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the registration provisions of the Act. 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 reducing 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 with the issuer; pending legal proceedings; 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 contains information concerning the purposes for which the proceeds of the offering are to be used, the natural and industrial resources of the issuer, its revenues, obligations and expenses, the underwriting and distribution of the securities being registered, and other material matters. The prospectus constitutes a part of the registration statement and contains the more important of the required disclosures.

Examination Procedure

Registration statements are examined by the Commission's staff for compliance with the standards of adequate and accurate disclosure. This examination is primarily the responsibility of the Division of Corporation Finance. Statements filed by investment companies registered under the Investment Company Act of 1940 are 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 a letter of comment and is afforded an opportunity to file correcting or clarifying amendments. The Commission also 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 representations 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, a letter of comment is not sent 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 1966 appears below under the heading "StopOrder 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 can 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, 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.

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The median number of calendar days from the date of the original filing to the effective date for the 1,280 registration statements that became effective during the 1966 fiscal year 1 was 38, compared with 36 days for 1,097 registration statements in fiscal year 1965 and 36 days for 960 registration statements in fiscal year 1964.

The following table shows by months during the 1966 fiscal year the number of calendar days elapsed during each of the three principal stages of the registration process for the median registration statement, the total elapsed time and the number of registration statements which became effective.

1 This figure excludes 247 amendments filed by investment companies pursuant to Section 24 (e) of the Investment Company Act of 1940, which provides for the registration of additional securities through amendment to an effective registration statement rather than the filing of a new registration statement.

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VOLUME OF SECURITIES REGISTERED

During the fiscal year 1966, 1,523 registrations of securities in the amount of $30.1 billion became effective under the Securities Act of 1933.2 The number of statements was the highest since the year ended June 1962, and the dollar amount of registrations was the largest on record. The large volume of issues reflected the general expansion in the economy during the period and the sharply increased need for funds by business. The chart on page 25 shows the number and dollar amounts of registrations from 1935 to 1966.

The figures for 1966 include 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 1966, 85 percent was for account of issuer for cash sale, 8 percent for account of issuer for other than cash sale, and nearly 7 percent for account of others, as shown below.

Account for which securities were registered under the Securities Act of 1933 during the fiscal year 1966 compared with the fiscal years 1965 and 1964.

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"The figure of 1,523 does not include 4 registrations which became effective before competitive bids were received, as to 2 of which amendments disclosing the accepted terms were not filed in fiscal 1966, and 2 of which were withdrawn after the end of the fiscal year.

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The amount of securities offered for cash for account of issuer, $25.7 billion, represented an increase of $11 billion, or 75 percent, over the previous year. Registration of new common stock issues aggregated $18.2 billion, $7.6 billion more than in the 1965 fiscal period, reflecting the continuing increase of registrations of investment company issues which aggregated a record $12.4 billion. The amount of investment company issues was almost double that of the preceding year. Registration of new bonds, notes and debentures increased 90 percent from the previous year and accounted for $7.1 billion of the 1966 volume. Preferred stock issues amounted to $445 million. Appendix Table 1 shows the number of statements which became effective and total amounts registered for each of the fiscal years 1935 through 1966, 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 1966 is given in Appendix Table 2.

Corporate issues scheduled for immediate cash sale totaled almost $8.8 billion, an increase of $3.4 billion over the previous year. Electric, gas and water companies registered $3.0 billion of new issues, the largest amount for this group since 1958. Manufacturing company issues were next highest in volume, totaling $2.8 billion, the largest amount since 1961. Issues of communication companies amounted to $1.3 billion, almost double the amount registered in the previous year. Among the other industry groups, registration of financial and real estate issues totaled $1.0 billion, while trade, service, mining and other miscellaneous issues amounted to over $500 million. Registration of foreign government issues scheduled for immediate sale increased to $482 million from $303 million in the preceding year. In addition, one foreign government issue of $100 million was planned for offering on a continuous basis over a number of years.

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

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Of the $8.8 billion expected from the immediate cash sale of corporate securities for the account of issuers in 1966, over 90 percent was designated for plant and equipment expenditures ($6.4 billion) and working capital ($1.5 billion). The total figure of $7.9 billion represented an increase of more than 50 percent over the corresponding figure for fiscal 1965. The balance was to be used for retirement of securities and for other purposes including purchase of securities and repayment of bank loans. Appendix Table 2, Part 4 contains a classification of uses of proceeds by principal industry groups.

Registration of issues to be offered over an extended period amounted to $16.5 billion compared with $9.0 billion in 1965, the largest amount in any previous fiscal year. These issues are classified below:

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