syndicate, selling group and salesmen, paid or to be paid by the underwriter or underwriters, directly or indirectly, in connection therewith; and a statement by the underwriters that they know of none to be paid in connection therewith by the foreign borrowing government, excepting only such as may be expressly stated in the statement.

(6) Budgetary receipts and disbursements of the borrowing government or subdivision thereof for the latest available fiscal period and for the two immediately preceding fiscal periods, and a statement of its funded debt, both external and internal, as furnished by the chief financial officer thereof.

(7) Whether or not the borrower has, within a period of ten years prior to the filing of said statement, defaulted on the principal or interest when due of any other security publicly sold in the United States or other foreign country, and if so, the date, amount and circumstances of said default;

(c) At the time of filing said statement, as hereinbefore prescribed in subsections (a) and (b) of this section, the applicant shall pay to the Commission a fee of one one-hundredth of 1 per centum of the aggregate price at which such securities are to be offered to the public, but in no case shall such fee be less than $50.

(d) The filing with the Commission of a registration statement and the payment to the Commission of the required fee shall constitute formal registration of the issue of security concerned. Such filing and payment may be effected by forwarding the registration statement, accompanied by a United States postal money order, or a certified bank check, for the required fee, by registered mail, postage prepaid, properly addressed to the Commission at Washington, District of Columbia.

LIABILITY OF DIRECTORS AND OTHERS

SEC. 6. That every person purchasing any security, a part of an issue of securities so registered, within six months after the original public offering of such securities for sale to the public, shall be presumed to have relied upon the representations set forth in the registration statement with respect thereto, unless the contary is proved, and, in case such registration statement shall be untrue in any material respect, any person shall have the right within one year after the original public offering of such securities for sale to the public to obtain damages for any and all losses sustained by him as a direct consequence of such untrue statements, from any one or more of the signers of such registration statement.

No signer of a registration statement, however, shall be held liable for damages under the provisions of this section on account of any statement contained therein. if it is proved that:

(a) As regards any untrue statement purporting to be a statement by a public or chartered accountant, engineer, appraiser, lawyer, or other expert, or contained in what purports to be a copy of or extract from a report, valuation, or opinion of any expert, which fairly represents the statement, or was a correct and fair copy of or extract from such report, valuation, or opinion, and that such person had reasonable grounds to believe that the person making such statement, report, valuation, or opinion was competent to make it, and that it was obtained and accepted in good faith; or

(b) As regards any untrue statement contained in a public official document, such statement was so contained in such document, and was accepted in good faith by such person; or

(c) As regards any untrue statement not purporting to be made on authority of an expert or a public official document, such person had reasonable grounds to believe, and did, up to the time of the purchase of the securities with respect to which such damages are claimed by the person claiming such damages, believe that the statement was true; or

(d) Upon becoming aware of any untrue statement contained in such registration statement such person had, prior to the purchase by the person claiming such damages of the securities with respect to which such damages are claimed, notified the Commission of such error and given such reasonable public notice, if any, with respect thereto as shall be directed by the Commission.

No signer of a registration statement shall be held liable for damages under the provisions of this section on account of any failure to disclose any information in any registration statement if:

(a) He proves that he in good faith exercised due diligence and was not cognizant of the matter not disclosed; or

(b) He proves that the failure to disclose such matter arose from an honest mistake of fact on his part; or

(c) The matter not disclosed was in respect of a matter which in the opinion of the court dealing with the case was immaterial or was otherwise such as ought, in the opinion of that court, having due regard to all the circumstances of the case, reasonably to be excused.

Any condition, stipulation, or provision, binding any person acquiring any securities required by this Act to be registered to waive compliance with any of the provisions of this Act shall be void. The rights and remedies herein provided for shall be in addition to any other rights and remedies that may exist at law or in equity.

Any person who becomes liable to make any payment under this section may recover contribution as in cases of contract from any person who, if sued separately, would have been liable to make the same payment, unless the person who has become so liable was, and the other person was not, guilty of fraudulent misrepresentation.

CIRCULARS

SEC. 7. That it shall be unlawful to carry or transmit, or cause to be carried or transmitted, in interstate commerce, any circular or other written, printed, or other graphic communication or document announcing, offering, or advertising the original issuance and distribution to the public of any securities required by the provisions of this act to be registered, unless such circular or other written, printed, or other graphic communication contains the following information concerning the security so offered:

Copies of all such circulars shall within five days after distribution thereof be filed with the Commission, together with a reference to the registration of the securities so offered.

Any sale of a security registered under this act not made in connection with an original offering or original distribution of such security to the public shall be exempt from the provisions of this section.

(a) Name of the issuer and of the underwriter, if any, offering the same directly or indirectly to the public; amount of capitalization of the issuer authorized and paid up; location of the principal office of the issuer and, if incorporated, the place of incorporation.

