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of that Commission which was charged with the administration of the Securities Act. Commissioner Woodside transferred to the Securities and Exchange Commission upon its establishment by the Securities Exchange Act of 1934. In 1940 he became Assistant Director and in 1952 Director of the Division (now Division of Corporation Finance) responsible for administering the registration and reporting provisions of the Securities Act, Securities Exchange Act, the Trust Indenture Act of 1939, and, in part, the Investment Company Act of 1940. For 14 months commencing in May 1948, he was on loan to the Department of the Army and assigned to duty in Japan as a member of a five-man board which reviewed reorganization plans of Japanese companies under the Occupation's decartelization program; and beginning in December 1950, he served 17 months with the National Security Resources Board and later with the Defense Production Administration as Assistant Deputy Administrator for Resources Expansion. He took office as a member of the Securities and Exchange Commission on July 15, 1960, for the term of office expiring June 5, 1962, and was reappointed effective June 5, 1962, for the term expiring June 5, 1967.
Hugh F. Owens Commissioner Owens was born in Muskogee, Oklahoma on October 15, 1909, and moved to Oklahoma City in 1918. He graduated from Georgetown Preparatory School, Washington, D.C., in 1927, and received his A.B. degree from the University of Illinois in 1931. In 1934, he received his LL.B. degree from the University of Oklahoma College of Law, and became associated with a Chicago law firm specializing in securities law. He returned to Oklahoma City in January 1936, to become associated with the firm of Rainey, Flynn, Green and Anderson. From 1940 to 1941, he was vice-president of the United States Junior Chamber of Commerce. During World War II he attained the rank of Lieutenant Commander U.S.N.R. and served as Executive Officer of a Pacific Fleet destroyer. In 1948, he became a partner in the firm of Hervey, May and Owens. From 1951 to 1953, he served as counsel for the Superior Oil Company in Midland, Texas, and thereafter returned to Oklahoma City, where he engaged in the general practice of law under his own name. He also served as a part-time faculty member of the School of Law of Oklahoma City University. In October 1959, he was appointed Administrator of the then newly enacted Oklahoma Securities Act and was active in the work of the North American Securities Administrators, serving as vice-president and a member of the executive committee of that Association. He took office as a member of the Securities and Exchange Commission on March 23, 1964, for the term expiring June 5, 1965, and was reappointed for the term expiring June 5, 1970.
Hamer H. Budge
Commissioner Budge was born in Pocatello, Idaho, on November 21, 1910. He attended the College of Idaho, Caldwell, Idaho, received an A.B. degree from Stanford University, Palo Alto, California, majoring in political science, and an LL.B. degree from the University of Idaho in Moscow, Idaho. He is admitted to practice before the Supreme Court of Idaho and the Supreme Court of the United States and practiced law in the city of Boise, Idaho, from 1936 to 1951, except for 312 years in the United States Navy (1942–1945), with final discharge as Lieutenant Commander. Elected to the Idaho State Legislature, he served three sessions, two as assistant Republican floor leader and one as majority floor leader. First elected to Congress in November 1950, he represented Idaho's Second Congressional District in the United States House of Representatives during the 82, 83d, 84th, 85th, and 86th Congresses. In the House he was a member of the Rules Committee, Appropriations Committee, and Interior Committee. During the period from 1961 until his appointment to the Commission he was District Judge in Boise. He took office as a member of the Securities and Exchange Commission on July 8, 1964, for the term of office expiring June 5, 1969.
Francis M. Wheat
Commissioner Wheat was born in Los Angeles, California, on February 4, 1921. He received an A.B. degree in 1942 from Pomona College, in Claremont, California, and an LL.B. degree in 1948 from the Harvard Law School. At the time of his appointment to the Commission, Commissioner Wheat was a member of the Los Angeles law firm of Gibson, Dunn & Crutcher, with which he became associated upon his graduation from law school. His practice was primarily in the field of corporation and business law, including the registration of securities for public offering under the Securities Act of 1933. He has been active in bar association work, including service as Chairman of the Committee on Corporations of the Los Angeles County Bar Association and Chairman of the Subcommittee on Investment Companies and Investment Advisers, Committee on Federal Regulation of Securities, American Bar Association (Banking and Business Law Section). He also has written or co-authored articles on various aspects of the securities business and its regulation, both under Federal and state law. He took office as a member of the Commission on October 2, 1964, for the term expiring June 5, 1966.
