(c) Copies of the application and other papers filed by either party will be served by the Secretary on the other party, except that such service. will be considered unnecessary where the papers are filed by the association on behalf of the broker or dealer. Within 20 days after the service of an application on it, the association may file a statement of its position and such other material as it deems appropriate. The applicant may respond to this material within 10 days.

(d) Where it deems it appropriate to do so, the Commission may grant or deny an application on the basis of the papers filed by the parties, without oral hearing. Any objection to such procedure or request for oral hearing or argument should be submitted promptly and, if the Commission invites public comment on the application, within such time as may be specified in the notice inviting such comment.

(e) The Rules of Practice shall apply to proceedings under this rule to the extent that they are not inconsistent with this rule. Attention is directed particularly to section 201.22, Rule 22 of the Rules of Practice, relating to form of papers and number of copies to be filed.

(Amended para. (a) eff. Sept. 1, 1964, Release 34-7408. Formerly Rule 15ab-1, renumbered. Release 34-7700, dated Sept. 10, eff. Sept. 24, 1965.)

Rule 15Ag-1. Application Pursuant to Section 15A(g) of the Act for Review of Disciplinary Action or Denial of Membership by a Registered Securities Association

(a) Proceedings on an application under section 15A (g) of the Act to review disciplinary action taken by a registered securities association or the action of such an association in denying admission to any broker or dealer seeking membership therein shall be governed by this rule. If the action complained of was based on the provisions of section 15A (b) (3), 15A (b) (4), or 15A (b) (5) of the Act or on any effective rule of such association adopted under such sections, application for relief should ordinarily be filed under Rule 15ab-1 and not under this rule, and any such application filed under this rule will be dismissed summarily unless it plainly alleges, with supporting detail, that the specific grounds on which the association's action was based did not exist in fact or were not valid under section 15A (b) (3), 15A(b) (4) or 15A (b) (5) of the Act or under any effective rule of the association adopted under such sections.

(b) An original and two copies of an application pursuant to section 15A (g) of the Act for review of action taken by a registered securities association shall be filed with the Commission within 30 days after such action has been taken. The Secretary will serve a copy of the application on the association, which shall, within 10 days after receipt of the copy of the application, certify and file with the Commission the original, or one copy, of the record upon which the order complained of was entered, together with three copies of an index to such record. The Secretary will serve upon the parties copies of such index and any papers subsequently filed.

(c) Within 20 days after receipt of a copy of the index, the applicant shall file seven copies of a brief or other statement in support of his application which shall state the specific grounds on which the application is based, the particular findings of the association to which he objects, and the relief sought. Any application not perfected by such a timely brief or statement covering at least the points mentioned above may be dismissed as abandoned.

(d) Within 20 days after receipt of applicant's brief or statement the association may file seven copies of an answer to the applicant's brief or statement and within 10 days of receipt of any such answer the applicant may file seven copies of a reply thereto. Any such papers not filed within the time provided will not be received except upon special permission of the Commission.

(e) On its own motion, the Commission may direct that the record under review be supplemented with such additional evidence as it may deem relevant. However, the association and persons who may be aggrieved by its action shall be obliged to adduce all evidence that they deem relevant in the proceedings before the association, and no such person shall be entitled to adduce additional evidence unless he shows to the satisfaction of the Commission that such additional evidence is material and that there were reasonable grounds for his failure to adduce such evidence in the hearings before the association. Any requests for leave to adduce additional evidence shall be filed promptly so as not to delay the disposition of the proceeding.

(f) Oral argument before the Commission may be requested by the applicant or the association as

follows: (1) by the association, with its answer, or on or before the date such answer would be required to be filed; or (2) by the applicant, within 10 days after receipt of the association's answer, or if no such answer is filed, within 30 days after the date on which the applicant filed his brief or statement. The Commission in its discretion may grant or deny any such request, and where it deems it appropriate to do so the Commission will grant or deny an application on the basis of the papers filed by the parties, without oral argument.

(g) The Rules of Practice shall apply to review proceedings under section 15A (g) and (h) of the Act to the extent that they are not inconsistent with this rule.

(Amended paras. (a) and (b) eff. Sept. 1, 1964, Release 34-7408. Formerly Rule 15ag-1, renumbered. Release 347700, dated Sept. 10, eff. Sept. 24, 1965.)

Rule 15Aj-1. Amendments and Supplements to Registration Statements of Securities Associations

Every association applying for registration or registered as a national securities association or as an affiliated securities association shall keep its registration statement up to date in the manner prescribed below:

(a) Amendments. Promptly after the discovery of any inaccuracy in the registration statement or in any amendment or supplement thereto the association shall file with the Commission an amendment correcting such inaccuracy.