(b) A brief description of the security offered, the amount of the issue, its rights with reference to dividends or fixed returns, and voting power and relative position with reference to other outstanding securities having prior rights.

(c) The price at which the security is offered to the public, a brief statement of the purpose of the offering, and the price paid to the issuer.

(d) The names of the principal executive officers, directors, trustees, or general partners of the issuer.

(e) A summary statement showing the issuer's assets and liabilities as of the date of the balance sheet filed with the registration statement; and the earnings of the issuer during each of three consecutive periods, each of twelve calendar months covered by the profit and loss statement filed with the registration statement.

(f) A statement to the effect that additional information is on file and may be secured from the Commission at Washington, District of Columbia: Provided, That any such circular announcing, offering, or advertising for original sale to the public any securities of a foreign government or political subdivision thereof shall contain such information as the Commission may specify.

INFORMATION AVAILABLE TO PUBLIC

SEC. 8. That the information contained in registration statements and circulars filed with the Commission under the provisions of this act shall be made available to the public under such regulations as the Commission may prescribe.

EXEMPT SECURITIES

SEC. 9. That, except as hereinafter otherwise expressly provided, the provisions of this act shall not apply to any of the following classes of securities:

(a) Any security issued or guaranteed by the United States or any Territory or insular possession thereof, or by the District of Columbia, or by any State of the United States or political subdivision, or by any instrumentality or agency of any of the foregoing.

(b) Any security issued by and repesenting an interest in or a direct obligation of any common carrier or other public utility subject to regulation or supervision as to the issue of its securities, by a commission, board, or officer of the Govern

ment of the United States, or of any State, Territory or insular possession thereof, or of the District of Columbia; or any such security issued by any National or State bank, or trust company or insurance company; or by any corporation created and controlled by and acting as an instrumentality of the Government of the United States pursuant to authority granted by the Congress of the United States.

(c) Any security issued by a corporation organized exclusively for religious, educational, benevolent, fraternal, charitable, or reformatory purposes and not for pecuniary profit, and no part of the net earnings of which inures to the benefit of any person.

(d) Bonds or notes secured by mortgage upon real estate, improved or about to be improved by a residential or agricultural structure, when the total encumbrances against any single property so mortgaged, including the mortgage securing the bonds or notes exempted by this paragraph do not exceed $25,000. (e) Negotiable promissory notes or commercial paper maturing within twelve months of the date of issue.

(f) Securities issued by any building and loan association under the supervision of a public commission, board or officer of any State, Territory or insular possession of the United States or of the District of Columbia.

EXEMPT TRANSACTIONS

SEC. 10. That, except as hereinafter otherwise expressly provided, the provisions of this Act shall not apply to any of the following transactions:

(a) Any and all communications, negotiations, and contracts between the issuer and the underwriter or underwriters and relating to the formation of purchasing, underwriting or distributing syndicates, with respect to securities proposed to be offered to the public.

(b) Judicial, executor's, administrator's, guardian's or conservator's sale, or any sale by a receiver or trustee in insolvency or bankruptcy.

(c) Sales by or for the account of a pledgee or holder of a mortgage, selling or offering for sale or delivery in the ordinary course of business and not for the purpose of avoiding the provisions of this Act, to liquidate a bona fide debt, a security pledged in good faith as collateral for such debt.

(d) Transactions in which any security is sold, offered for sale, subscription or delivery by the owner or owners thereof, or by his or their representative, for the owners' account, such sale or offer for sale, subscription or delivery not being made in connection with an offering or distribution of such security to the public.

(e) The distribution by a corporation, actively engaged in the business authorized by its charter, of securities to its stockholders or other security holders, or assigns, exclusively, as a stock dividend or other distribution out of earnings or surplus; or the issuance of additional capital stock of a corporation sold or distributed by it exclusively among its own stockholders or assigns, where no commission or other remuneration is paid or given directly or indirectly in connection with the sale or distribution of such increased capital stock; or the distribution of securities issued under a bona fide reorganization or recapitalization by a corporation or corporations party thereto, or formed pursuant thereto or in connection therewith, entirely to its or their security holders or existing creditors or assigns, made in good faith and not for the purpose of avoiding the provisions of this act, either in exchange for the securities of such security holders or claims of such creditors or partly for cash and partly in exchange for the securities or claims of such security holders or creditors.

(f) Bonds or notes secured by mortgage upon real estate or tangible personal property where the entire mortgage together with all of the bonds and notes secured thereby in the original transaction are sold to not more than five purchasers, and not intended to be offered directly or indirectly to the public.

(g) The issue or delivery of any security in exchange for any other security pursuant to a right of conversion, or the issue and delivery of a security upon the exercise of a warrant or the surrender of a certificate of deposit or receipt, or pursuant to a subscription for such security entitling the holder of the security surrendered to receive in exchange, to receive the security issued or delivered; or the issuance of any certificate of deposit or receipt against the deposit or delivery of the security represented thereby, or any similar transaction.

