53 STAT.] 76TH CONG. , 1ST SESS.-CH. 411 -AUG. 3 , 1939 such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evi- dence an obligation to repay moneys lent to a person by one or more banks, trust companies, or banking firms, or any certificate of inter- est or participation in any such note or evidence of indebtedness; (B) an obligation shall be deemed to be in default when a default in payment of principal shall have continued for thirty days or more, and shall not have been cured; and (C) the indenture trustee shall not be deemed the owner or holder of (i) any security which it holds as collateral security (as trustee or otherwise) for an obligation which is not in default as above defined, or (ii) any security which it holds as collateral security under the indenture to be qualified, irrespective of any default thereunder, or (iii) any security which it holds as agent for collection, or as custodian, escrow agent, or depositary, or in any similar representative capacity. "For the purposes of this subsection, the term 'underwriter' when used with reference to an obligor upon the indenture securities means every person who, within three years prior to the time as of which the determination is made, was an underwriter of any security of such obligor outstanding at such time. "Applicability of Section "(c) The Public Utility Holding Company Act of 1935 shall not be held to establish or authorize the establishment of any standards regarding the eligibility and qualifications of any trustee or prospec- tive trustee under an indenture to be qualified under this title, or regarding the provisions to be included in any such indenture with respect to the eligibility and qualifications of the trustee thereunder, other than those established by the provisions of this section. " PR E FE RE NT IAL COLLECTION OF CLAIMS AGAINST OBLIGOR "SEc. 311. (a) Subject to the provisions of subsection (b) of this section, the indenture to be qualified shall provide that if the inden- ture trustee shall be, or shall become, a creditor, directly or indirectly, secured or unsecured, of an obligor upon the indenture securities, within four months prior to a default as defined in the last paragraph of this subsection, or subsequent to such a default, then, unless and until such default shall be cured, such trustee shall set apart and hold in a special account for the benefit of the trustee individually and the indenture security holders- "(1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such four months' period and valid as against such obligor and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in paragraph (2) of this subsection, or from the exercise of any right of set-off which the trustee could have exercised if a petition in bankruptcy had been filed by or against such obligor upon the date of such default; and "(2) all property received in respect of any claim as such creditor, either as security therefor, or in satisfaction or com- position thereof, or otherwise, after the beginning of such four months' period, or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of such obligor and its other creditors in such property or such proceeds. When obligation deemed to be in de- fault. Trustee not owner of collateral security it holds. "Underwriter" de- fined. Standards for eligi- bility, etc., of trustees, applicability of sec- tion. 49 Stat. 803 . 15 U. 8. C., Supp. IV, §§ 79-79z-6. Trustee as creditor of obligor. Special account for Individual benefit of trustee, etc. 1161
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