Page:United States Statutes at Large Volume 49 Part 1.djvu/859

 814 74rn CONGRES S. SESS. I. CH. 687 . AUGUST 26, 1935. - t ration; application fr (d) Whenev er the Commission, upo n application, finds that a registered holding company has ceased to be a holding company, it shall so declare by order and upon the taking effect of such order the r egistra tion of such co mpany sh all, up on such terms a nd condi - tions as the Commission finds and in such order prescribes as neces- sary for the protection of investors, cease to be in effect. The denial of any such application by the Commission shall be by order. Denial. Security transactio ns by registered holding and su bsidiary com- panies. SEC. 6. (a) Except in accordance with a declaration effective under section 7 and with the order under such section permitting such declaration to become effective, it shall be unlawful for any regis- tered holding company or subsidiary company thereof, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, directly or indirectly (1) to issue or sell any security of such company ; or (2) to exercise any privilege or right to alter the priorities, preferences, voting power, or other rights of the hol ders of an outs tanding securit y of suc h compa ny. (b) The provisions of subsection (a) shall not apply to the issue, ren ewal, or guaran ty by a registe red hold ing com pany or subsidi ary company thereof of a note or draft (including the pledge of any Conditions . security as collateral therefor) if such note or draft (1) is not part of a public offering, (2) matures or is renewed for not more than nine months, exclusive of days of grace, after the date of such issue, renewal, or guaranty thereof, and (3) aggregates (together with all other then outstanding notes and drafts of a maturity of nine months or less, exclusive of days of grace, as to which such company is primarily or secondarily liable) not more than 5 per centum of t he princ ipal am ount and par va lue of t he othe r securi ties of such company then outstanding, or such greater per centum thereof as the Commission upon application may by order authorize as n ecessary or app ropriate in the public interes t or for the pr otec- tion of investors or consumers. In the case of securities having no principa l amoun t or no par val ue, the value f or the purposes of this subsection shall be the fair market value as of the date of issue. The Commission by rules and regulations or order, subject to such terms and conditions as it deems appropriate in the public interest or for the protect ion of i nvestor s or con sumers, shall exempt f rom the provisions of subsection (a) the issue or sale of any security by any subsidiary company of a registered holding company, if the issue and sale of such security are solely for the purpose of financing the business of such subsidiary company and have been expressly authoriz ed by the State commis sion of the State in w hich such subsidiary company is organized and doing business, or if the issue and sale of such security are solely for the purpose of financing the business of such subsidiary company when such subsidiary com- pany is not a holding company, a public-utility company, an invest- ment company, or a fiscal or financing agency of a holding company, a public utility company, or an investment company. The provi- sions of subsection (a) shall not apply to the issue, by a registered holding company or subsidiary company thereof, of a security issued pursuant to the terms of any security outstanding on Jan- uary 1, 1935, giving the holder of such outstanding security the right to convert such outstanding security into another security of the same issuer or of another person, or giving the right to subscribe to another security of the same issuer or another issuer. Within ten days after any issue, sale, renewal, or guaranty exempted from the Unlawful acts. Post, p. 815. Renewal of notes or drafts. Securities having no principal amount or no par value. Se curi ties issu ed an d sold to finance business; exemption, rules. Au thoriza tion re - quired. Se curitie s issue d under terms of security outstanding on Janu- ary 1, 1935 . Issuance of exempt securities; notification. UNL AW FUL SECURITY TRANSACTIONS BY RE GI STE RED HOLDING AND SUBSIDIARY COMPANIES