become an associate company during the current calendar year), and (2) The gross revenues attributable to all other utility assets acquired from any non-system public-utility company during the current calendar year by any company within the holding company system. Where figures are unavailable as to the gross revenues derived during the prior calendar year by the selling company, it may be assumed for the purposes of this section that the gross revenues added by such assets bear the same proportion to the gross revenues of the acquiring system for the preceding calendar year as the book value of such assets bears to the book value of the utility assets of the system at the end of the preceding calendar year. (c) For purposes of paragraph (a) (2) of this section, the aggregate book value of the utility assets of such holding company system shall be deemed to include: (1) The book value at the end of the preceding calendar year of the utility assets of the top holding company therein and of every company which is presently an associate of such company (including every company which may have become an associate company during the current calendar year), and (2) The present book value of all other utility assets acquired from any non-system public-utility company during the current calendar year. (d) No company within any holding company system shall be exempt by virtue of this section after July 1, 1939 unless the top holding company therein shall have filed with the Commission a statement that such system falls within the exemption granted by this section, indicating the applicable subparagraph, and that such system claims exemption hereunder, and shall have renewed such (d) No company within any holding company system shall be exempt by virtue of this section after March 1, 1940, unless the top holding company therein shall have filed with this Commission a statement that such system falls within the exemption granted by this section, and showing the aggregate gross revenues from public utility operations of such system during the preceding calendar year (computed in the manner specified in paragraph (b) of this section) and the aggregate book value of the utility assets of such holding company system at the end of the preceding calendar year (computed in the manner specified in paragraph (c) of this section), and shall have renewed such statement within 60 days after the end of each subsequent calendar year. All companies within any system for which a statement has been filed shall continue to be exempt for a period of 60 days after any increase in gross revenues or utility assets which may render paragraph (a) no longer applicable, except in the event of such increase resulting from the acquisition of utility assets or from the introduction of any additional associate company into the holding company system during the current calendar year, in which event the exemption shail forthwith terminate. (Secs. 3 (d), 20 (a), 49 Stat. 811, 833; 15 U.S.C., Sup., 79c (d), 79t (a)) amended effective June 9, 1939, and Nov. 9, 1939, except as provided in par. (d); 4 F.R. 2378, 4549] [As NOTE: This section was amended, effective June 9, 1939; 4 F.R. 2378, and paragraph (d) was amended, effective Nov. 9, 1939, except as provided therein; 4 F.R. 4549. RULES UNDER SECTION 5 OF THE ACT $ 250.5b-2 Registration statements; statement within 60 days after the end of subsidiaries of registered holding comeach subsequent calendar year. All companies within any system for which such a panies. A registered holding company statement has been filed shall continue to which is itself a subsidiary of a regisbe exempt for a period of 60 days after any tered holding company may, in lieu of increase in gross revenues or assets which may render paragraph (a) no longer appli- filing a registration statement on Form cable, except in the event of such increase U-5-B, file a certificate stating that it resulting from the acquisition of utility assets adopts the information, filed by its regisor from the introduction of any additional tered statutory parent in the parent's associate company into the holding company system during the current calendar year, in registration statement or annual supplewhich event the exemption shall forthwithments, or amendments thereto, which it terminate. [As amended, effective June 9, 1939; 4 F.R. 2378] [Preceding paragraph, in small type, superseded by following paragraph during period covered by this Supplement] would itself otherwise be required to report. Such certificate shall contain express reference to each item so adopted and shall be accompanied by RULES UNDER SECTION 9 OF THE ACT such additional data as are necessary to make complete the required statement. § 250.9a2-1 Exemption of certain Such certificate and accompanying stateAny bank ment, and all amendments thereto, shall banks from section 9 (a) (2). be filed in triplicate, of which one copy which, pursuant to § 250.3a3-1, is exshall be signed in the name of the regis-empt from any of the obligations, duties, trant and shall be verified by the person or liabilities imposed upon such bank executing the same. (Secs. 5 (b), 20, 49 a holding company, shall be exStat. 