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hold office in the following manner: As soon as practicable after the date this Act takes effect the Federal Trade Commission (hereinafter in this title called “ Commission ") shall appoint six directors, and shall designate a chairman and a vice chairman from among their number. After the directors designated as chairman and vice chairman cease to be directors, their successors as chairman and vice chairman shall be elected by the board of directors itself. Of the directors first appointed, two shall continue in office for a term of two years, two for a term of four years, and two for a term of six years, from the date this Act takes effect, the term of each to be designated by the Commission at the time of appointment. Their successors shall be appointed by the Commission, each for a term of six years from the date of the expiration of the term for which his predecessor was appointed, except that any person appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed only for the unexpired term of such predecessor. No person shall be eligible to serve as a director who within the five years preceding has had any interest, direct or indirect, in any corporation, company, partnership, bank or association which has sold, or offered for sale any foreign securities. The office of a director shall be vacated if the board of directors shall at a meeting specially convened for that purpose by resolution passed by a majority of at least two thirds of the board of directors, remove such member from office, provided that the member whom it is proposed to remove shall have seven days' notice sent to him of such meeting and that he may be heard.

Sec. 203. The Corporation shall have power to adopt, alter, and use a corporate seal; to make contracts; to lease such real estate as may be necessary for the transaction of its business; to sue and be sued, to complain and to defend, in any court of competent jurisdiction, State or Federal; to require from trustees, financial agents, or dealers in foreign securities information relative to the original or present holders of foreign sécurities and such other information as may be required and to issue subpenas therefor; to take over the functions of any fiscal and paying agents of any foreign securities in default; to borrow money for the purposes of this title, and to pledge as collateral for such loans any securities deposited with the Corporation pursuant to this title; by and with the consent and approval of the Commission to select, employ, and fix the compensation of officers, directors, members of committees, employees, attorneys, and agents of the Corporation, without regard to the provisions of other laws applicable to the employment and compensation of officers or employees of the United States; to define their authority and duties, require bonds of them and fix the penalties thereof, and to dismiss at pleasure such officers, employees, attorneys, and agents; and to prescribe, amend, and repeal, by its board of directors, bylaws, rules, and regulations governing the manner in which its general business may be conducted and the powers granted to it by law may be exercised and enjoyed, together with provisions for such committees and the functions thereof as the board of directors may deem necessary for facilitating its business under this titlo. The board of directors of the Corporation shall determine and prescribe the manner in which its obligations shall be incurred and its expenses allowed and paid.

SEO. 204. The board of directors may-
(1) Convene meetings of holders of foreign securities.

(2) Invite the deposit and undertake the custody of foreign securi. ties which have defaulted in the payment either of principal or interest, and issue receipts or certificates in the place of securities so deposited.

(3) Appoint committees from the directors of the Corporation and/or all other persons to represent holders of any class or classes of foreign securities which have defaulted in the payment either of principal or interest and determine and regulate the functions of such committees. The chairman and vice chairman of the board of directors shall be ex officio chairman and vice chairman of each committee.

(4) Negotiate and carry out, or assist in negotiating and carrying out, arrangements for the resumption of payments due or in arrears in respect of any foreign securities in default or for rearranging the terms on which such securities may in future be held or for converting and exchanging the same for new securities or for any other object in relation thereto; and under this paragraph any plan or agreement made with respect to such securities shall be binding upon depositors, providing that the consent of holders resident in the United States of 60 per centum of the securities deposited with the Corporation shall be obtained.

(6) Undertake, superintend, or take part in the collection and application of funds derived from foreign securities which come into the possession of or under the control or management of the Corporation.

(6) Collect, preserve, publish, circulate, and render available in readily accessible form, when deemed essential or necessary, documents, statistics, reports, and information of all kinds in respect of foreign securities, including particularly records of foreign external securities in default and records of the progress made toward the payment of past-due obligations.

