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and the securities being offered. The Act empowers the Commission to classify issues, issuers and prospectuses, to prescribe appropriate forms, and to increase, or in certain instances vary or diminish, the particular items of information required to be disclosed as the Commission deems appropriate in the public interest or for the protection of investors. To facilitate the registration of securities by different types of issuing companies, the Commission has prepared special registration forms which vary in their disclosure requirements so as to provide maximum disclosure of the essential facts pertinent in a given type of case while at the same time minimizing the burden and expense of compliance with the law.

In general, the registration statement of an issuer other than a foreign government must disclose such matters as the names of persons who participate in the management or control of the issuer's business; the security holdings and remuneration of such persons; the general character of the business, its capital structure, past history and earnings; underwriters' commissions; payments to promoters made within 2 years or intended to be made; the interest of directors, officers and principal stockholders in material transactions; pending or threatened legal procedings; and the purposes to which the proceeds of the offering are to be applied, and must include financial statements certified by independent accountants. The registration statement of a foreign government must contain comparable information in regard to the underwriting and distribution of the securities being registered, the natural and industrial resources of the country, its revenues, obligations and expenses, a description of the securities being registered, and similar matters. The prospectus constitutes a part of the registration statement and presents the more important of the required disclosures.

Examination Procedure

Registration statements are examined for compliance with the standards of adequate and accurate disclosure by the Commission's staff. This examination is primarily the responsibility of the Division of Corporation Finance; however, as a result of a reallocation of functions during the fiscal year,' statements filed by investment companies registered under the Investment Company Act of 1940 are now examined by the Division of Corporate Regulation. If it appears that a statement does not conform in material respects with the applicable requirements, the registrant is usually notified by an informal letter of comment and is afforded an opportunity to file correcting or clarifying amendments. In addition, the Commission has the power, after notice and opportunity for hearing, to issue an order suspending the effectiveness of a registration statement if it finds that material repre1 See Securities Act Release No. 4731 (November 10, 1964).

sentations are misleading, inaccurate or incomplete. In certain instances, such as where the deficiencies in a registration statement appear to stem from careless disregard of applicable requirements or from a deliberate attempt to conceal or mislead, the letter of comment procedure is not used and the Commission either institutes an investigation to determine whether "stop-order" proceedings should be instituted or immediately institutes such proceedings. Information regarding the exercise of the "stop-order" power during fiscal year 1965 appears below under the heading "Stop-Order Proceedings." Time Required to Complete Registration

The Commission's staff endeavors to complete its examination of registration statements in as short a time as possible. The Act provides that a registration statement shall become effective on the 20th day after it is filed (or on the 20th day after the filing of any amendment thereto). Since most registration statements require one or more amendments, they usually do not become effective until some time after the original 20-day period. The period between filing and effective date is intended to afford investors an opportunity to become familiar with the proposed offering through the dissemination of the preliminary form of prospectus. The Commission is empowered to accelerate the effective date so as to shorten the 20-day waiting period, taking into account the adequacy of the information respecting the issuer theretofore available to the public, the facility with which the facts about the offering can be understood, and the public interest and the protection of investors. The note to Rule 460 under the Act lists some of the more common situations in which the Commission considers that the statute generally requires it to deny acceleration.

The median number of calendar days which elapsed from the date of original filing to the effective date with respect to the 1,097 registration statements that became effective during the 1965 fiscal year2 was 36, the identical figure as in the previous year when only 960 registration statements became effective. The corresponding figure for fiscal year 1963 was 52 days for 985 registration statements. The number of registration statements filed during fiscal year 1965 was 1,376, as compared with 1,192 and 1,159, respectively, in the 2 preceding years.3

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The following table shows by months during the 1965 fiscal year the number of calendar days elapsed during each of the three principal

This figure excludes 169 registration statements filed by investment companies pursuant to the provisions of Section 24 (e) of the Investment Company Act of 1940. The median elapsed time with respect to these statements was 16 calendar days.

3 These figures include 167, 153 and 174 registration statements filed by investment companies pursuant to Section 24 (e) of the Investment Company Act of 1940 for fiscal years 1965, 1964 and 1963, respectively.

stages of the registration process for the median registration statement, the total elapsed time and the number of registration statements effective.

Time in registration under the Securities Act of 1933 by months during the fiscal year ended June 30, 1965

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VOLUME OF SECURITIES REGISTERED

A total of 1,266 statements registering securities in the amount of $19.4 billion became effective under the Securities Act of 1933 during the fiscal year 1965. This was an increase of 13 percent in the number of statements, and an increase of 15 percent in the dollar amount of securities registered over the preceding fiscal year. The chart on page 26, shows the number and dollar amounts of registrations from 1935 to 1965.

The figures for 1965 cover all registrations which became effective, including secondary distributions and securities registered for other than cash sale, such as issues exchanged for other securities, and securities reserved for conversion. Of the dollar amount of securities registered in 1965, 75 percent was for the account of issuers for cash sale, 10 percent for the account of issuers for other than cash sale, and nearly 15 percent for the account of others, as shown below.

Accounts for which securities were registered under the Securities Act of 1933 during the fiscal year 1965 compared with the fiscal years 1964 and 1963

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The amount of securities offered for cash sale for the account of issuers, $14.7 billion, was about the same as in the preceding fiscal year. Registration of new common stock issues aggregated $10.6 billion, $632 million more than in the 1964 fiscal period, largely reflecting increased registrations of investment company issues which totaled a record $6.4 billion. Registration of new bonds, notes and debentures declined 19 percent from the previous year and accounted for $3.7 billion of the 1965 volume. Preferred stock issues registered for the account of issuers amounted to $307 million, an increase of 37 percent. Appendix Table 1 shows the number of statements which became effective and total amounts registered for each of the fiscal years 1935 through 1965, and contains a classification by type of security of issues to be offered for cash sale on behalf of the issuer during those years. More detailed information for 1965 is given in Appendix Table 2.

Corporate issues to be offered immediately after effective registration amounted to $5.3 billion, a decrease of $1.2 billion from the previous year. Of the total, electric, gas and water companies registered

$1.7 billion of new issues, which was less than in 1964 and 1963. Issues of communication companies amounted to $720 million, a sharp decline from $2.2 billion of securities registered in the previous year which included the $1.2 billion A.T. & T. issue and the $200 million Communications Satellite offering. Manufacturing company issues totaled $1.5 billion, the largest amount since the 1962 fiscal period. Among the other industry groups, registration of financial and real estate issues declined slightly to $922 million while issues classified in the "commercial and other" group were somewhat larger in amount than in 1964. Registrations of foreign government issues were almost three times larger than in the previous year, amounting to $303 million.

The following table gives the distribution by industry of issues registered for the account of issuers to be offered for cash sale during the last 3 fiscal years:

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Registration of issues to be offered over an extended period amounted to $9.0 billion compared with $8.2 billion in 1964, an increase of 10.5 percent. These issues are classified below:

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Of the $5.3 billion expected from the immediate cash sale of corporate securities for the account of issuers in 1965, 83 percent was

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