813, 833; 15 U.S.C., Sup., 79e (b), empt from any obligations, duties, or 79t) [Rule U-5B-2, June 15, 1939, effec- liabilities imposed upon such bank as an affiliate by section 9 (a) (2) (49 Stat. tive June 19, 1939; 4 F.R. 2450] 817; 15 U.S.C., Sup., 791 (a) (2)) with respect to RULES UNDER SECTION 6 OF THE ACT $ 250.6b-1 Applications by subsidiaries concerning securities expressly authorized by State commissions. [Revoked] as (a) Any acquisition by such bank of securities described in § 250.3a3-1 (b), regardless of whether such bank is or thereby becomes, directly or indirectly, the beneficial owner of 5 percent or more NOTE: This section was revoked, effective of the outstanding voting securities of Apr. 1, 1939; 4 F.R. 1115. the issuer; (b) Any acquisition of a security other than a voting security; or § 250.6b7-1 Form for use by a registered holding company or subsidiary company with respect to security trans(c) Any acquisition of a voting secuactions. (a) Applications and declarations filed with the Commission after rity by such bank if such bank is not or does not thereby become, directly or April 1, 1939 pursuant to section 6 (b) or 7 of the Act (49 Stat. 814, 815; 15 indirectly, the beneficial owner of 5 perU.S.C., Sup., 79f (b), 79g) with respect cent or more of the outstanding voting to an issue or sale of securities or an securities of the issuer of such security. exercise of any privilege or right to alter (Secs. 3, 20 (a), 49 Stat. 810, 833; 15 U.S.C., Sup., 79c, 79t (a)) [As amended, the priorities, preferences, voting power or other rights of the holders of an out-effective June 5, 1939; 4 F.R. 22861 standing security shall comply with the § 250.9c-3 Certain acquisitions of serequirements of Form U-6B7-1, desig-curities exempted. nated "Adopted February 21, 1939," and the instructions for the use of that form. (b) A declaration on Form U-6B7-1 shall become effective only at such time as the Commission shall fix by order. Every order for hearing on a declaration shall include an order to declarant to show cause why such declaration shail become effective. (c) Until April 1, 1939, any application or declaration subject to paragraph (a) of this section may be filed either on Form U-6B-1 or Form U-7, whichever is appropriate, or on Form U-6B7-1. (a) This section shall become effective forthwith. (Secs. 6 (b), 7, 20 (a), 49 Stat. 814, 815, 833; 15 U.S.C., Sup., 79f (b), 79g, 79t (a)) [Rule U-6B7-1, effective Mar. 2, 1939; 4 F.R. 1115] RULES UNDER SECTION 7 OF THE ACT § 250.7a-1 Form of declarations. [Revoked] (m) Any such company that is primarily a public-utility company may acquire any security which is issued by an industrial or other non-utility enterprise located in the territory served by the acquiring company: Provided, That, upon completion of any such acquisition, the total cost of all such securities ac quired during any calendar year does not exceed $5,000 or an amount equal to one-tenth of 1 percent of the total assets of the acquiring company, whichever is greater. [As amended, effective July 17, 1939; 4 F.R. 3320] § 250.9c-4 Applications for approval of investment programs for current funds of registered holding companies or subsidiaries. (f) Any person making any acquisition pursuant to the provisions of this section NOTE: This section was revoked, effective shall file a report within 30 days (or such Apr. 1, 1939; 4 F.R. 1115. earlier period as the Commission may in its order prescribe) after obtaining an | from capital or unearned surplus and order of the Commission pursuant to the that such payment would not be perprovisions of this section and every 30 mitted as a dividend on application purdays thereafter while such order is in suant to § 250.12c-2; or effect. Such report shall specify all acquisitions and sales of securities by the acquirer subsequent to the last filing of an application or report pursuant to this section, the cost or sale prices thereof, and such other matters as the Commission may in its order prescribe. [As amended, effective Mar. 13, 1939; 4 F.R. 1244] RULES UNDER SECTION 12 OF THE ACT § 250.12c-3 Payments on account of obligations declared as dividends. (a) Hereafter, except in accordance with this section, no registered holding company and no subsidiary company thereof shall, directly or indirectly, make any payment of principal or interest on any note, bond, book account or any indebtedness however evidenced which is or was issued as, or based upon a dividend or dividends created or issued or declared from, or charged against, capital or unearned surplus, or in renewal of, or in exchange for, any such obligation, whether such dividend was declared before or after the Act took