Where plan under Section 11 (e) is modified to provide that the issuance of
subscription warrants for new common stock may be eliminated if market con-
ditions prevailing at the time the new common stock is to be sold make issuance
of the warrants impracticable or inadvisable, and the elimination of the war-
rants cannot be made without Commission approval, based on existing market
conditions, held, the proposed modification is fair and equitable to the persons
affected thereby . . . Page 297

...

Section 11 (e) plan modified in accordance with Commission order to provide
for cash distribution to preferred stockholders and creation of escrow fund as
security for payment of any additional amount finally determined to be payable
to preferred stockholders, held, fair and equitable to all persons affected
thereby Page 297

...

Plan filed by registered holding company pursuant to Section 11 (e) of the Act
providing for retirement of outstanding preferred stock of holding company
through allocation of new preferred and common stock of subsidiary company,
and for retirement of holding company's common stock through exchange there-
for of reclassified common stock of subsidiary, held, fair and equitable to the
persons affected thereby ... Page 745

Where a plan submitted pursuant to Section 11 (e) of the Act provides for the
issuance of one class of common stock in place of three classes of stock now
outstanding, and for the distribution of the new common stock among the several
classes of security holders according to their respective rights in the enterprise
held that such plan is "fair and equitable" within the meaning of Section 11
(e) ... Page 46

FEES AND EXPENSES

Application of counsel for certain preferred stockholders for approval of fees
and expenses in Section 11 (e) proceedings, held, denied, the Commission being
unable to find that the services of counsel materially contributed to the formula-
tion of the plan of reorganization or were beneficial in the administration of the
estate... Page 382

Where voluntary exchange plan under Section 11 (e) fails to provide for pay-
ment of fees and expenses in connection therewith, approval of plan conditioned
on company's filing amendment undertaking to pay such fees and expenses as
Commission may approve... Page 505

Amount of compensation allowable for services performed in connection with
Section 11 (e) plan determined by Commission after examination of the record
with respect to the services performed, the fees already received by applicants,
and the allowances previously made to former fee applicants ... Page 453

Where plan under Section 11 (e) fails to provide for payment of fees and
expenses in connection therewith, approval of plan conditioned on company's
filing amendment undertaking to pay such fees and expenses as Commission may
approve... Page 745

NECESSITY

Plan filed by registered holding company pursuant to Section 11 (e) of the Act
providing for retirement of approximately 28% of holding company's preferred
stock through a voluntary exchange of portfolio common stocks of subsidiary
companies, held, an appropriate step toward compliance with Section 11 (b)
and necessary to effectuate the provisions thereof... Page 505

Plan filed by registered holding company pursuant to Section 11 (e) of the
Act providing for redemption of holding company's debt and retirement of its
outstanding preferred and common stock through allocation of reclassified securi-
ties of subsidiary company, and for dissolution of holding company and other

system companies, held necessary to effectuate the provisions of Section 11 (b)
of the Act... Page 745

Where the record shows that the continued existence of the registered hold-
ing company unduly and unnecessarily complicates the structure of the holding
company system of which it is a part and a plan filed under Section 11 (e)
provides for the liquidation and dissolution of such registered holding company,
held, the plan is necessary to effectuate the provisions of Section 11 (b) within
the meaning of Section 11 (e) ... Page 459

Where a plan provides a suitable means of effecting a fair and equitable
distribution of voting power among security holders of the applicant, and
electric utility company and also a registered holding company, held, the plan is
necessary to effectuate the provisions of Section 11 (b) within the meaning of
Section 11 (e) ... Page 160

FAIR AND EQUITABLE PLAN OF REORGANIZATION

Where changed conditions require modification of previously approved plan
of reorganization so as to reduce par value of new common stock and create
capital surplus for establishing necessary reserves, held, plan as modified is
necessary to effectuate the provisions of Section 11 (b), is fair and equitable
to all persons affected, and will be approved.

