
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC79g]

 
                      TITLE 15--COMMERCE AND TRADE
 
              CHAPTER 2C--PUBLIC UTILITY HOLDING COMPANIES
 
Sec. 79g. Declarations by registered companies in respect to 
        security transactions
        

(a) Contents

    A registered holding company or subsidiary company thereof may file 
a declaration with the Commission, regarding any of the acts enumerated 
in subsection (a) of section 79f of this title, in such form as the 
Commission may by rules and regulations prescribe as necessary or 
appropriate in the public interest or for the protection of investors or 
consumers. Such declaration shall include--
        (1) such of the information and documents which are required to 
    be filed in order to register a security under section 77g of this 
    title, as the Commission may by rules and regulations or order 
    prescribe as necessary or appropriate in the public interest or for 
    the protection of investors or consumers; and
        (2) such additional information, in such form and detail, and 
    such documents regarding the declarant or any associate company 
    thereof, the particular security and compliance with such State laws 
    as may apply to the act in question as the Commission may by rules 
    and regulations or order prescribe as necessary or appropriate in 
    the public interest or for the protection of investors or consumers.

(b) Effective date of declaration; order of Commission

    A declaration filed under this section shall become effective within 
such reasonable period of time after the filing thereof as the 
Commission shall fix by rules and regulations or order, unless the 
Commission prior to the expiration of such period shall have issued an 
order to the declarant to show cause why such declaration should become 
effective. Within a reasonable time after an opportunity for hearing 
upon an order to show cause under this subsection, unless the declarant 
shall withdraw its declaration, the Commission shall enter an order 
either permitting such declaration to become effective as filed or 
amended, or refusing to permit such declaration to become effective. 
Amendments to a declaration may be made upon such terms and conditions 
as the Commission may prescribe.

(c) Conditions precedent to permitting declaration to become effective

    The Commission shall not permit a declaration regarding the issue or 
sale of a security to become effective unless it finds that--
        (1) such security is (A) a common stock having a par value and 
    being without preference as to dividends or distribution over, and 
    having at least equal voting rights with, any outstanding security 
    of the declarant; (B) a bond (i) secured by a first lien on physical 
    property of the declarant, or (ii) secured by an obligation of a 
    subsidiary company of the declarant secured by a first lien on 
    physical property of such subsidiary company, or (iii) secured by 
    any other assets of the type and character which the Commission by 
    rules and regulations or order may prescribe as appropriate in the 
    public interest or for the protection of investors; (C) a guaranty 
    of, or assumption of liability on, a security of another company; or 
    (D) a receiver's or trustee's certificate duly authorized by the 
    appropriate court or courts; or
        (2) such security is to be issued or sold solely (A) for the 
    purpose of refunding, extending, exchanging, or discharging an 
    outstanding security of the declarant and/or a predecessor company 
    thereof or for the purpose of effecting a merger, consolidation, or 
    other reorganization; (B) for the purpose of financing the business 
    of the declarant as a public-utility company; (C) for the purpose of 
    financing the business of the declarant, when the declarant is 
    neither a holding company nor a public-utility company; and/or (D) 
    for necessary and urgent corporate purposes of the declarant where 
    the requirements of the provisions of paragraph (1) of this 
    subsection would impose an unreasonable financial burden upon the 
    declarant and are not necessary or appropriate in the public 
    interest or for the protection of investors or consumers; or
        (3) such security is one the issuance of which was authorized by 
    the company prior to January 1, 1935, and which the Commission by 
    rules and regulations or order authorizes as necessary or 
    appropriate in the public interest or for the protection of 
    investors or consumers.

(d) Conditions having permission of effectiveness

    If the requirements of subsections (c) and (g) of this section are 
satisfied, the Commission shall permit a declaration regarding the issue 
or sale of a security to become effective unless the Commission finds 
that--
        (1) the security is not reasonably adapted to the security 
    structure of the declarant and other companies in the same holding-
    company system;
        (2) the security is not reasonably adapted to the earning power 
    of the declarant;
        (3) financing by the issue and sale of the particular security 
    is not necessary or appropriate to the economical and efficient 
    operation of a business in which the applicant lawfully is engaged 
    or has an interest;
        (4) the fees, commissions, or other remuneration, to whomsoever 
    paid, directly or indirectly, in connection with the issue, sale, or 
    distribution of the security are not reasonable;
        (5) in the case of a security that is a guaranty of, or 
    assumption of liability on, a security of another company, the 
    circumstances are such as to constitute the making of such guaranty 
    or the assumption of such liability an improper risk for the 
    declarant; or
        (6) the terms and conditions of the issue or sale of the 
    security are detrimental to the public interest or the interest of 
    investors or consumers.

(e) Declaration regarding alterations, priorities, voting power, and 
        other rights of security holders

    If the requirements of subsection (g) of this section are satisfied, 
the Commission shall permit a declaration to become effective regarding 
the exercise of a privilege or right to alter the priorities, 
preferences, voting power, or other rights of the holders of an 
outstanding security unless the Commission finds that such exercise of 
such privilege or right will result in an unfair or inequitable 
distribution of voting power among holders of the securities of the 
declarant or is otherwise detrimental to the public interest or the 
interest of investors or consumers.

(f) Order permitting declaration to become effective

    Any order permitting a declaration to become effective may contain 
such terms and conditions as the Commission finds necessary to assure 
compliance with the conditions specified in this section.

(g) Compliance with State laws as condition to permission of 
        effectiveness

    If a State commission or State securities commission, having 
jurisdiction over any of the acts enumerated in subsection (a) of 
section 79f of this title, shall inform the Commission, upon request by 
the Commission for an opinion or otherwise, that State laws applicable 
to the act in question have not been complied with, the Commission shall 
not permit a declaration regarding the act in question to become 
effective until and unless the Commission is satisfied that such 
compliance has been effected.

(Aug. 26, 1935, ch. 687, title I, Sec. 7, 49 Stat. 815.)

                          Transfer of Functions

    For transfer of functions of Securities and Exchange Commission, 
with certain exceptions, to Chairman of such Commission, see Reorg. Plan 
No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 
1265, set out under section 78d of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 79f of this title.
