1. Investment in securities. The aggregate cost and the aggregate value of investments included under this subparagraph and subparagraph (2) of this paragraph shall be shown in the statement of condition parenthetically or otherwise. The method used in determining the "cost" shall be stated. For the purpose of this section, "value" has the meaning defined in section 2(a) (39) (B) of the Investment Company Act of 1940 (54 Stat. 796; 15 U.S.C. 80a-2). State in the statement of condition for each caption the basis of determining the amount at which investments are carried.

(a) Securities of investment companies. State separately (1) trust shares in trusts created or serviced by the depositor or sponsor of this trust; (2) trust shares in other trusts; and (3) securities of other investment companies.

(b) Securities of other companies. State separately (1) marketable securities and (2) other securities.

2. Investments other than securities. State separately each major class. See instructions to caption 1.

3. Dividends and interest receivable.
4. Cash.

5. Other property. State separately each significant item. State the basis of determining the amounts.

LIABILITIES, TRUST SHARES AND DISTRIBUTABLE FUNDS

6. Liabilities. State separately amounts payable to (a) trustee and custodian; and (b) depositor, sponsor, and their associates. State separately any other significant items. 7. Reserves not shown elsewhere. State separately each significant item. If the caption used for each reserve stated separately is not clearly indicative of the purpose for

which the reserve was created, explain the purpose in a note referred to under this caption.

8. Trust shares. State for each class of trust shares (a) the title of issue, the number of trust shares outstanding and the total cost to the investors of such trust shares; (b) the adjustment for market depreciation or appreciation; (c) other deductions from the total cost to the investors for fees, loads and other charges; and (d) the net amount applicable to the investors. Explain in a note referred to under this caption the deductions for fees, loads, and other charges from the total cost to the investors.

1. Distributions and dividends. State separately (a) distributions received on shares of investment trusts, and (b) dividends on other securities. Exclude any distribution or portion thereof received on shares of investment trusts which is known to represent the return of any amount invested in the shares upon which such distribution was paid. Also indicate the basis upon which dividends and distributions are taken into income (e.g., "cash" or "accrual"; and if accrual whether as of declaration or record date); and, as to any distributions and dividends other than cash, the basis on which they have been taken up as income.

2. Interest. State separately interest from (a) securities and (b) other sources.

3. Other income. State separately by class of income each significant amount. 4. Total income.

5. Taxes.

EXPENSES

6. Fees of the trustee and custodian. 7. Fees of the depositor and sponsor. 8. Legal fees and expenses. State separately each significant amount.

9. Auditing fees and expenses. State separately each significant amount.

10. Other expenses. State separately by class of expense each significant amount. 11. Total expenses.

12. Balance of income before gain or loss realized from security transactions. See caption 13 below.

13. Gain or loss realized from security transactions. State separately the net of

gains and losses arising from transactions in (a) trust shares of trusts created or serviced by the depositor or sponsor of this trust; (b) trust shares in other trusts; and (c) other investments in securities. State here or in a note herein referred to the principle followed in determining the cost of securities sold, e.g., "average cost" or "first-in, firstout." This caption, and caption 12 above, may be omitted by unit investment trusts provided the information herein required is contained in Schedule III of § 210.6–13 (Rule 6-13), and provided there be given in a footnote in the financial statements (a) the aggregate amount received from sale of securities; (b) the aggregate cost of the securities sold; (c) the realized gain or loss thereon; and (d) the principle followed in determining the cost of securities sold, e.g., "average cost" or "first-in, first-out."

14. Net income for the period. If captions 12 and 13 are omitted by unit investment trusts, this caption shall be changed to Net income for the period excluding gain or loss realized from security transactions.

15. Balance of income and distributable funds applicable to trust shares at the beginning of the period.

16. Additions to distributable funds. State separately (a) that portion from the sale of trust shares which represents payments for participation in the balance of income and distributable funds; and (b) any other significant amounts.

17. Deductions other than distributions. State separately (a) amounts withheld (1) for reserves and (2) for investments, and (b) any other significant amounts.

18. Distributions to shareholders. For each class of trust shares state the amount per share and in the aggregate. State, as to any distributions other than cash, the nature of the distributions and the basis of determining the amount charged to income and distributable funds. Indicate here or in a note herein referred to the aggregate distributions made upon the surrender and cancellation of trust shares which represent income and distributable funds applicable thereto at the date of surrender and cancellation.

