occupational disability annuities or supplemental annuities are provided for longer term or career employees.

A spouse's annuity is provided, under certain conditions, for the wife or husband of an employee annuitant.

Survivor annuities are awarded to the qualified spouses, children, and parents of deceased career employees. Various lump-sum benefits are also provided under certain conditions.

The Railroad Retirement Act provides for extensive coordination with the Social Security Act in the computation, payment, and financing of railroad retirement annuities. Annuitants and members of their families also awarded social security benefits after 1974 receive the payment of such benefits through the Board. However, the responsibility for the adjudication of such benefits remains with the Social Security Administration.

Under the Health Insurance for the Aged Act, qualified railroad retirement beneficiaries are entitled to have payments made on their behalf for covered hospital, posthospital, and medical services.

Benefits are provided under the Railroad Unemployment Insurance Act to individuals who are unemployed in a benefit year, but who are ready and willing to work, and to individuals who are unable to work because of sickness or injury, based on qualifying railroad earnings in a preceding one-year period. The Board maintains, through its field offices, a placement service for unemployed railroad personnel.

Phone, 202-272-3100

Chairman Commissioners

DAVID S. RUDER

CHARLES C. Cox

JOSEPH A. GRUNDFEST

EDWARD H. FLEISCHMAN

The Securities and Exchange Commission was created under authority of the Securities Exchange Act of 1934 (15 U.S.C. 78a-78jj) and was organized on July 2, 1934. The Commission serves as adviser to United States district courts in connection with reorganization proceedings for debtor corporations in which there is a substantial public interest. The Commission also has certain responsibilities under section 15 of the Bretton Woods Agreements Act of 1945 (22 U.S.C. 286k-1) and section 851(e) of the Internal Revenue Code of 1954 (26 U.S.C. 851(e)).

The Commission is vested with quasijudicial functions. Persons aggrieved by its decisions in the exercise of those

functions have a right of review by the United States Courts of Appeals.

Activities

Full and Fair Disclosure The Securities Act of 1933 (15 U.S.C. 77a) requires issuers of securities making public offerings of securities in interstate commerce or through the mails, directly or by others on their behalf, to file with the Commission registration statements containing financial and other pertinent data about the issuer and the securities being offered. A similar requirement applies to such offerings on behalf of a controlling person of the issuer. Unless a registration statement is in effect with respect to such securities, it is unlawful

to sell the securities in interstate commerce or through the mails. (There are certain limited exemptions, such as Government securities, nonpublic offerings, and intrastate offerings, as well as offerings not exceeding $1,500,000 that comply with the Commission's Regulation A.) The effectiveness of a registration statement may be refused or suspended after a public hearing if the statement contains material misstatements or omissions, thus barring sale of the securities until it is appropriately amended.

Registration of securities does not imply approval of the issue by the Commission or that the Commission has found the registration disclosures to be accurate. It does not insure investors against loss in their purchase, but serves rather to provide information upon which investors may make an informed and realistic evaluation of the worth of the securities.

Persons responsible for filing false information with the Commission subject themselves to the risk of fine or imprisonment or both, and persons connected with the public offering may be liable in damages to purchasers of the securities if the disclosures in the registration statement and prospectus are materially defective. Also, the above act contains antifraud provisions that apply generally to the sale of securities, whether or not registered (15 U.S.C. 77a et seq.).

Regulation of Securities Markets The Securities Exchange Act of 1934 assigns to the Commission broad regulatory responsibilities over the securities markets, the self-regulatory organizations within the securities industry, and persons conducting a business in securities. Persons who execute transactions in securities generally are required to register with the Commission as broker-dealers. The Commission is directed to facilitate the establishment of a national market system for securities and a national system for the clearance and settlement of securities transactions. Securities exchanges and certain clearing agencies are required to register with the Commission, and associations of brokers

or dealers are permitted to register with the Commission. The act also provides for the establishment of the Municipal Securities Rulemaking Board to formulate rules for the municipal securities industry. The Commission oversees the selfregulatory activities of the national securities exchanges and associations, registered clearing agencies, and the Municipal Securities Rulemaking Board. In addition, the Commission regulates industry professionals, such as securities brokers and dealers, certain municipal securities professionals, government securities brokers and dealers, and transfer agents.

The act authorizes national securities exchanges, national securities associations, clearing agencies, and the Municipal Securities Rulemaking Board to adopt rules that are designed, among other things, to promote just and equitable principles of trade and to protect investors. The Commission is required to approve or disapprove most proposed rules of these self-regulatory organizations and has the power to abrogate or amend existing rules of the national securities exchanges, national securities associations, and the Municipal Securities Rulemaking Board.

In addition, the Commission has broad rulemaking authority over the activities of brokers, dealers, municipal securities dealers, securities information processors, and transfer agents. The Commission may regulate such securities trading practices as short sales and stabilizing transactions. It may regulate the trading of options on national securities exchanges and the activities of members of exchanges who trade on the trading floors. The Commission may adopt rules governing broker-dealer sales practices in dealing with investors. The Commission also is authorized to adopt rules concerning the financial responsibility of brokers and dealers and reports made by them.

The Securities Exchange Act also empowers the Board of Governors of the Federal Reserve System to prescribe rules relating to the extension of credit by brokers and dealers for securities transactions. Such rules include the