§ 79f. — Unlawful transactions by registered companies.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC79f]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2C--PUBLIC UTILITY HOLDING COMPANIES
Sec. 79f. Unlawful transactions by registered companies
(a) Issuing, selling, or altering rights of stockholders to declaration
Except in accordance with a declaration effective under section 79g
of this title and with the order under such section permitting such
declaration to become effective, it shall be unlawful for any registered
holding company or subsidiary company thereof, by use of the mails or
any means or instrumentality of interstate commerce, or otherwise,
directly or indirectly (1) to issue or sell any security of such
company; or (2) to exercise any privilege or right to alter the
priorities, preferences, voting power, or other rights of the holders of
an outstanding security of such company.
(b) Exemptions from operation of subsection (a)
The provisions of subsection (a) of this section shall not apply to
the issue, renewal, or guaranty by a registered holding company or
subsidiary company thereof of a note or draft (including the pledge of
any security as collateral therefor) if such note or draft (1) is not
part of a public offering, (2) matures or is renewed for not more than
nine months, exclusive of days of grace, after the date of such issue,
renewal, or guaranty thereof, and (3) aggregates (together with all
other then outstanding notes and drafts of a maturity of nine months or
less, exclusive of days of grace, as to which such company is primarily
or secondarily liable) not more than 5 per centum of the principal
amount and par value of the other securities of such company then
outstanding, or such greater per centum thereof as the Commission upon
application may by order authorize as necessary or appropriate in the
public interest or for the protection of investors or consumers. In the
case of securities having no principal amount or no par value, the value
for the purposes of this subsection shall be the fair market value as of
the date of issue. The Commission by rules and regulations or order,
subject to such terms and conditions as it deems appropriate in the
public interest or for the protection of investors or consumers, shall
exempt from the provisions of subsection (a) of this section the issue
or sale of any security by any subsidiary company of a registered
holding company, if the issue and sale of such security are solely for
the purpose of financing the business of such subsidiary company and
have been expressly authorized by the State commission of the State in
which such subsidiary company is organized and doing business, or if the
issue and sale of such security are solely for the purpose of financing
the business of such subsidiary company when such subsidiary company is
not a holding company, a public-utility company, an investment company,
or a fiscal or financing agency of a holding company, a public utility
company, or an investment company. The provisions of subsection (a) of
this section shall not apply to the issue, by a registered holding
company or subsidiary company thereof, of a security issued pursuant to
the terms of any security outstanding on January 1, 1935, giving the
holder of such outstanding security the right to convert such
outstanding security into another security of the same issuer or of
another person, or giving the right to subscribe to another security of
the same issuer or another issuer. Within ten days after any issue,
sale, renewal, or guaranty exempted from the application of subsection
(a) of this section by or under authority of this subsection, such
holding company or subsidiary company thereof shall file with the
Commission a certificate of notification in such form and setting forth
such of the information required in a declaration under section 79g of
this title as the Commission may by rules and regulations or order
prescribe as necessary or appropriate in the public interest or for the
protection of investors or consumers.
(c) Selling from house to house; causing officer or employer of
subsidiary to sell
It shall be unlawful, by use of the mails or any means or
instrumentality of interstate commerce, or otherwise, for any registered
holding company or any subsidiary company thereof, directly or
indirectly--
(1) to sell or offer for sale or to cause to be sold or offered
for sale, from house to house, any security of such holding company;
or
(2) to cause any officer or employee of any subsidiary company
of such holding company to sell or cause to be sold any security of
such holding company.
As used in this subsection the term ``house'' shall not include an
office used for business purposes.
(Aug. 26, 1935, ch. 687, title I, Sec. 6, 49 Stat. 814.)
Transfer of Functions
For transfer of functions of Securities and Exchange Commission,
with certain exceptions, to Chairman of such Commission, see Reorg. Plan
No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat.
1265, set out under section 78d of this title.
Section Referred to in Other Sections
This section is referred to in section 79g of this title.
