reserves for subsequent determination the question of whether the continued existence of such holding company would unnecessarily complicate the corporate structure of the holding company system so as to require that an order should be issued requiring such holding company to liquidate and dissolve... Page 944.

DISSOLUTION OF HOLDING COMPANY

Where after completion of divestments required under Section 11 (b) (1) registered holding company would retain only single electric operating company and incidental businesses thereto, held, continued existence of such holding company over single operating company would constitute unnecessary complexity in holding company system in violation of Section 11 (b) (2) and holding company ordered dissolved... Page 35.

PLAN FILED UNDER SECTION 11 (e) AS BAR TO ORDER UNDER SECTION 11 (b)

Where plan filed by registered holding company under Section 11 (e) fails to meet any of the holding company system's major problems under Section 11 (b), held, filing of such plan no bar to entry of order under Section 11 (b)... Page 35.

ENTRY OF SECTION 11 (b) (2) ORDER

Where facts and circumstances in record, in proceedings instituted by the Commission pursuant to Section 11 (b) (2) of the Act, show that the continued existence of a registered holding company serves no useful purpose, held, that the continued existence of such company constitutes an undue and unnecessary complexity in the holding company system and must be ordered terminated under Section 11 (b) (2) ... Page 339.

AMENDMENT OF SECTION 11 (e) PLAN

Where registered holding company filed plan under Section 11 (e) of the Holding Company Act which was approved by the Commission and ordered enforced by the District Court and thereafter company filed an amendment to the plan designed to permit stockholders to retain certain tax benefits without effecting any material changes in the plan previously approved and ordered enforced held, amendment of plan approved, subject to reservation of jurisdiction over certain transactions and matters... Page 630.

POWERS OF COMMISSION UNDER SECTION 11 (f)

Where registered holding company is subject of proceedings under Chapter X of Bankruptcy Act and the Commission, having approved plan of reorganization pursuant to Section 11 (f) of the Holding Company Act, is requested to issued order under Supplement R of Internal Revenue Code so as to make available tax benefits to stockholders of company in reorganization, held, the Commission's functions under Section 11 (f) are not merely advisory, as are its activities under Chapter X, and the Commission may issue order conforming to provisions of Supplement R... Page 880.

CONSUMMATION OF PLAN APPROVED UNDER SECTION 11 (e)

Where Commission approved plan filed by registered holding company under Section 11 (e) of the Holding Company Act providing, inter alia, for retirement of company's preferred stock, and company delays consummation of this provision of the plan on the grounds that pendency of certain review proceedings make such a step impractical, held, under all the circumstances and since review proceedings do not challenge this provision, further delay would not be justified and prompt consummation of the plan required... Page 645.

SOLICITATION OF PROXIES

Solicitation of proxies by a subsidiary of registered holding company, pursuant to Section 12 (e) of the Public Utility Holding Company Act of 1935 and Rule U-62 promulgated thereunder, with respect to obtaining (a) the consent of the subsidiary's existing preferred shareholders to issue additional shares of preferred stock when such issue is not permitted by the subsidiary's articles of incorporation unless the existing preferred shareholders' consent is first obtained, and (b) the consent, required by state law, of the subsidiary's preferred and common shareholders to increase the stated value of the subsidiary's no par value common stock, permitted to become effective, no adverse findings with respect thereto being necessary... Page 539.

A declaration, pursuant to Rule U-62 promulgated under the Act, regarding the solicitation of proxies with respect to a proposed merger of two utility companies and including a proposal for personal solicitation by regular employees of the merging companies for a limited period, permitted to become effective... Page 761.

INVESTMENT COMPANY ACT* OF 1940

EXEMPTIONS

EXEMPTIVE POWERS UNDER SECTION 6 (c)

The general exemptive power conferred upon the Commission by Section 6 (c) is not limited to transactions which are covered by some other specific exemption provision and gives the Commission jurisdiction to exempt from Section 17 (e) (1) the acceptance of compensation by an affiliated real estate agent of a registered investment company, notwithstanding the absence of a specific exemption provision in Section 17 (e) covering such situation... Page 10,

ACCEPTANCE OF COMPENSATION BY AFFILIATED PERSON ACTING AS AGENT

Where brokerage commission for sale of real estate of registered investment company by real estate broker who is affiliated person of affiliated person of such company represents compensation for services actually rendered in connection with a bona fide sale and is fair and reasonable in amount, and satisfies generally standards of Section 17 (b) which control exception of transactions involving affiliates acting as principals, exemption from Section 17 (e) (1) granted, pursuant to Section 6 (c), to permit acceptance of such commission by real estate broker... Page 10.

EXEMPTION FROM PROVISIONS OF SECTION 12 (d)

Where registered investment company acquired securities representing 50% of the voting stock of an insurance company in violation of Section 12 (d) of the Investment Company Act of 1940 but such acquisition was made in bona fide, though mistaken, belief that such acquisition was lawful, and investment company proposes to distribute securities acquired to its security holders and divest itself of control of insurance company, exemption of acquisition from provisions of Section 12 (d) granted... Page 133.

CONTROLLED COMPANIES

POWER TO EXERCISE A CONTROLLING INFLUENCE OVER MANAGEMENT Where an investment company holds 30.6 percent of the outstanding voting securities of a portfolio company and 65.3 percent is held by one family, and where the investment company has representatives on the portfolio company's board of directors and executive committee, has a veto power over certain actions of the portfolio company, and has demonstrated its influence in the portfolio company's affairs, held, that the investment company has not proved that it does not have the power to exercise a controlling influence over the management or policies of the portfolio company and has not rebutted the presumption of control created by Section 2 (a) (9) of the Investment Company Act of 1940... Page 463.

Where an investment company holds 31.44 percent of the voting power of a portfolio company whose voting securities are widely distributed, has representatives on the portfolio comapny's board of directors and executive committee, and has a veto power over certain actions of the portfolio company, held, that the investment company has not proved that it does not have the power to exercise a controlling influence over the management or policies of the portfolio company and has not rebutted the presumption of control created by Section 2 (a) (9) of the Investment Company Act of 1940... Page 463.

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

28 S. E. C.

TRANSACTIONS BETWEEN AFFILIATED PERSONS

In the absence of an order of exemption pursuant to Section 6 (c), Section 17 (e) (1) prohibits an affiliated real estate broker of a registered investment company from receiving a sales commission for the sale of the company's real estate, the exception in Section 17 (e) (1) with respect to a person acting in the regular course of his business as a broker being limited to a securities broker and not including a real estate broker... Page 10.

U. S. GOVERNMENT PRINTING OFFICE: 1955 O 3029 72