(b) Current supplements. Promptly after any change which renders no longer accurate any information contained or incorporated in the registration statement or in any amendment or supplement thereto the association shall file with the Commission a current supplement setting forth such change, except that

(1) Supplements setting forth changes in the information called for in exhibit C need not be filed until 10 days after the calendar month in which the changes occur, and

(2) No current supplements need be filed with respect to changes in the information called for in exhibit B.

(3) If changes in the information called for in items (1) and (2) of exhibit C are reported in any record which is published at least once a month by the association and promptly filed in triplicate with the Commission, no current supplement need be filed with respect thereto.

(c) Annual supplements. (1) Promptly after March 1 of each year, the association shall file with the Commission an annual consolidated supplement as of such date on Form X-15AJ-2.

(2) Promptly after the close of each fiscal year of the association, it shall file with the Commission a supplement setting forth its balance sheet as of the close of such year and its income and expense statement for such year.

(d) Each amendment or supplement shall be filed in triplicate, at least one of which must be signed and attested, in the same manner as required in the case of the original registration statement, and must conform to the requirements of Form X-15AJ-1, except that the annual consolidated supplement shall be filed on Form X-15AJ2. All amendments and supplements shall be dated and numbered in order of filing. One amendment or supplement may include any numbers of changes. In addition to the formal filing of amendments and supplements above described, each association shall send to the Commission three copies of any notices, reports, circulars, loose-leaf insertions, riders, new additions, lists, or other records of changes covered by amendments or supplements when, as, and if such records are made available to members of the association.

(Formerly Rule 15aj-1, renumbered. Release 34-7700, dated Sept. 10, eff. Sept. 24, 1965.)

Rule 15A/2-1. Proceeding under Section 15A (1) (2) of the Act

To the extent that a proceeding under section 15A (7) (2) of the Act involves the conduct of any person other than a member of a national securities association, it shall be governed by the provisions of Rule 15b7-1.

(Formerly Rule 15a/2-1, renumbered and amended. Release 34-7700, dated Sept. 10, eff. Sept. 24, 1965.)

Rule 16a-1. Filing of Statements

(a) Initial statements of beneficial ownership of equity securities required by section 16(a) of the Act shall be filed on Form 3. Statements of changes in such beneficial ownership required by that section shall be filed on Form 4. All such statements shall be prepared and filed in accordance with the requirements of the applicable form. (b) A person who is already filing statements pursuant to section 16(a) of the Act with respect to equity securities registered pursuant to either section 12(b) or 12(g) of the Act need not file an additional statement on Form 3

(1) when an additional class of equity securities of the same issuer becomes registered pursuant to the same subsection of the Act; or

(2) if any class of equity securities is registered pursuant to section 12(b), when another class of equity securities of the same issuer becomes registered pursuant to section 12(g); or

(3) when such person assumes another or an additional relationship to the issuer; for example, when an officer becomes a director.

(c) Any issuer which has equity securities listed on more than one national securities exchange may designate one such exchange as the only exchange with which reports pursuant to section 16(a) of the Act need be filed. Such designation shall be made in writing and shall be filed with the Commission and with each national securities exchange on which any equity security of the issuer is listed. After the filing of such designation the securities of such issuer shall be exempted with respect to the filing of statements pursuant to section 16(a) of the Act with any exchange other than the designated exchange.

(Amended para. (b) Feb. 5, eff. Mar. 8, 1965, Release 34-7525.)

Rule 16a-2. Ownership of More Than Ten Percent of an Equity Security

In determining, for the purpose of section 16 (a) of the Act whether a person is the beneficial owner, directly or indirectly, of more than 10 percent of any class of any equity security, such class shall be deemed to consist of the total amount of such class which has been issued, regardless of whether any part of such amount is held by or for the account of the issuer; except that for the purpose of deter

mining the percentage of ownership of voting trust certificates or certificates of deposit for equity securities, the class of voting trust certificates or certificates of deposit shall be deemed to consist of the entire amount of voting trust certificates or certificates of deposit issuable in respect of the class of equity securities which may be deposited under the voting trust agreement or deposit agreement in question, whether or not all of such class has been so deposited.

(Amended Feb. 5, eff. Mar. 8, 1965, Release 34-7525.) Rule 16a-3. Disclaimer of Beneficial Ownership

Any person filing a statement may expressly declare therein that the filing of such statement shall not be construed as an admission that such person is, for the purpose of section 16 of the Act, the beneficial owner of any equity securities covered by the statement.

