed amendments correcting deciencies in its answers to Forin 10 and Form 10-K held not necessary or appropriate for the protection of investors to institute Section 19 (a) (2) proceedings under the Act with respect to deficiencies. Application to strike granted ... Page 449.

5 S. E.C.

PART III PUBLIC UTILITY HOLDING COMPANY ACT* OF 1935

ACCOUNTING

RECORDING OF INVESTMENTS

Application, filed by a registered holding company pursuant to Instruction 8C to the Uniform System of Accounts for Public Utility Holding Companies, promulgated under Section 15 of the Act, requesting approval of proposed entries to record the transfer to it of the stocks of a subsidiary company, and other assets of a subsidiary, approved, subject to certain conditions . . . Page 897.

ACQUISITION OF SECURITIES BY REGISTERED HOLDING

COMPANY OR SUBSIDIARY APPROVAL:

A subsidiary company of a registered holding company presently in reorganization proceedings under Section 77B of the Bankruptcy Act, having filed an application for an order of exemption under Section 9 (c)(3) of the Act, or, in the alternative, an order of approval under Section 10 of the Act with respect to the purchase by the applicant of outstanding debentures of parent-debtor corporation pursuant to tenders and at a price to be fixed by the Commission until a sum of $12,000,000 or such other sum as the Commission may fix was exhausted; and the Commission having issued an initial order on the application approving the acquisition by the applicant of outstanding debentures and claims against the parent pursuant to tenders at 70 percent of the principal amount until a sum of $9,000,000 was exhausted without prejudice to the right to authorize the use of an additional amount not to exceed $3,000,000 for such purposes; the applicant having filed an amendment to the application for an order of exemption approval with respect to the purchase by the applicant of outstanding debentures of and claims against parent corporation pursuant to further tenders until an additional sum of $3,000,000 be exhausted, approval granted amended application subject to certain conditions set forth fully in the findings . . . Page 13.

Application, having been filed by a subsidiary of a registered holding company, pursuant to Section 10 of the Act for approval of the acquisition of the indebtedness of two public utility companies amounting to $190,000, together with $210,439 in cash, approved, subject to certain conditions . . . Page 88.

Application, having been filed by a subsidiary of a registered holding company, pursuant to Section 10 of the Act, regarding the acquisition of an option Agreement and lease from an associate company, approved subject to certain conditions ... Page 146.

Applications, having been filed by two subsidiaries of a registered holding company, pursuant to Section 10 (a) (1) of the Act, for approval of the acquisition of 30,724 shares of associate company's new preferred stock, from that company in exchange for old preferred stock of associate company, the new preferred to be

•The term "Act” as used in Part III of this Digest relers to the Public Utility Holding Company Act

of 1935.

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