19. Balance of income and distributable funds applicable to trust shares at close of the period.

[7 F.R. 3219, May 1, 1942]

the statement of income and distributable funds.

Schedule I-Investment in securities. The schedule prescribed by § 210.12-33 (Rule 12-33) shall be filed in support of caption 1 of each statement of condition and of captions 1 and 2 of each statement of income and distributable funds.

Schedule II-Trust shares. The schedule prescribed by § 210.12-34 (Rule 1234) shall be filed in support of caption 8 of each statement of condition.

Schedule III-Gain or loss from transactions in trust property. A schedule shall be submitted showing for each investment set forth in Schedule I in which there were any sales or redemptions during the period: (a) the aggregate amount received from sale; (b) the aggregate cost of the investment sold; and (c) the realized gain or loss thereon.

Schedule IV—Allocation of trust assets to series of trust shares. If the trust assets are specifically allocated to different series of trust shares, and if such allocation is not shown in the statement of condition in columnar form or by the submission of separate statements for each series of trust shares, a schedule shall be submitted showing the amount of trust assets, indicated by each statement of condition filed, which is applicable to each series of trust shares.

Schedule V-Allocation of trust income and distributable funds to series of trust shares. If the trust income and distributable funds are specifically allocated to different series of trust shares and if such allocation is not shown in the statement of income and distributable funds in columnar form or by the submission of separate statements for each series of trust shares, a schedule shall be submitted showing the amount of income and distributable funds, indicated by each statement of income and distributable funds filed, which is applicable to each series of trust shares. [7 F.R. 3219, May 1, 1942]

FACE-AMOUNT CERTIFICATE INVESTMENT COMPANIES

SOURCE: $ 210.6-20 to 210.6-24 appear at 16 F.R. 345, Jan. 13, 1951.

§ 210.6-20 Application of §§ 210.6-20 to 210.6-24.

Sections 210.6-20 to 210.6-24 shall be applicable to financial statements filed by investment companies which are issuers of face-amount certificates.

§ 210.6-21

Special rules applicable to face-amount certificate investment companies.

The financial statements filed by persons to which this section is applicable shall be prepared in accordance with the following special rules in addition to the general rules in §§ 210.1-01 to 210.4-14. Where the requirements of a special rule differ from those prescribed in a general rule, the requirements of the special rule shall be met.

(a) Content of financial statements. The financial statements shall be prepared in accordance with the requirements of this part notwithstanding any provision of the articles of incorporation, trust indenture or other governing legal instruments specifying certain accounting procedures inconsistent with those required in this part.

(b) Certification. Where, under the applicable form, financial statements are required to be certified, the certifying accountant shall have been selected and ratified in accordance with section 32 of the Investment Company Act of 1940 and the applicable rules thereunder.

(c) Consolidated and combined statements. (1) Consolidated and combined statements filed for face-amount certificate investment companies shall be prepared in accordance with §§ 210.4-01 to 210.4-14 except that statments of the registrant which is a face-amount certificate investment company and engages in no business of a material amount other than issuing or servicing of face-amount certificates, may be consolidated only with the statements of subsidiaries which are also face-amount certificate investment companies: Provided, however, That (i) the subsidiaries are totally held, except as to outstanding faceamount certificates, by the parent, (ii) each face-amount certificate investment company maintains certificate reserves and qualified assets as provided by section 28 of the Investment Company Act of 1940, and (iii) separate financial statements for each company are filed.

(2) Any face-amount certificate investment company may, however, file a consolidating statement which may include totally held subsidiary companies, except face-amount certificate investment companies, the inclusion of which in consolidation is prohibited by the provisions set forth in subparagraph (1) of this paragraph. Such consolidating

statement shall set forth the individual statement of the parent company and each other company or groups of similar other companies.

(d) Affiliates. The term "affiliate" means an "affiliated person” as defined in section 2 (a) (3) of the Investment Company Act of 1940. The term "control" has the meaning given in section 2 (a) (9) of that act.

(e) Qualified assets. (1) For companies issuing face-amount certificates subsequent to December 31, 1940 under the provisions of section 28 of the Investment Company Act of 1940, the term "qualified assets" means qualified investments as that term is defined in section 28 (b) of the act. A statement to that effect shall be made in the balance sheet.

