-y managing agent of an unincorporated broker or clealer or„tered or anniving for registration. Who cecomes a con-resident „fter the effective tate or this rude, shall remish such consent

and nower of attorney witam days thereafter.

Service of aav ocess, leadings or crner rapers on the Comission under this rule shall Le made by delivering the requisite numer of conies thereof to the Secretary of the Commission or to such ther person as the ( ommission may authorize to acts ben Whenever any rocess. Readings or other rapers as aforesaid are Lerted upon the tummission. I shall promptly forward a copy hereof sø vagistered mail to the appropriate defendants at their last address # record : led with the Commission. The Cmmission snail be furished

Sufficient cumpere conies for such purpose, and one copy

1) For purposes or this rule the rowing dennitions shail apply: 1. The term roker nail ave the neaning set out in Section 3 cl for the Securities Exchange Act of 1934, 21e tarm dealer nail lave he meaning set out in SeeSon 3 (a) 5) of the securities Exchange Act of 1934,

The term “managment snail mean any person, inluding a trustee. vnoireets or manages or vro participates In the threeting or managing si ne fairs of any mincorpovated organization or association vich shot a partnership.

The term on-reskient roker or lealer" shall mean CA in the case of an individual. One vro resides in or has his principal place of usiness in any piace not subject to the furisfiction of the Tatted rates: 3) in the case of a corporation, one (ncorporated in or having is principal place of business In my place not subject to the jurisdiction of the United States: Cn the case of a partnership or other mincorporated organization or association. ne having is principal place of business in any place not mbject to the jurisdiction of the United States.

(3) A general partner or managing agent of a broker or doxlor shail be deemed to be a non-resident if he resides in any place not mbject to the jurisdiction of the United States.

Pula X 158 8. Statement of Financial Condition to be Filed With Application for Registration as a Broker or Dealer.

City Fizory broker or dealer who files an application for registration on Form Bisball file with such application, in duplicate original, a statement of financial condition in such detail as will disclose the nature and amount of assets and liabilities and the net worth of such

broker or dealer (securities of such broker or dealer or in which such broker or dealer has an interest shall be listed in a separate schedule and valued at the market) as of a date within 30 days of the date on which such statement is filed; provided, however, that this requirement shall not apply to a partnership succeeding to and continuing the business of another partnership registered as a broker or dealer at the time of such succession. Attached to such statement shall be an oath or affirmation that such statement is true and correct to the best knowledge and belief of the person making such oath or affirmation. The oath or affirmation shall be made before a person duly authorized to administer such oath or affirmation. If the broker or dealer is a sole proprietorship, the oath or affirmation shall be made by the proprietor; if a partnership, by a general partner; if a corporation, by a duly authorized officer.

(b) The schedule of securities furnished as a part of such statement of financial condition shall be deemed confidential if bound separately from the balance of such statement, except that it shall be available for official use by any official or employee of the United States or any state, by national securities exchanges and national securities associations of which the person filing such statement is a member, and by any other person to whom the Commission authorizes disclosure of such information as being in the public interest. Nothing contained in this paragraph shall be deemed to be in derogation of the rules of any national securities association or national securities exchange which give to customers of a member, broker or dealer the right, upon request to such member, broker or dealer, to obtain information relative to his financial condition.

(c) The statement of financial condition required by this rule shall constitute a “document supplemental” to such application for registration within the meaning of Section 15 (b) of the Act.

RULES RELATING TO OVER-THE-COUNTER MARKETS Rule X-15C-1. Definitions.

As used in any rule adopted pursuant to section 15 (c) (1) of the Act:

(a) The term "customer" shall not include a broker or dealer. (b) The term "the completion of the transaction” means:

(1) In the case of a customer who purchases a security through or from a broker or dealer, except as provided in paragraph (2), the time when such customer pays the broker or dealer any part of the purchase price, or, if payment is effected by a bookkeeping entry, the

time when such bookkeeping entry is made by the broker or dealer for any part of the purchase price.

(2) In the case of a customer who purchases a security through or from a broker or dealer and who makes payment therefor prior to the time when payment is requested or notification is given that payment is due, the time when such broker or dealer delivers the security to or into the account of such customer.

