Imágenes de páginas
PDF
EPUB

Requirements must be formulated for annual and other periodic eports from issuers, designed to keep reasonably current the inforation already filed with the Commission.

A guide to forms adopted by the Commission will be found in the Appendix.

Having devised and promulgated forms for the registration of securities on exchanges, the Commission was next faced with the problem of examining the registration statements and compiling the report of securities registered or exempt from registration on rchanges. Due to the voluminous material filed with most of the statements and the large number of statements filed, and the limited me available for the examination prior to July 15, the Commission was compelled in the first instance to confine this examination to a arsory study of the statements for obvious errors and deficiencies. A detailed examination and analysis of the statements and all exhibits filed in connection therewith was subsequently undertaken. Upon completion of the preliminary examination, a study and compilation was made of the certifications by exchanges indicating their approval of the registration, following which the lengthy report of securities registered or exempt from registration was prepared. This report contains a list of all securities which have been permaGently registered for trading on national securities exchanges as of July 16, 1935, and those securities which are provisionally registered or reported by the exchanges to be temporarily exempted from registration pending the time when registration forms promulgated by the Commission for such securities became applicable.

The Commission intends to publish, at frequent intervals, supplements to keep this list up to date. Copies of the report of securities registered or exempt from registration on exchanges and the supplements thereto may be secured at the offices of the Commission in Washington, D. C.

Under the provisions of a rule promulgated by the Commission relating to objections to the public disclosure of material filed with the Commission, several hundred requests for confidential treatment of material in connection with applications for permanent registration of securities on national securities exchanges were reeved. This rule provides that if any person filing an application, port or document with the Commission under any provision of The Securities Exchange Act of 1934 wishes to object to the public. isclosure of any such material, he shall file that portion of the application, report, or document which contains such information →parately from the remainder and plainly mark it "confidential."

'As of Nov. 1, 1935, 529 applications for confidential treatment had been received.

The rule further provides that there shall also be filed with such information written objection to its public disclosure stating therein the reasons why public disclosure is not in the public interest and also stating whether or not a hearing is desired. Until and unless the Commission determines that the disclosure of such information is in the public interest, it shall not be made available to the public.

5

When requested by the applicants, hearings are scheduled and the applicants afforded opportunity to appear in support of their application. The Commission considers all the facts, including the reasons stated in the written objections and the information developed in the course of hearings, if any," and makes its determination on the merits of each individual case. Orders of the Commission are then issued indicating the action taken.'

STATISTICS OF SECURITIES REGISTERED OR EXEMPT FROM REGISTRATION

ON EXCHANGES

As of the opening of trading on July 16, 1935, permanent registrations were in effect covering 3,345 securities of 1,841 issuers. These statements registered nearly 2,000,000,000 shares of stock and over $16,000,000,000. face amount in bonds. In addition there were 1,048 securities of 601 issuers, representing more than 400,000,000 shares of stock and over $10,000,000,000 face amount in bonds temporarily exempt (or, in a few cases, provisionally registered) pending filing on or promulgation of the required forms.

REPORTS OF OFFICERS, DIRECTORS, AND PRINCIPAL
STOCKHOLDERS

Section 16 (a) of the Securities Exchange Act provides in part that every person who is directly or indirectly the beneficial owner of more than 10 per centum of any class of any equity security (other than an exempted security) which is registered on a national securities exchange or who is a director or an officer of the issuer of such security, shall file a statement of the amount of all equity securities of such issues of which he is the beneficial owner, and within 10 days after the close of each calendar month thereafter, if there has been any change in such ownership during such month, shall file a statement indicating his ownership at the close of the month and such changes in his ownership as have occurred during such calendar month.

"As of Sept. 4, 1935, 266 requests for hearings were received. "As of Nov. 9, 1935, 124 such hearings have been held.

'As of Nov. 9, 1935, 220 orders have been issued.

The Commission has devised and promulgated three forms for in submitting these reports of ownership, viz, form 4, for reportchanges in ownership of equity securities; form 5, for reporting ership of an equity security which was registered during the calendar month; and form 6, for reporting ownership by perts who have just become officers, directors, or principal stockMers of a company having equity securities registered.

During the period September 1, 1934, to June 30, 1935, inclusive, 14 original and 2,524 amended reports were filed and examined. The Commission compiles and publishes a monthly summary of *ck transactions and holdings of officers, directors, and principal stockholders as reported on these forms 4, 5, and 6. Copies of these mmaries may be procured at the offices of the Commission in Tashington, D. C.