(7) Take such steps as it may deem expedient with the view of securing the adoption of clear and simple forms of foreign securities and just and sound principles in the conditions and terms thereof.

(8) Generally, act in the name and on behalf of the holders of foreign securities the care or representation of whose interests may be entrusted to the Corporation; conserve and protect the rights and interests of holders of foreign securities issued, sold, or owned in the United States; adopt measures for the protection, vindication, and preservation or reservation of the rights and interests of holders of foreign securities either on any default in or on breach or contemplated breach of the conditions on which such foreign securities may have been issued, or otherwise; obtain for such holders such legal and other assistance and advice as the board of directors may deem expedient; and do all such other things as are incident or conducive to the attainment of the above objects.

SEC. 205. The board of directors shall cause accounts to be kept of all matters relating to or connected with the transactions and business of the Corporation, and cause a general account and balance sheet of the Corporation to be made out in each year, and cause all accounts to be audited by one or more auditors who shall examine the same and report thereon to the board of directors.

Bection

85. Unlawful Representations and Names...-

(a) Unlawful to represent guarantee, sponsorship, recommendation,

or approval by United States or any agency in sale of any

security of investment company..

(b) Unlawful for any person to represent that he is sponsored,

recommended or approved by United States or any agency--

(c) No prohibition from truthfully stating that he or a security

is registered under this or other Federal Acts..

(d) Use of name declared by order of Commission to be misleading

prohibited; Commission may seek injunction...

38. Injunctions Against Gross Abuse---

37. Larceny and Embezzlement.

88. Rules, Regulations, and Orders; General Powers of Commission.

(a) Promulgation of rules and regulations..

(b) Commission may authorize incorporation by reference of

certain documents and reports..

(o) Compliance in good faith with rules and regulations as a bar to

liability--

89. Rules and Regulations; Procedure for Issuance.

40. Orders; Procedure for Issuance..

(a) Notice and opportunity for hearing --

(b) Verification of application and admissibility in evidence-

Admission of interested parties in proceeding before Commis-

sion.

41. Hearings by Commission..

42. Enforcement of Title.

(a) Investigations.

(b) Power to administer oaths, subpena witnesses, compel attend-

ance, take evidence, and require production of records...

(c) Commission may invoke aid of courts of the United States.

(d) Privilege against self-incrimination..

(e) Injunctions; criminal proceedings--

43. Court Review of Orders...

(a) Petitions for review; additional evidence; review by Supreme

Court of the United States..

(b) Stay of Commission's order.

44. Jurisdiction of Offenses and Suits

45. Information Filed With Commission..

(a) Available to public; application for nondisclosure; restriction

against disclosure or personal use by Commission or its em-

ployees.

(b) Availability to public of photostatic copies.

46. Annual Reports of Commission; Employees of the Commission...

47. Validity of Contracts..

(a) Waiver of compliance with Act or rules and regulations void.

(b) Contracts made in violation of Act or rules and regulations

thereunder void...

48. Liability of Controlling Persons; Preventing Compliance With Title..

49. Penalties.

$0. Effect on Existing Law.

61. Separability of Provisions.

62. Short Title...

58. Effeotive Date...

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Beotion

202. Definitions—Continued

(a) Definitions of specific terms—Continued

(9) Exchange

(10) Interstate Commerce..

(11) Investment adviser..

(12) Investment company-

(13) Investment supervisory services ---

(14) Means or instrumentality of interstate commerce.

(15) National securities exchange--

(16) Person.

(17) Security

(18) State

(19) Underwriter...

(20) Acts to which reference is made in this title.

(b) Provisions to be deemed inapplicable to Federal or State

instrumentalities unless specific reference is made.--

203. Registration of Investment Advisers..

(a) Unregistered investment advisers prohibited from using mails

or any means or instrumentality of interstate commerce for

such business.---

(b) Exemptions from subsection (a)-

(c) Application for registration; effective date; amendments.