(h) Subscription for shares of the capital stock of a corporation prior to the incorporation thereof under the laws of any State, when no commission, compen

sation, or remuneration is paid or required for or in connection with the subscription.

PROHIBITION OF REPRESENTATION OF APPROVAL BY COMMISSION

SEC. 11. That it shall be unlawful to represent or cause to be represented to any prospective purchaser, either orally or in any written or printed communication, circular, advertisement, or other literature, that registration of securities with the Commission constitutes or is evidence of the Commission's approval or recommendation of such securities.

FRAUDULENT PRACTICES PROHIBITED

SEC. 12. (a) That it shall be unlawful for any person in any interstate sale, promotion, negotiation, advertisement, or distribution of any security or securities, whether or not registered, willfully to employ any device, scheme, or artifice to defraud or to obtain money or property by means of any false pretense, representation or promise, or to engage in any transaction, practice or course of business, relating to the interstate purchase or sale of any securities, which operates or would operate as a fraud upon the purchaser.

ACTION BY COMMISSION

(b) Whenever it shall appear to the Commission, either upon complaint or otherwise, that the provisions of this section (12) have been or are about to be violated, the Commission may, in its discretion, either require or permit such person to file with it a statement in writing, under oath or otherwise, as to all the facts and circumstances concerning the subject matter which it believes to be in the public interest to investigate, and may, with or without such requisition, permit or statement, investigate such facts.

(c) Whenever it shall appear to the Commission that the practices investigated constitute a fraud or an attempt to defraud under the provisions of this section 12 with respect to the statement required to be filed or the connection with the issue, sale, or offer to sell of any security or otherwise, it shall promptly investigate the facts and transmit such evidence as may be available concerning the transaction or facts complained of to the Attorney General, who may in his discretion bring an action either in the district court of the United States, for the district wherein the transmittal of the offer, announcement, advertising, or other communication complained of begins or in the district wherein such offer, announcement, advertising, or other communication is received, to enjoin the continuance of such practices or transactions, or institute any appropriate criminal proceeding, or both. The Commission also may, in its discretion, present the facts with regard to any fraudulent practices to the Attorney General or the proper law enforcement officer of any State or Territory, or the District of Columbia. exemptions contained in sections 9 and 10 of this act shall not apply to the provisions of this section 12.

The

For the purpose of all investigations which, in the opinion of the Commission are necessary and proper for the enforcement of this section, the Commission and officer or officers designated by it are empowered to subpena witnesses, examine them under oath, and require the production of any books, papers, or other documents which the Commission deems relevant or material to the inquiry.

POWER TO MAKE RULES AND REGULATIONS

SEC. 14. (a) That the Commission shall have authority from time to time to make, amend, and rescind rules and regulations for the proper carrying out of this act. It shall have authority to prescribe forms upon which all statements to be filed as herein before provided shall be made. Such rules and regulations shall be effective upon publication in the manner which the Commission shall prescribe.

JURISDICTION OF COURTS

SEC. 15. That the district courts of the United States, the district courts of Alaska, Hawaii, Puerto Rico, Philippine Islands, Panama Canal Zone, and the Virgin Islands, and the Supreme Court of the District of Columbia, shall have have jurisdiction of offenses and violations under this Act, and of all suits in equity and actions at law brought under this Act. Judgments and decrees so

rendered shall be subject to review in like manner as provided in sections 128 and 240 of the Judicial Code, as amended.

Any of the said courts herein before named in this section, within the jurisdiction of which an investigation or inquiry of the Commission is carried on, may, in case of contumacy or refusal to obey a subpena issued to any person, issue an order requiring such person to appear before the Commission, or to produce documentary evidence if so ordered, or to give evidence touching the matter in question; and any failure to obey such order of the court may be punished by such court as a contempt thereof.

PENALTIES

SEC. 16. That whoever shall willfully violate any of the provisions of this Act, shall, upon conviction, be fined not more than $5,000 or imprisoned not more than five years, or both; and any officer, director, or agent of any corporation who knowingly participates in any such violation shall be punished by a like fine or imprisonment, or both.

AUTHORITY FOR APPROPRIATION

SEC. 17. That the necessary appropriations for the purpose of carrying out the provisions of this Act are hereby authorized. All monies derived from the fees imposed by the provisions of this Act shall be paid into the Treasury to the credit of miscellaneous receipts.

VALIDITY OF PORTIONS OF ACT

SEC. 18. That if any provision of this Act, or the application of such provisions to any person or circumstance, shall be held invalid, the remainder of this Act, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.

EFFECTIVE DATE

SEC. 19. That this Act shall take effect ninety days after its approval. 169692-33-23