WITHDRAWAL OR STRIKING FROM LISTING AND REGISTRATION OF SECURITIES ON A NATIONAL SECURITIES EXCHANGE

Section 12 (d) of the Securities Exchange Act of 1934 provides that securities registered on national securities exchanges may be thdrawn or stricken from listing and registration in accordance with the rules of the exchange and, upon such terms as the Commismay deem necessary to impose for the protection of investors, pon application by the issuer or the exchange to the Commission. Dales and regulations governing applications for the withdrawal al striking from listing and registration of securities on national securities exchanges have been promulgated. During the period Sptember 1, 1934, to June 30, 1935, 95 such applications were ceived and acted upon by the Commission.

REGISTRATION OF SECURITIES UNDER THE SECURITIES ACT OF

1933

SECURITIES ACT FORMS

order to encourage financing and remove the hesitancy on part of reputable companies to undertake new issues under the rities Act, immediately upon its creation, the Commission dedel intensive study to the classification and simplification of the stration forms. Existing forms were revised and new forms Saulgated.

The outstanding accomplishment in this field was the promulgaof form A-2 for the registration of new security issues of seael corporations. This form was designed to provide a more table method of protecting the investor but at the same time calated to eliminate, as far as possible, needless burdens to new

capital financing. The burden to officers and directors of register companies has been materially reduced and at the same time t value of the statement from the investor's viewpoint has bee increased.

This new form is used for the registration of security issues seasoned corporations with a record of operations. It cannot used for ventures of a promotional nature.

In addition, new forms have been promulgated for the registra tion of oil and gas securities, the form for the registration of secur ties sold or modified in the course of reorganization has been revise and a new form has been adopted for the registration of certificate of deposit.

EXAMINATION OF SECURITIES ACT REGISTRATION STATEMENTS

The examination of registration statements filed pursuant to the Securities Act of 1933, as amended, is one of the primary function of the Commission. These statements are filed by issuers who pro pose to publicly offer for sale or sell securities, except exempt securi ties in interstate commerce or through the mails.

Registration statements are filed on various forms promulgated by the Commission, each of which provides for the submission of data called for in the act and other information needed in deter mining whether the investing public is being apprized regarding material facts relative to the issuer and the issue to be sold.

The examination of these registration statements requires the services of expert financial examiners, attorneys, accountants, mining engineers, petroleum engineers, and other persons expert in the fields relating to the issuance of securities. When such examination dis closes deficiencies in registration statements, registrants are so advised by correspondence and in conference, and amendments are requested or proceedings instituted under section 8 of the act, depending upon the circumstances of the particular case. Amendments filed pursuant to the suggestions contained in the deficiency letter, or otherwise, are examined in a similar manner. Under the provisions of the act, a registration statement becomes effective 20 days after filing, but the filing of an amendment before the effective date starts a new 20-day period, unless such amendments are filed with the consent of the Commission. An amendment filed after the effective date of the registration statement, if such amendment, upon its face, appears to the Commission not to be incomplete or inaccurate in any material respect, becomes effective on such date as the Commission may determine, having due regard to the public interest and the protection of investors.

The examination of registration statements does not involve an praisal of and is not concerned with the merits of the security as investment. The Commission does not pass judgment upon the scrdress of any security. The basic policy is that of informing e investor of the facts concerning securities to be offered for sale interstate and foreign commerce, and the aim is to place adequate nd true information before the investor and to prevent the sale f securities through misrepresentation-perhaps the only way in ich fraudulent securities can be sold to the public. The Comsion's further aim is to accomplish this with the least possible erference to honest business.

TYPICAL DISCLOSURES MADE AS A RESULT OF EXAMINATIONS OF SECURITIES ACT REGISTRATIONS

For the purpose of giving some indication of the nature of dissures made as a result of examinations, a few typical cases are cely summarized below.

A large public utilities system filed a registration statement conraining a balance sheet which showed that the company had a capital plus of approximately $111,000,000 and an earned surplus of aproximately $12,000,000. Appended to this balance sheet were a at many pages of footnotes relating to the balance sheet, which sclosed that many improper accounting and financial practices had been followed. The footnotes were so long and complicated, howver, and contained so many technical terms, that it would be virtrally impossible for an average investor to understand them. Furthermore, even a trained investment analyst would have great diffialty in adjusting the balance sheet in accordance with the footnotes order to obtain a true picture of the company's financial condition. The company was required to compute the effect in dollars and cents, as far as possible, of the improper accounting and financial practices and to set up a balance sheet in a form permitting comparison with the balance sheet as originally filed. The adjusted balance sheet dicated that if proper accounting and financial practices had been followed, the company's assets would have been $153,000,000 less than those shown in the original balance sheet, and that in place f the capital surplus of $111,000,000 and the earned surplus of $12,000,000, the company would have a corporate deficit of $30,000,000. A mining company seeking to register an issue of its common stock, was required to amend its prospectus to disclose that it had en selling stock to the public for more than 20 years and that only a small percentage of receipts from such sales had been used in tual development of the properties, the balance having been used rincipally to pay salesmen's commissions, office expenses, and sal

30662-35-3

« AnteriorContinuar »