Where changes in condition of company occurring after Commission approval
of Section 11 (e) plan and before Court approval are urged as basis for with-
drawal of approval of plan, held, changes adduced do not render plan unfair
and approval will not be withdrawn . . Page 92

SEVERANCE

Where portion of plan for settlement of all intra-system intercompany claims
provided separate settlement of all claims and counterclaims affecting one
particular company, and that portion of plan was severable from remainder
and was not objected to whereas other portion was being contested by stock-
holders and a protracted proceeding thereon was not unlikely, held, that portion
of plan will be severed from remainder and order will issue approving severed
portion without passing on remainder of plan . . . Page 651

Where portion of plan for settlement of all intra-system claims provided for
a separate settlement of claims and counterclaims affecting one company call-
ing for transactions which had to be consummated by a certain date in order
for the company to take advantage of certain benefits to its capital structure,
and specified portion of plan was not objected to and was necessary to effectuate
the provisions of Section 11 (b) and was fair and equitable to the persons affected
thereby, held, that portion of plan will be severed from remainder and will be
approved in advance of passing on remainder of plan . . . Page 349

Where plan filed by registered holding company under Section 11 (e) pro-
vides for sale of part of common stock of subsidiary and disposition of remainder
by dividends in the shares of such stock to common stockholders of parent,
and is a suitable means of achieving results which are necessary to comply
with Section 11 (b) (1) and order of Commission thereunder, held, that the
plan is necessary to effectuate the provisions of Section 11 (b) within the mean-
ing of Section 11 (e) and is fair and equitable to the persons affected
thereby ... Page 481

REDISTRIBUTION OF VOTING POWER NECESSARY TO EFFECTUATE THE
PROVISIONS OF SECTION 11 (b)

Where a plan of a public utility subsidiary of a registered holding company
submitted pursuant to the provisions of Section 11 (e) of the Act provides for

the equitable distribution of voting power and is a means reasonably adapted
to the attainment of the ends required by the provisions of Section 11 (b) held
that the plan is "necessary" to effectuate the provisions of Section 11 (b) within
the meaning of Section 11 (e) ... Page 46

MOTION TO DISMISS

Where registered holding company, prior to conclusion of consolidated Section
11 (b) proceedings before a trial examiner, moved to dismiss the proceedings
on the ground that a prima facie case had not been made out, held, decision on
the merits of the motion to dismiss reserved until conclusion of the hearings, in
view of the issues involved and the proof already adduced in the consolidated
proceedings... Page 359

DECLARATION OF STATUS

DECLARED TO HAVE CEASED TO BE A HOLDING COMPANY

A registered holding company, having filed an application pursuant to Section
5 (d) of the Public Utility Holding Company Act of 1935, for an order declaring
that it has ceased to be a holding company, order granted, the Commission finding
that the applicant has ceased to be a holding company .. Page 355

PETITION FOR REHEARING AND STAY

Where Commission, in its Findings and Opinion conditionally approving plan
under Section 11 (e) of Public Utility Holding Company Act, considered all
requested findings and set forth complete findings and conclusion, held, full
compliance with Section 8 (b) of Administrative Procedure Act despite failure
to rule specifically on particular requested findings and conclusions; petitions
for rehearing denied, and requested stay on proposed exchange of securities
pursuant to plan not granted in the absence of substantial objections... Page 572
25 S. E. C.

PART IV

INVESTMENT COMPANY ACT* OF 1940

EXEMPTIONS

Where the purpose of a company is to aid in the economic development of Palestine and its funds are employed primarily for that purpose and its securities offered only to those interested therein, held that the company does not come within the purview of the Investment Company Act of 1940 and is entitled to an exemption under Section 6 (c) from all its provisions . . . Page 24

Transactions between a company controlled by a registered investment company and affiliated persons of an affiliated person of such registered investment company.