(2) For other companies the term "qualified assets" means cash and investments which such companies do maintain or are required, by applicable governing legal instruments, to maintain in respect of outstanding face-amount certificates. State in a note to the balance sheet the nature of the investments and other assets so maintained or required to be maintained by such legal instruments. If the nature of the qualified assets and amount thereof are not subject to the provisions of section 28 of the Investment Company Act of 1940, a statement to that effect shall be made.

(3) Loans to security holders may be included as a qualified asset in an amount not in excess of certificate reserves carried on the books of account in respect of each individual certificate upon which the loans were made.

(f) Valuation of qualified assets. (1) The balance sheet shall reflect all qualified assets at cost or amortized cost, whichever is appropriate. Such basis shall be explained in a note which should also state the policy followed in writing off or amortizing any premium included in the cost of interest-bearing obligations. State, also, in an appropriate manner the amount of each kind of investments acquired from controlled companies and other affiliates, if material, during the period covered by the profit and loss or income statement, and the method used in determining the cost of any such investments.

(2) Market value of securities shall be stated parenthetically.

(3) Due consideration shall be given to evidence of probable loss and, where

evidence indicates an apparently permanent decline in underlying value and earning power, recognition thereof shall be made by means of an appropriate write-down or the establishment of an appropriate reserve.

(g) Certificate reserves. (1) For companies issuing face-amount certificates subsequent to December 31, 1940 under the provisions of section 28 of the Investment Company Act of 1940, balance sheets shall reflect reserves for outstanding certificates computed in accordance with the provisions of section 28 (a) of the act.

(2) For other companies, balance sheets shall reflect reserves for outstanding certificates determined as follows:

(i) For certificates of the installment type, such amount which, together with the lesser of future payments by certificate holders or such portion thereof as is credited to the account of certificate holders as and when accumulated at a rate not to exceed 32 percent per annum (or such other rate as may be appropriate under the circumstances of a particular case) compounded annually, shall provide the minimum maturity or face amount of the certificate when due.

(ii) For certificates of the fully paid type, such amount which, as and when accumulated at a rate not to exceed 32 percent per annum (or such other rate as may be appropriate under the circumstances of a particular case) compounded annually, shall provide the amount or amounts payable when due.

(iii) Such amount or accrual therefor, as shall have been credited to the account of any certificate holder in the form of any credit, or any dividend, or any interest in addition to the minimum maturity or face amount specified in the certificate, plus any accumulations on any amount so credited or accrued at rates required under the terms of the certificate.

(iv) An amount equal to all advance payments made by certificate holders, plus any accumulations thereon at rates required under the terms of the certificate.

(v) Amounts for other appropriate contingency reserves, for death and disability benefits or for reinstatement rights on any certificate providing for such benefits or rights.

QUALIFIED ASSETS

210.6-21 (e) (1) and (2))

1. Cash and cash items. State separately (a) cash on hand, demand deposits, and time deposits; (b) call loans; and (c) funds subject to withdrawal restrictions.

(a)

2. Dividends and interest receivable. Dividends shall not be included before the ex-dividend date, nor unless payment is reasonably assured by past experience, guaranty, or otherwise. No dividend shall be included on stocks issued or assumed by the company and held by or for it, whether held in its treasury, in sinking or other special funds, or pledged as collateral.

(b) Interest due or accrued on bonds, notes, deposits, loans, open accounts, and other interest-bearing obligations owned, shall not be included unless payment is reasonably assured by past experience, guaranty, or otherwise. No interest shall be included on securities issued or assumed by the company and held by or for it, whether held in its treasury, in sinking or other special funds, or pledged as collateral.

8. Notes receivable.
4. Accounts receivable.

5. Reserves for doubtful receivables. Notes and accounts receivable known to be uncollectible shall be excluded from the assets as well as from any reserve account.

6. Investments in unaffiliated issuers. See 210.6-21 (1).

(a) Securities. State separately investments in (1) United States Government bonds and other obligations (including only direct obligations of the United States Government); (ii) other bonds; and (iii) other securities.