(d) Denial, suspension, or revocation --

(e) Proceeding to deny registration: postponement of effective date.

(f) Registration of business successor..

Withdrawal; cancelation..

204. Annual and Other Reports ...

205. Investment Advisory Contracts---

206. Prohibited Transactions by Registered Investment Advisers..

207. Material Misstatements..

208. Unlawful Representations:

(a) Unlawful to represent sponsorship, recommendation or ap-

proval by United States or any agency ---

(b) Statements which may be made regarding registration under

Act or Securities Exchange Act---

(c) Restrictions as to use of title “investment counsel".

209. Enforcement of Title..

(a) Investigations..

(b) Power to administer oaths, subpena witnesses, take evidence,

and require production of records---

Commission may invoke aid of courts of the United States..

(d) Privilege against self-incrimination..

Injunctions; criminal proceedings---

210. Publicity:

(a) Availability of information to public; application for nondis-

closure

(b) Investigations.-

Disclosure of information regarding identity, investments, or

affairs of clients by investment adviser not to be required

except under certain conditions.

211. Rules, Regulations, and Orders.

(a) Authority to make, issue, amend, and rescind rules, regulations,

or orders.---

Effective date of rules and regulations.

Notice and opportunity for hearing-

Compliance with rules and regulations in good faith as a bar

to liability-

812. Hearings---

818. Court Review of Orders:

(a) Petitions; additional evidence; review by Supreme Court of

United States...

(b) Proceedings under subsection (a) as a stay of Commission's

order.

914. Jurisdlotion of Offenses and Suits..

270

270

securities, contracts, or anything else of value, paid, to be set aside, disposed of, or understandings with or for the benefit of any other persons in which any underwriter is interested, made, in connection with the sale of such security. A commission paid or to be paid in connection with the sale of such security by a person in which the issuer has an interest or which is controlled or directed by, or under common control with, the issuer shall be deemed to have been paid by the issuer. Where any such commission is paid the amount of such commission paid to each underwriter shall be stated;

(18) the amount or estimated amounts, itemized in reasonable detail, of expenses, other than commissions specified in paragraph (17), of this schedule, incurred or borne by or for the account of the issuer in connection with the sale of the security to be offered or properly chargeable thereto, including legal, engineering, certification, authentication, and other charges;

(19) the net proceeds derived from any security sold by the issuer during the two years preceding the filing of the registration statement, the price at which such security was offered to the public, and the names of the principal underwriters of such security;

(20) any amount paid within two years preceding the filing of the registration statement or intended to be paid to any promoter and the consideration for any such payment;

(21) the names and addresses of the vendors and the purchase price of any property, or good will, acquired or to be acquired, not in the ordinary course of business, which is to be defrayed in whole or in part from the proceeds of the security to be offered, the amount of any commission payable to any person in connection with such acquisition, and the name or names of such person or persons, together with any expense incurred or to be incurred in connection with such acquisition, including the cost of borrowing money to finance such acquisition;

(22) full particulars of the nature and extent of the interest, if any, of every director, principal executive officer, and of every stockholder holding more than 10 per centum of any class of stock or more than 10 per centum in the aggregate of the stock of the issuer, in any property acquired, not in the ordinary course of business of the issuer, within two years preceding the filing of the registration statement or proposed to be acquired at such date;

(23) the names and addresses of counsel who have passed on the legality of the issue;

(24) dates of and parties to, and the general effect concisely stated of every material contract made, not in the ordinary course of business, which contract is to be executed in whole or in part at or after the filing of the registration statement or which contract has been made not more than two years before such filing. Any management contract or contract providing for special bonuses or profit-sharing arrangements, and every material patent or contract for a material patent right, and every contract by or with a public utility company or an affiliate thereof, providing for the giving or receiving of technical or financial advice or service (if such contract may involve a charge to any party thereto at a rate in excess of $2,500 per year in cash or securities or anything else of value), shall be deemed a material contract;

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