effect. In determining whether proposed payments on any such indebt edness issued or declared as a dividend in part out of earned surplus and in part out of capital or unearned surplus, or issued in renewal of, or in exchange for, such indebtedness, are permissible under this section, past payments on account of such indebtedness or any predecessor indebtedness shall be deemed to have been first applied in reduction of the portion of such indebtedness issued or declared as a dividend out of earned surplus. (b) A company proposing to make such a payment shall file with the Commission an application stating said purpose and setting forth the pertinent facts. (2) will impair the financial integrity of the applicant or of its subsidiaries, or will render inadequate the working capital of a public-utility company, or will result in the circumvention of the provisions of the Act, or the rules, regulations or orders of the Commission thereunder. (Secs. 12 (c), 20 (a), 49 Stat. 823, 833; 15 U.S.C., Sup., 791 (c), 79t (a)) [Rule U-12C-3, effective Nov. 8, 1939; 4 F.R. 4539] § 250.12d-1 Sale of public utility securities and utility assets by registered holding companies. (d) Paragraph (a) of this section shall not apply to: (1) The sale of any prime commercial paper or other security which has been acquired by the company making such sale pursuant to § 250.9c-3 (b); (2) The pledge of any security as collateral for any other security issued by the pledgor if such pledge is made at the time of the issuance or sale of such other security by the pledgor: Provided, That such pledge has been disclosed in a declaration or application filed with the Commission in connection with the issuance or sale of such other security or that the issuance and sale of such other security is exempt under the first sentence of section 6 (b) of the Act (49 Stat. 814; 15 U.S.C., Sup., 79f (b)); (3) The sale of any security of any public-utility company which does not operate or have any subsidiary company which operates in the United States; (4) The sale of any security, the seller of which, prior to such sale, owns less than 5 percent of the class of securities so sold; (5) The sale of any security if the consideration for such sale and all prior sales of securities of the same class dur (c) After hearing on such application, the Commission will, by order, permit such payment subject to such terms and conditions as it finds necessary or appro-ing the same calendar year (excluding priate in the public interest or the interest of investors or consumers unless the Commission finds that such payment (1) will be, in substance or effect or equivalence, the payment of a dividend sales expressly authorized by the Commission) aggregates less than $50,000, and (i) The security so sold is not a security of an associate company; or (ii) The security so sold is not a vot- § 250.12f-2 Payment of fees to asing security or a security convertible sociates and affiliates in connection into a voting security. with an acquisition or sale of securities. (2) Any affiliate of the applicant or declarant, or of a company of which the applicant or declarant is a subsidiary, or (3) [As amended, effective May 23, 1939; 4 F.R. 2131] (e) Paragraph (a) of this section shall | (a) not apply to the sale of any utility assets where (1) the gross consideration, or book value of such assets, whichever is the greater, is less than $100,000, and (2) the acquisition of such assets by the other party to the transaction is not subject to the jurisdiction of the Commission under sections 9 (a) and 10 of the Act (49 Stat. 817, 818; 15 U.S.C., Sup., 791 (a), 79j). (Secs. 12 (d), 20 (a), 27, 49 Stat. 824, 833, 836; 15 U.S.C., Sup., 791 (d), 79t (a), 79z—1) [As amended, efective May 12, 1939; 4 F.R. 2019] § 250.12f-1 Sale of public utility securities and utility assets to associate companies or affiliates. * (d) Paragraph (a) of this section shall not apply to the sale of any security if the acquisition of such security by the other party to such transaction is not subject to approval of the Commission pursuant to sections 9 (a) and 10 of the Act (49 Stat. 817, 818; 15 U.S.C., Sup., 791, 79j), and if any of the following conditions is satisfied: (1) The seller of the securities so sold, prior to such sale, owns less than 5 percent of the class of securities so sold; or (2) The security so sold is issued by a public utility company which does not operate, or have any subsidiary company which operates, in the United States; or RULES UNDER SECTION 13 OF THE ACT $ 250.13-4 Exemption in the case of transactions with foreign associates. (a) Any subsidiary company of a registered holding company, which subsidiary is or is about to become engaged in the performance of any service, sales, or construction contract for any associate company which does not derive, directly or indirectly, any material part of its income from sources within the United States and which