Rule 16a-4. Exemptions From Sections 16(a) and 16(b) of the Act

(a) During the period of 12 months following their appointment and qualification, securities held by the following persons shall be exempt from section 16(a) and 16(b) of the Act.

(1) Executors or administrators of the estate of a decedent;

(2) Guardians or committees for an incompetent; and

(3) Receivers, trustees in bankruptcy, assignees for the benefit of creditors, conservators, liquidating agents, and other similar persons duly authorized by law to administer the estate or assets of other persons.

(b) After the 12-month period following their appointment or qualification the foregoing persons shall be required to file reports with respect to the securities held by the estates which they administer under section 16(a) and shall be liable for profits realized from trading in such securities pursuant to section 16(b) only when the estate being administered is a beneficial owner of more than 10 percent of any class of equity security (other than an otherwise exempted security) which is registered pursuant to section 12 of the Act.

(c) Securities reacquired by or for the account of an issuer and held by it for its account shall be

exempt from sections 16 (a) and 16(b) during the time they are held by the issuer.

(Amended paras. (a), (b) and added para. (c), Feb. 5, eff. Mar. 8, 1965, Release 34-7525.)

Rule 16a-5. Exemption From Section 16 of Securities Purchased or Sold by Odd-Lot Dealers

Securities purchased or sold by an odd-lot dealer (1) in odd lots so far as reasonablly necessary to carry on odd-lot transactions or (2) in round lots to offset odd-lot transactions previously or simultaneously executed or reasonably anticipated in the usual course of business, shall be exempt from the provision of section 16, with respect to participation by such odd-lot dealer in such transactions.

Rule 16a-6. Certain Transactions Subject to Section 16(a)

The acquisition or disposition of any transferable option, put, call, spread or straddle shall be deemed such a change in the beneficial ownership of the securities to which such privilege relates as to require the filing of a statement reflecting the acquisition or disposition of such privilege. Nothing in this paragraph, however, shall exempt any person from filing the statements required upon the exercise of such option, put, call, spread or straddle.

Rule 16a-7. Statements Filed Under More Than One Act

Any person required to file a statement under both section 16(a) of the Act and section 17 (a) of the Public Utility Holding Company Act of 1935 or section 30(f) of the Investment Company Act of 1940 may file a single statement containing the required information which will be deemed to be filed under both Acts. To comply with the requirment of section 16(a), where applicable, that statements be filed with national securities exchanges, a duplicate original of such statement shall be filed with such exchanges or with the exchange designated pursuant to Rule 16a-1(c). Rule 16a-8. Ownership of Securities Held in Trust

(a) Beneficial ownership of a security for the purpose of section 16 (a) shall include:

(1) the ownership of securities as a trustee where either the trustee or members of his im

mediate family have a vested interest in the income or corpus of the trust,

(2) the ownership of a vested beneficial interest in a trust, and

(3) the ownership of securities as a settlor of a trust in which the settlor has the power to revoke the trust without obtaining the consent of all the beneficiaries;

(b) Except as provided in paragraph (c) hereof, beneficial ownership of securities solely as a settlor or beneficiary of a trust shall be exempt from the provisions of section 16 (a) where less than 20 percent in market value of the securities having a readily ascertainable market value held by such trust, determined as of the end of the preceding fiscal year of the trust, consists of equity securities with respect to which reports would otherwise be required. Exemption is likewise accorded from section 16 (a) with respect to any obligation which would otherwise be imposed solely by reason of ownership as settlor or beneficiary of securities held in trust, where the ownership, acquisition, or disposition of such securities by the trust is made without prior approval by the settlor or beneficiary. No exemption pursuant to this subsection shall, however, be acquired or lost solely as a result of changes in the value of the trust assets during any fiscal year or during any time when there is no transaction by the trust in the securities otherwise subject to the reporting requirements of section 16 (a).

(c) In the event that 10 percent of any class of any equity security (other than an exempted security) which is registered pursuant to section 12 of the Act is held in a trust, that trust and the trustees thereof as such shall be deemed a person required to file the reports specified in section 16(a) of the Act.

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(d) Not more than one report need be filed to report any holdings or with respect to any action in securities held by a trust, regardless of the number of officers, directors or 10 percent stockholders who are either trustees, settlors, or beneficiaries of a trust: Provided, That the report filed shall disclose the names of all trustees, settlors and beneficiaries who are officers, directors or 10 percent stockholders. A person having an interest only as a beneficiary of a trust shall not be required to file any such report so long as he relies in good faith upon an understanding that the trustees of