816
74TH CON GRE SS . SESS. I. CH. 687 . AUGUST 26, 1935 . Req uireme nts- Continued . Ante, p.815;Post,p. 8 17. Post, p. 817. security of the declarant ; (B) a bond (i) secured by a first lien on physical property of the declarant, or (ii) secured by an obliga- tion of a subsidiary company of th e declarant secured by a first lien on physical property of such subsidiary company, or (iii) secured by any other assets of the type and character which the Commission by rules and regulations or order may prescribe as appropriate in the public interest or for the protection of inves- tors ; (C) a guaranty of, or assumption of liability on, a security of another company ; or (D) a receiver's or trustee's certificate duly authorized by the appropriate court or courts ; or (2) such security is to be issued or sold solely (A) for the pur- pose of refunding, extending, exch anging, or discharging an out- standing security of the declarant and/or a predecessor company thereof or for the purpose of effecting a merger, consolidation, or other reorganization ; (B) for the purpose of financing the business of the declarant as a public-utility company ; (C) for the purpose of financing the business of the declarant, when the declarant is neither a holding company nor a public-utility company ; and/or (D) for necessary and urgent corporate purposes of the declar ant where the requirements of the .prov ision s of parag raph (1) w ould impose an unreasonable financial burden upon the declarant and are not necessary or appropriate in the public interest or for the protection of investors or consumers ; or (3) such security is one the issuance of which was authorized by the company prior to January 1, 1935, and which the Commission by rules and regulations or order authorizes as necessary or appro- priate in the public interest or for the protection of investors or consu mers . (d) If the requirements of subsections (c) and (g) are satisfied, the Commission shall permit a declaration regarding the issue or sale of a security to bec ome effective unless the Commission finds that- (1) the security is not reasonably adapted to the security struc- ture of the declarant and other companies in the same holding- company system ; (2) the security is not reasonably adapted to the earning power of the declarant • (3) financing by the issue and sale of the particular security is not necessary or appropriate to the economical and efficient opera- tion of a business in which the ap plicant lawfully is engaged or has an interest ; (4) the fees, commissions, or other remuneration, to whomsoever paid, directly or indirectly, in connection with the issue, sale, or distribution of the security are not reasonable ; (5) in the case of a security that is a guaranty of, or assumption of liability on, a security of another company, the circumstances are such as to constitute the making of such guaranty or the assumption of such liability an improper risk for the declarant ; or (6) the terms and conditions of the issue or sale of the security are detrimental to the public interest or the interest of investors or consumers . (e) If the requirements of subsection (g) are satisfied, the Com- mission shall permit a declaration to become effective regarding the exercise of a privilege or right to alter the priorities, preferences, voting power, or other rights of the holders of an outstanding security unless the Commission finds that such exercise of such privil ege or rig ht will re sult in an unfair or inequitab le distrib ution of voting power among holders of the securities of the declarant or is otherwise detrimental to the public interest or the interest of inv estor s or consu mers .
