tionship of dealer activities of exchange members to the liquidity and continuity of exchange markets and the probable consequences of segregation in the over-the-counter markets. It was clearly brought out that the report itself was preliminary in character. Emphasis was given to the necessity and desirability of continued exploration and further study of the problem, not only by the Government but by persons in the securities business and others. The Commission accordingly refrained from judgment upon those aspects of the problem which in its opinion deserved further study and limited itself to the conclusions and recommendations that seemed called for by the data available. Plans for continuation and extension of the study are presently being made. These recommendations included no suggested legislation for the present, since the Commission believed that to incorporate now into statutory law the requirement of complete segregation would be to fail to utilize the potentialities for flexible control and evolutionary development afforded by the administrative mechanism which the Congress had already provided. Its conclusion was, on the other Sand, that it should develop and initiate an administrative program directed toward those aspects of the problem which demand immediate concern, i. e., the conflict of interest implicit in the combination of the broker and dealer functions and the type of dealer activity that exerts undue influence on prices. REGISTRATION OF SECURITIES ON EXCHANGES PERMANENT REGISTRATIONS Section 12 of the Securities Exchange Act of 1934, requires the registration of all securities which are listed on national securities exchanges, unless such securities are exempted by the Act or the rules and regulations promulgated thereunder. The registration of ecurities on national securities exchanges is accomplished by the issuer filing, on the appropriate form, an application for the registration of securities with the Commission and with the exchange. Each of the forms of application provides for the submission of data of the character called for in the Act in the detail necessary or appropriate in the public interest or for the protection of investors. To the basic set of forms for the registration of securities on national securities exchanges, have been added forms for the registration of (1) American certificates against foreign issues and for the underlying securities; and (2) Securities of foreign private issuers, other than bonds; (3) Bonds of foreign private issuers. The problem of procuring registration of the numerous issues of foreign securities which were already listed on national securities exchanges when the Act became effective has thus been met. The basic set of forms for registration of securities on national securities exchanges has been further complemented by the publication of forms for additional securities of issuers having securities already registered, and for securities of persons who have succeeded to such issuers under certain circumstances. A number of improving amendments have been made in the forms previously published and the Commission is now engaged in the complete revision of such forms to adapt them for use by issuers which have not previously had securities registered and in the preparation of special forms for issuers emerging from insolvency proceedings and for issuers succeeding to other issuers." Pursuant to Section 13 of the Securities Exchange Act of 1934, the Commission has adopted rules and regulations governing the submission of annual reports. These annual reports are designed to keep up to date the information contained in the applications for permanent registration of securities. As of the close of the fiscal year, the Commission had adopted forms for the annual reports of the following issuers having securities registered on national securities exchanges: (1) Corporations in general; (2) unincorporated issuers; (3) railroads and communications companies, including those in receivership or bankruptcy; (4) insurance companies; (5) protective committees; (6) voting trustees; (7) incorporated investment trusts; and (8) unincorporated investment trusts. The annual reports are required to be filed, on the appropriate form, with the Commission and with the exchange on which the securities are registered. Issuers of foreign securities registered on national securities exchanges are, until further action of the Commission, exempt from the requirements of filing annual reports. One of the major functions of the Commission is the examination. of applications for registration of securities on national securities exchanges and annual reports subsequently filed. These applications and annual reports are examined for the purpose of determining whether they contain full and adequate disclosure of the information required by the Act and the rules and regulations promulgated thereunder. When the examination reveals deficiencies in such applications or reports, the applicants or issuers are so advised and On Sept. 23, 1936, the Commission promulgated Form 22, For Issuers Reorganized in Insolvency Proceedings or Which Have Succeeded to a Person in Insolvency Proceedings. amendments are requested. These amendments are examined and analyzed in the same manner as the applications and reports. The cooperation of the various national securities exchanges has been of assistance to the Commission in procuring the necessary amendments of deficient applications and annual reports. CONFIDENTIAL