(3) In the case of a customer who sells a security through or to a broker or dealer, except as provided in paragraph (4), if the security is not in the custody of the broker or dealer at the time of sale, the time when the security is delivered to the broker or dealer, and if the security is in the custody of the broker or dealer at the time of sale, the time when the broker or dealer transfers the security from the account of such customer.

(4) In the case of a customer who sells a security through or to a broker or dealer and who delivers such security to such broker or dealer prior to the time when delivery is requested or notification is given that delivery is due, the time when such broker or dealer makes payment to or into the account of such customer.

Rule X-15C1-2. Fraud and Misrepresentation.

(a) The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

(b) The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any untrue statement of a material fact and any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, which statement or omission is made with knowledge or reasonable grounds to believe that it is untrue or misleading.

(c) The scope of this rule shall not be limited by any specific definitions of the term "manipulative, deceptive, or other fraudulent device or contrivance" contained in other rules adopted pursuant to section 15 (c) (1) of the Act.

Rule X-15C1-3. Misrepresentation by Brokers and Dealers as to Registration.

The term "manipulative, deceptive or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any representation by a broker or dealer that the

registration of a broker or dealer, pursuant to section 15 (b), or the failure of the Commission to deny or revoke such registration, indicates in any way that the Commission has passed upon or approved the financial standing, business, or conduct of such registered broker or dealer or the merits of any security or any transaction or transactions therein.

Rule X-15C1-4. Confirmation of Transactions.

The term “manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any act of any broker or dealer designed to effect with or for the account of a customer any transaction in, or to induce the purchase or sale by such customer of, any security (other than United States Tax Savings Notes, United States Defense Savings Stamps, or United States Defense Savings Bonds, Series E, F and G) unless such broker or dealer, at or before the completion of each such transaction, gives or sends to such customer written notification disclosing (1) whether he is acting as a broker for such customer, as a dealer for his own account, as a broker for some other person, or as a broker for both such customer and some other person; and (2) in any case in which he is acting as a broker for such customer or for both such customer and some other person, either the name of the person from whom the security was purchased or to whom it was sold for such customer and the date and time when such transaction took place or the fact that such information will be furnished upon the request of such customer, and the source and amount of any commission or other remuneration received or to be received by him in connection with the transaction.

Rule X-15C1-5. Disclosure of Control.

The term “manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any act of any broker or dealer controlled by, controlling, or under common control with, the issuer of any security, designed to effect with or for the account of a customer any transaction in, or to induce the purchase or sale by such customer of, such security unless such broker or dealer, before entering into any contract with or for such customer for the purchase or sale of such security, discloses to such customer the existence of such control, and unless such disclosure, if not made in writing, is supplemented by the giving or sending of written disclosure at or before the completion of the transaction.

324214°-55—7

Rule X-15C1-6. Disclosure of Interest in Distributions.

The term “manipulative, deceptive, or other fraudulent device or contrivance,” as used in section (15) (c) (1) of the Act, is hereby defined to include any act of any broker who is acting for a customer or for both such customer and some other person, or of any dealer who receives or has promise of receiving a fee from a customer for advising such customer with respect to securities, designed to effect with or for the account of such customer any transaction in, or to induce the purchase or sale by such customer of, any security in the primary or secondary distribution of which such broker or dealer is participating or is otherwise financially interested unless such broker or dealer at or before the completion of each such transaction, gives or sends to such customer written notification of the existence of such participation or interest.

Rule X-15C1-7. Discretionary Accounts.

(a) The term "manipulative, deceptive, or other fraudulent device or contrivance, as used in section 15 (c) (1) of the Act, is hereby defined to include any act of any broker or dealer designed to effect with or for any customer's account in respect to which such broker or dealer or his agent or employee is vested with any discretionary power any transactions of purchase or sale which are excessive in size or frequency in view of the financial resources and character of such account.

(b) The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any act of any broker or dealer designed to effect with or for any customer's account in respect to which such broker or dealer or his agent or employee is vested with any discretionary power any transaction of purchase or sale unless immediately after effecting such transaction such broker or dealer makes a record of such transaction which record includes the name of such customer, the name, amount, and price of the security, and the date and time when such transaction took place.

Rule X-15C1-8. Sales at the Market.

The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any representation made to a customer by a broker or dealer who is participating or otherwise financially interested in the primary or secondary distribution of any security which is not admitted to trading on a national securities exchange that such security is being offered to such customer “at the market” or at a price related