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UNLISTED TRADING PRIVILEGES-Continued

SUFFICIENCY OF PROOF OF DISTRIBUTION

Sufficient public distribution cannot be inferred from the sole circumstances 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.

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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 FROM LISTING-Continued

Terms

Fact that delisting granted on application of an exchange relieves a company of the necessity of filing annual reports under the Act held not to warrant the imposition 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 appropriate for the protection of investors that the registration of its securities on a national securities exchange be withdrawn ... Page 531.

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 deficiencies in its answers to Form 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

RECORDING OF INVESTMENTS

ACCOUNTING

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 or 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 refers to the Public Utility Holding Company Act of 1935.

1051

ACQUISITION OF SECURITIES BY REGISTERED HOLDING

COMPANY OR SUBSIDIARY-Continued

sold to the public and the proceeds of the sale to be used with other funds to make a payment of $3,000,000 to holding company, which in turn will make a like payment to its parent company, on alleged indebtedness due it, which company will use the cash to make a payment in connection with an offer in compromise to the Collector of Internal Revenue in settlement of certain claims for additional income taxes, approved, subject to certain conditions. . . Page 199.

Application, having been filed by a subsidiary of a registered holding company, pursuant to Section 10 (a) (1) of the Act, for approval of the acquisition of 2,500 shares of old 5% cumulative preferred stock of an associate company from another. associate company, approved, subject to certain conditions. . . Page 199.

A subsidiary of a registered holding company having filed an application pursuant to Section 10 of the Act, for approval of the acquisition of notes and common stock of an associate company, approval granted, the Commission observing no basis for making adverse findings under Section 10 of the Act . . . Page 309. A registered holding company having filed an application pursuant to Section 10 of the Act for approval of the acquisition of notes and stock of an associate company, approval granted, subject to certain conditions, where, although in view of other holdings of applicant, the standards of Section 10 (c) could not be met by a permanent acquisition, the Commission was satisfied that the circumstances of the case did not require it to make adverse findings under Section 10 (e), the sale and other transactions being designed to carry out the Section 11 (b) program of applicant, and stipulations afforded assurance of the liquidation within a reasonable period of time of applicant's interest in the associate... Page 309.

Application, having been filed by a registered holding company pursuant to Section 10 (a) (1) of the Act for approval of its acquisition of common stock from four subsidiary companies, approved, subject to certain conditions... Page 359. Application, having been filed by a registered holding company pursuant to Section 10 (a) (1) of the Act for approval of the acquisition of a 6% unsecured income note in the principal amount of $23,500 and 5,000 shares of $10 par value common stock, approved subject to certain conditions, the Commission finding that the requirements of Section 10 (c) have been met and that the requirements of Section 10 (f) are satisfied ... Page 437.

Application, filed by registered holding company pursuant to Section 10 of the Act for approval of the acquisition by it of 2,600 shares of common stock of $10 par value and a 6% unsecured promissory note in the principal amount of $90,000, approved, subject to certain conditions, the Commission finding that such acquisition will not be detrimental to the carrying out of the provisions of Section 11 and that the requirements of Section 10 (c) have been met and Section 10 (f) satisfied... Page 549.

Joint application, having been filed by a registered holding company and its subsidiary company pursuant to Section 10 of the Act for approval of the acquisition of certain securities and extension agreements of a nonutility holding company and its nonutility subsidiaries, the securities to be acquired representing renewals and extensions of notes held by the applicants, approved, subject to certain conditions, the Commission finding that such acquisition will not be detrimental to the carrying out of the provisions of Section 11, but reserving jurisdiction as to the value at which the proposed notes to be acquired should be reflected upon applicants' books... Page 680.

ACQUISITION OF SECURITIES BY REGISTERED HOLDING
COMPANY OR SUBSIDIARY-Continued

Application, filed by a registered holding company pursuant to Section 10 of the Act for approval of the acquisition by it of three 4%% promissory notes aggregating $39,375, to be issued by a subsidiary company in exchange for and to refund and discharge three similar 42% notes held by the applicant, approved, subject to certain conditions, the Commission finding that all requirements of Section 10 of the Act have been met... Page 725.

Application, having been filed by a registered holding company, pursuant to Section 10 of the Act, regarding the acquisition of all the issued and outstanding common stock of a water corporation from a registered holding company, for a cash consideration of $3,202,000, applicant to raise the funds necessary to consummate the proposed acquisition by the issue and sale of a 3% note in the face amount of $1,200,000, by the issue and sale of a 6% note not to exceed $1,100,000 face amount and the balance to be supplied by applicant from its own treasury, approved subject to certain conditions, the Commission finding that the applicable standards of Section 10 of the Act had been met and that such acquisition is not detrimental to the carrying out of the provision of Section 11 of the Act... Page 765.

A combined application, filed by a registered holding company, pursuant to Section 10 (a) (1) and Section 12 (f) of the Act, for approval of the acquisition of a 44% debenture, due 1955, in the amount of $6,500,000 to be substituted by a subsidiary company for a debenture held by the applicant in a like amount, and for the approval of the surrender for redemption of the subsidiary's outstanding $10,000,000 5% debentures due 1952, approved subsequent to certain conditions, the Commission finding that the requirements of Section 10 and Rule U-12F-1 have been satisfied . . . Page 1004.

...

DEVELOPMENT OF AN INTEGRATED UTILITY SYSTEM

Application, having been filed by a subsidiary holding company, pursuant to Section 10 of the Act for approval of the acquisition by the applicant of all the capital stock and certain indebtedness of a public utility company which serves territory contiguous to that of a subsidiary of applicant, in exchange for all of the capital stocks and certain indebtedness of two subsidiaries of applicant, and $210,438.80 in cash, approved, subject to certain conditions, the Commission finding that the acquisition will tend towards the economical and efficient development of an integrated public utility system and will not be detrimental to the carrying out of the provisions of Section 11 of the Act... Page 88.

Application, filed by subsidiary of registered holding company, pursuant to Section 10 (a) (1) of the Act, for approval of the acquisition by it of common stock of a wholly owned subsidiary of the applicant, granted approval, subject to certain conditions, the Commission finding that such acquisition will serve the public interest by tending towards the economical and efficient development of an integrated public utility system. . . Page 101.

Application, filed by a registered holding company, pursuant to Section 10 of the Act, for approval of the acquisition of a 6% unsecured note in the principal amount of $500,000, issued by a subsidiary company in exchange for a similar note of the subsidiary held by the registered holding company in like principal amount, approved, subject to certain conditions, the Commission finding that the acquisition will serve the public interest by tending towards the economical and efficient development of an integrated public utility system ... Page 234,

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