TREATMENT OF APPLICATIONS, REPORTS, OR Section 24 (b) of the Securities Exchange Act of 1934, provides that any person filing an application, report, or document with the Commission may make written objection to the public disclosure of the information contained therein. During the year, the rules governing objections to the public disclosure of material filed with the Commission were amended for the purpose of clarification. The rules, as amended, provide that perons wishing to object to the public disclosure of any application, report, or document filed with the Commission under any provision of the Securities Exchange Act of 1934, may file the portion thereof to the public disclosure of which objection is made, with the Chairan of the Commission, together with an application stating the Funds upon which the objection is based. In connection with applications for registration of securities on ational securities exchanges, objections to public disclosure of 966 ems of information were made during the year by 631 issuers. Confidential treatment was granted certain information involving items filed by 162 issuers; and material filed by 370 issuers inelving 577 items, was made public. Objection to public disclosure of information filed in connection ith annual reports was made by 218 issuers. The applications of such issuers for confidential treatment were granted in whole or part; the information filed by 30 issuers was made public; and 125 are pending. The denial of these applications gave rise to litigation in 21 cases." Applications were made by 71 directors, officers, and beneficial Sockholders for the confidential treatment of 171 ownership reports equity securities relating to 23 issuers. Action was taken in the ses of 68 such persons, involving 166 reports concerning 21 issuers, which the applications were denied and the reports were made blic. During the year, 202 private hearings on applications for confiential treatment of material were held. See list of cases on page 139. 101973-36-3 STATISTICS OF SECURITIES REGISTERED OR EXEMPT FROM REGISTRATION ON NATIONAL SECURITIES 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 registrations related to nearly 2,000,000,000 shares of stock and over $16,000,000,000 in principal amount of 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 in principal amount of bonds temporarily exempt (or, in a few cases, provisionally registered) pending filing on or promulgation of the required appropriate forms. Most issuers temporarily exempt, for whom appropriate forms were available, made application for registration on such forms during the year, as indicated by the fact that, as of June 30, 1936, there remain, in the class of temporarily exempt securities traded on exchanges, 226 securities of 127 issuers. Included in such classes of issuers' most recently registered securities, previously temporarily exempt, are 155 foreign issuers, who registered 292 securities. Of the 36 foreign governments whose securities were previously temporarily exempt from registration, 33 applied for permanent registration; and of the 64 political subdivisions of foreign governments previously in such category, 53 made application for permanent registration of their securities. During the year, 141 issuers filed applications for registration of additional securities. On June 30, 1936, a total of 4,185 securities of 2,295 issuers were permanently registered. These registrations covered nearly 2,700,000,000 shares of stock and approximately $26,000,000,000 in principal amount of bonds. During the year more than 1,500 issuers filed annual reports with the Commission. These reports are now being examined. Several thousand amendments to the applications for permanent registration and annual reports have been received. More than 80 applications for registration of unissued securities on national securities exchanges have been filed. The following table indicates the forms used by issuers in registering securities and the number of securities registered and issuers involved as of June 30, 1936. Form Securities Issuers registered involved 10 Corporations... 11 Unincorporated issuers.. 12 Companies making annual reports under Section 20 of the Interstate Commerce Act, as Amended, or under Section 219 of the Communications Act of 1934. 12-A Companies in receivership or bankruptcy and making annual reports under Section 20 of the Interstate Commerce Act, as Amended, or under Section 219 of the Communications Act of 1934.. 13 Insurance companies other than life and title insurance companies. Certificates of deposit issued by a committee. 15 Incorporated investment companies. 16 Voting trust certificates and underlying securities. Unincorporated issuers engaged primarily in the business of investing or 18 Foreign governments and political subdivisions thereof.. 19 American certificates against foreign issues and for the underlying securities.. Securities other than bonds of foreign private issuers.. 2 Bonds of foreign private issuers. Total. The following table indicates the total number of shares of stock and principal amount of bonds and the issues listed and registered or authorized for addition to list, and exempt from registration on all national securities exchanges as of June 30, 1936, eliminating duplications which occur because of the listing of the same security on more than one exchange. The following table indicates the total number of issuers and The total number of issues and the breakdown of these issues by |