OPERATION OF THE SECURITIES ACTS AMENDMENTS OF
1964; IMPLEMENTATION OF SPECIAL STUDY RECOMMENDATIONS
OPERATION OF 1964 AMENDMENTS Fiscal year 1965 marked the enactment and the beginning of the Commission's administration of the Securities Acts Amendments of 1964, the most significant statutory advance in Federal securities regulation and investor protection since 1940. The principal objectives of the 1964 amendments were to extend to investors in securities traded over the counter the same fundamental disclosure and insider trading protections as were previously afforded by the Securities Exchange Act of 1934 to investors in listed securities, to strengthen the standards of entrance into the securities business, and to make more effective the disciplinary controls of the Commission and the rules of industry selfregulatory organizations over securities brokers and dealers and persons associated with them.
Obviously, the full impact of such far-reaching legislation could not be felt during the fiscal year. Aside from certain built-in delays in the statutory scheme, the Commission moved forward deliberately, well aware of the need of newly regulated companies for adequate time to prepare for bringing themselves into compliance and of the need for further study in some areas before taking definitive action. Nevertheless, the amendments have already had significant consequences and a substantial beginning has been made toward full incorporation of the new provisions into the fabric of securities regulation. In the course of the year, among other things, over-the-counter issuers filed a total of 1,508 registration statements pursuant to new Section 12(g) of the Exchange Act, and thus took the first step toward bringing themselves within the full panoply of the Exchange Act's disclo. sure and reporting requirements. The Commission, in addition to making the necessary internal preparations to meet its additional responsibilities, took steps to implement the legislation through the adoption or revision of various rules and forms. In a number of administrative proceedings against broker-dealers and persons associated with them, it imposed the new direct sanctions available against such associated persons. It made use in two instances of its new authority to suspend over-the-counter trading in specified securities. These matters and other action taken pursuant to the amendments are discussed in more detail in the following sections.
Extension of Disclosure Requirements to Over-the-Counter Securities
The 1964 amendments extended to a significant portion of the securities traded in the over-the-counter markets the registration, periodic reporting, proxy solicitation and insider reporting and trading provisions of the Exchange Act previously applicable to securities listed on the securities exchanges. The principal statutory mechanism for achieving this extension was the enactment of new Section 12(g) which requires an issuer of securities traded in over-the-counter markets with total assets exceeding 1 million dollars and a class of non-exempt equity security held of record by 750 or more persons 1 to register such security by filing a registration statement with the Commission within 120 days after the last day of its first fiscal year ended after July 1, 1964, on which it meets the above standards. In order to provide a reasonable period for preparation of the required filing by the issuers involved and to permit gradual assumption by the Commission of its administrative burdens, the Commission postponed the required filing date until April 30, 1965, for those issuers which otherwise would have been required to file at an earlier date, except for companies required to file reports with the Commission under Section 13 or 15(d) of the Act.
In an effort to bring the new legislation to the attention of companies which might be subject thereto, the Commission notified more than 7,000 companies not previously subject to the Commission's reporting requirements which, according to information obtained from over-the-counter quotation services and commercial financial reporting services, appeared possibly to be subject to Section 12(g), of the applicability of that Section. Those companies which on the basis of responses to a questionnaire were apparently required to register securities with the Commission were provided with copies of the appropriate forms, rules and regulations.
The first registration statements under Section 12(g) were filed in the second quarter of the fiscal year. From a total of 50 statements filed in that quarter, the number increased to 186 in the third quarter and to 1,272 in the final quarter. Thus, as has been noted, a total of 1,508 registration statements had been filed pursuant to Section 12(g) by the end of the fiscal year. Two statements were withdrawn before the end of the year by the issuers when it was determined that they were not required to file under the Act. Of the total of 1,508 registration statements, 929 were filed on behalf of issuers already subject to the reporting requirements of Section 13 or 15(d) of the Act.
During the fiscal year, requests by 180 issuers for extensions of time for filing were granted. A majority of these requests was based on the
After July 1, 1966, this number will be reduced to 500.
* Rule 12g-1(a), adopted September 15, 1964 in Securities Exchange Act Release No. 7429.