Transactions involving the purchase and sale of securities between a company controlled by a registered investment company and affiliated persons of an affiliated person of such registered investment company, where the issuer of said securities is a company subject to examination by banking authority and the price to be paid was determined in arms-length bargaining between the parties and is based upon the net asset value per share as shown in report of examination by such banking authority, held, in view of the circumstances, to meet the standards of Section 17 (b) of the Investment Company Act of 1940. . . Page 203 OFFERS OF EXCHANGE

Terms of offers to holders of investment certificates issued by a registered unit investment trust to exchange such certificates for shares of a registered openend management investment company or certificates issued by another registered unit investment trust on the basis of the relative net asset values of the respective securities to be exchanged, in effect at the time the exchange offers are accepted, without the imposition of a sales load in connection with the exchange, held, are approved, and applicants conditionally exempted, pursuant to Sections 6 (c) and 11 (a) of the Investment Company Act of 1940, from the provisions of Section 11 (a) of the Act for the purpose of making such offers of exchange... Page 141

TRANSACTIONS BETWEEN AFFILIATED PERSONS

The purchase of bonds (1) by an affiliated person of a registered investment company from such investment company and (2) by an affiliated person of a registered investment company from a company controlled by such investment company, in both cases pursuant to a general invitation to all bondholders to tender such bonds, held, to meet the standards of Section 17 (b) of the Investment Company Act of 1940 and ordered exempt from Section 17 (a) of the Act... Page 325

The sale of real estate by an affiliated person of an affiliated person of a registered investment company to a company controlled by such registered investment

*The term "Act" as used in Part IV of this Digest refers to the Investment Company Act of 1940.

25 S. E. C.

company held to meet the standards of Section 17 (b) of the Investment Com-
pany Act and ordered exempt from the provisions of Section 17 (a) of the
Act... Page 291

Where a registered investment company proposes to exchange with an af-
filiated person preferred stock of such affiliate for common stock thereof, held
in view of all the circumstances, to meet the standards of Section 17 (b) of
the Investment Company Act of 1940 and entitled to an exemption from Section
17 (a) thereof... Page 321

An agreement under which an affiliated person of a registered investment
company agrees to borrow money from a company controlled by such investment
company and under which such affiliated person may sell mortgages to a company
controlled by such investment company, held, to meet the standards of Section
17 (b) of the Investment Company Act and ordered exempt from Section 17 (a)
of the Act... Page 122

RECEIPT OF COMPENSATION BY AN AFFILIATED PERSON ACTING AS AGENT
Where a real estate broker is an affiliated person of a registered investment
company and proposes to receive brokerage commissions in connection with the
purchase or sale of real estate to or for the investment company or certain of
its controlled companies, held, an exemption may be granted pursuant to Section
6 (c) of the Investment Company Act of 1940 from Section 17 (e) (1) of the
Act to permit the receipt of such commissions by real estate broker in past
transactions and, subject to certain conditions, in connection with future pur-
chases and sales. . . Page 364

Where an affiliated person of a registered investment company proposes to
borrow money from the investment company, held, that the proposed transaction,
including the commitment fee and annual rate of interest proposed to be paid,
appears to be fair and reasonable and does not involve overreaching on the part
of any person concerned... Page 221

Proposed transaction involving the purchase by an affiliated person of an
affiliated person of a registered investment company of the assets of a bank
controlled by such registered investment company, held, to meet the standards
of Section 17 (b) of the Investment Company Act of 1940... Page 248

The purchase by an affiliated person of a registered investment company of its
preferred stock from such registered investment company pursuant to a call for
redemption of such stock, held, to meet the standards of Section 17 (b) of the
Investment Company Act of 1940 and ordered exempt from Section 17 (a) of the
Act... Page 569

Where an open-end investment company proposes to acquire all the assets of
a closed-end investment company, except cash equal to 2 percent of the net assets
of such closed-end company which is to be paid to the underwriter for the open-
end investment company as a fee for services in effecting the transaction, and out
of which the underwriter has agreed to pay the expenses of the transaction and of
the dissolution of the closed-end company estimated to be approximately one-
half of the fee, and where the open-end investment company proposes to issue
and deliver, in exchange for such assets, its shares of stock having a net asset
value equal to the value of the assets acquired by it, held that exemption from
the provisions of Section 17 (e) (1) of the Investment Company Act of 1940
to permit the payment of such fee to the underwriter, and from Section 22 (d)
of the Act, to permit the open-end investment company to issue its shares of
stock on the basis indicated above, is appropriate in the public interest and
consistent with the protection of investors and the purposes fairly intended by
the policy and provisions of the Act . . . Page 133

O