(b) First mortgage loans on real estate. State separately (1) mortgages insured by an agency acting as an instrumentality of the United States Government; (ii) mortgages guaranteed by an agency acting as an instrumentality of the United States Government; and (111) other first mortgages. There shall also be shown in an appropriate man

ner (1) the aggregate amount of self-amortizing mortgages, and (2) the amount of mortgages in respect of which interest or principal payments are past due for more than three months.

(c) Other mortgage loans on real estate. Such classification shall be used as is appropriate under the circumstances.

(d) Reserves for investments in unaffiliated issuers.

(e) There shall be shown in an appropriate manner the average gross rates of return realized by the company, for each period for which profit and loss or income statements are filed, on each class of investment shown in this caption.

7. Real estate owned. State separately (a) real estate acquired through foreclosure of mortgages; and (b) other real estate investments.

8. Reserve for real estate owned.

9. Loans to certificate holders secured by certificate reserves. See § 210.6-21 (e) (8).

10. Other qualified assets. State separately (a) investments in and advances to controlled companies and (b) other affiliates; (c) each special fund of a material amount; (d) unamortized premium on mortgages; and (e) any other material amounts.

11. Total qualified assets. State in a note the amount of qualified assets on deposit classified as to general classes of assets and as to general types of depositaries, such as banks and states, together with a statement as to the purpose of the deposits.

OTHER ASSETS

12. Investments in unaffiliated issuers, not included in total of caption 11. State separately each class of investment.

13. Investments in and advances to affiliates. State separately investments in (a) controlled companies and (b) other affiliates. The basis of determining the amount shall be explained in an appropriate manner.

14. Prepaid expenses and other deferred items. State separately any material items. State in a note to this caption the provisions which have been made to write off or amortize such items.

15. Other assets. State separately (a) amounts due from directors and officers, and (b) any other item in excess of 5 percent of the amount of all assets other than qualified assets.

LIABILITIES, CAPITAL SHARES AND SURPLUS CERTIFICATE RESERVES AND CURRENT LIABILITIES 16. Certificate reserves. State separately reserves for (a) certificates of the installment type; (b) certificates of the fully paid type; (c) advance payments; (d) additional amounts accrued for or credited to the account of certificate holders in the form of any credit, dividend, or interest in addition to the minimum maturity amount specified in the certificate; and (e) other certificate reserves. State in an appropriate manner

the basis used in determining the reserves, including the rates of interest of accumulation.

17. Current liabilities, exclusive of certificate reserve liabilities.

(a) Notes payable. State separately amounts payable within one year (1) to banks and (ii) to others.

(b) Accounts payable. State separately (1) amounts payable for purchase of securities and (11) other accounts payable.

(c) Accrued liabilities. State separately (1) accrued salaries; (ii) tax liability; (111) interest; and (iv) any other material item. If the total under this subcaption is not material, it may be stated as one amount.

(d) Sundry liabilities of a current nature. State separately (1) dividends declared; (11) serial bonds, notes and mortgages installments and mortgages due within one year; (iii) total of current amounts due to affiliates; (iv) total of current amounts due directors and officers; and (v) other items of material amount.

18. Total certificate reserves and current liabilities.

OTHER LIABILITIES

19. Funded debt. If any amount included herein will fall due within one year, indicate such amount and explain in a note the reason for not including such amount as a current liability.

20. Indebtedness to affiliates-Not current. State separately amounts due to (a) controlled companies, and (b) other affiliates.

21. Other long-term debt. Indicate whether secured. State separately (a) total of amounts due directors and officers; and (b) other long-term debt, specifying any material item. State separately by years, in the balance sheet or in a note therein referred to, total amounts of respective maturities for the 5 years following the date of the balance sheet.

22. Other liabilities. State separately any amount in excess of 10 percent of the total of liabilities other than certificate reserves, funded debt, capital shares and surplus.

DEFERRED INCOME

23. Deferred income. State separately each material item and the basis of taking amounts reported under this caption into income.

RESERVES NOT SHOWN ELSEWHERE State 24. Reserves not shown elsewhere. separately each major class and indicate clearly its purpose.

CAPITAL SHARES AND SURPLUS

25. Capital shares. State for each class of shares (a) the title of issue; (b) the number of shares authorized; and (c) the number of shares outstanding and the capital share liability thereof. Show also the dollar amount, if any, of capital shares subscribed but unissued, and of subscriptions receivable thereon.