is not a public-utility company operating within the United States, may make application to the Commission for exemption, in whole or in part, from the standards established by section 13 (b) of the Act, (49 Stat. 825; 15 U.S.C., Sup., 79m (b)) and the rules and regulations promulgated thereunder, relating to the performance of any service, sales or construction contract for such associate companies. (b) No form is prescribed therefor, but every such application shall comply with the provisions of $250.0-2. Every such application shall fully set forth information regarding ownership (3) Such sale is to a company which owns, directly or indirectly, all the out-of security issues, servicing activities of standing securities (except the minimum amount of stock required to qualify directors) of the seller of such securities; the applicant and such other data as may be necessary to enable the Commission to determine if, by reason of the lack of any major interest of holders of securities offered in the United States in servicing sidiaries, or for any other reason, such an application for exemption should be the public interest or for the protection granted as necessary or appropriate in arrangements affecting such serviced sub of investors. (i) The security so sold is not a se(c) Upon filing such an application in curity of an associate company; or good faith, the applicant shall be en(ii) The security so sold is not a vot-titled to a temporary exemption from all ing security or a security convertible into a voting security. [As amended, effective May 12, 1939; 4 F.R. 2019] provisions of section 13 (b) of the Act (49 Stat. 825; 15 U.SC., Sup., 79m (b)), and the rules and regulations promulgated thereunder, as to which an exemp tion is sought, pending action by the Commission upon the application. [As amended, effective June 26, 1939; 4 F.R. 2492] a medium of investment in securities for the benefit of a registered holding company or its employees or officers, or (iii) a company engaged in the business of selling goods to associate companies or performing services or construction, or (iv) a company controlling, directly or indirectly, any company specified in (i), (ii), or (iii); or (2) Such transaction consists of a sale of goods produced by the seller. (Secs. 13 (b), 20 (a), 49 Stat. 825, 833; 15 U.S.C., Sup., 79m (b), 79t (a)) [As amended, effective June 30, 1939; 4 F.R. 2272] (d) Any subsidiary company of a registered holding company (including a mutual service company) may perform service, sales, or construction contracts for any associate company which does not derive, directly or indirectly, any material part of its income from sources within the United States and which is not a public-utility company operating within the United States, without complying with the standards established by section 13 (b) of the Act (49 Stat. 825; RULES UNDER SECTION 14 OF THE ACT 15 U.S.C., Sup., 79m (b)), and the rules § 250.14-4 Annual supplements to regand regulations thereunder, and without istration statement; subsidiaries of registhe necessity of filing an application for tered holding companies. A registered or securing an order of exemption from holding company which is itself a subsidthose standards, so long as the aggregate iary of a registered holding company cost to all such associate companies for may, in lieu of filing a report on Form services, sales, or construction performed U-5-S file a certificate stating that it by virtue of the exemption granted by adopts the information, filed by its registhis paragraph (whether performed by tered statutory parent in the annual supone or more subsidiary companies or mu-plement to the parent's registration tual service companies in the same hold-statement, and amendments thereto, ing company system) does not exceed which it would itself otherwise be required $10,000 within any one calendar year. (Secs. 13 (b), 20 (a), 49 Stat. 825, 833; 15 U.S.C., Sup., 79m (b), 79t (a)) [Rule U-13--4, effective June 5, 1939, amended effective June 26, 1939; 4 F.R. 2272, 2492] as to report. Such certificate shall contain RULES UNDER SECTION 17 OF THE ACT § 250.17-0 Adoption of certain forms. NOTE: Paragraph (b) of this section was revoked Feb. 20, 1939, effective Apr. 1, 1939; 4 F.R. 1109. §§ 250.17c-1 to 250.17c-12 [Revoked.] NOTE: The above sections were revoked and the following new §§ 250.17c-1 to 250.17c-3 were adopted, effective Apr. 1, 1939; 4 F.R. 1109. (1) Neither the company performing the services or construction, or selling the goods, nor the associate company receiving such services or construction, or § 250.17c-1. Exemptions from section buying such goods, is (i) a public-util-17 (c) of the Act for officers and direcity or holding company, (ii) an invest-tors of operating companies. As to actment company or investment trust, in- ing as officer or director or both of any cluding any company or trust which is operating company, the following per |