Prior to August 22, 1940, Section 8

Part VI ADMINISTRATION OF THE SECURITIES ACT OF 1933 1 The Securities Act of 1933 is designed to compel full and fair disclosure to investors of material facts regarding securities offered or sold in interstate commerce and through the mails, and to prevent fraud in such sales. Issuers of securities subject to the registration requirements of the Act must file registration statements with the Commission. These registration statements are'required to' con~ tain specified information about the issuer and the proposed offering and are available for public inspection. Issuers are also required .to furnish to prospective investors a prospectns showing the more essential information contained in the registration statement. STATUTORY AMENDMENT Prior to August 22, 1940, Section 8 (a) of the Secmities Act of 1933: provided that except in certain specified cases the effective date of the registration statement should be the twentieth day after its filing with the Commission.2 However, Section 8 (a) was amended on that date to give the Commission discretionary authority to accelcrate the effective date of the registration statement under certain circum stances. Specifically, the amended section now provides that the effective date of the registration statemcnt shall' be the twentieth' day after the filing thereOf or such earlier date as the Commission may determine, but requires the Commission to give due regard to the adequacy of information .concerning the issuer which has previously' been made available to the general public, the ease with which the nature of the securities to be registered, their relationship to the capital structure, of the i~suer, and the rights of the holders thereof can be undcrstood, and to the public interest and the protection of investors. Coincident with this significant amendment of the statute, the Commission anl10lllced that, pursuant to such dis-' cretionary authority, it will be its general policy to accelerate the effectiv.e date of regi,strati~w st,a~eJ1lCnts ,filed under the Securities Act of 1933 in accordance with the following procedure:' In determining the ditte Oil which a registration statement' shall become effective, the Commission will consider, having due regard to the public interest and the protection of investors, ---- I For information regarding the general scop~ of the Act, registration and examination procednres, see Sixth Annual Report of the Commission, pp. 117-11U, inclusive, as well as'previous annual reports, 'The filing of an amendment to a registration statement prior to the ~ffecti\'e dat~ has the effect of estab· lishing a new filing date and starting a new 20·day period running, However, the Commission is given the power under the Act to relate the filing of such an amendment back to the original filing date when such action is not detrimental to the public interest. ' An am~ndment filpd after the etTeetive date of the registra tion statement, becomes effective on such dllte as the Commission may determine, with dne regard to the public interest and the protection of the investor.' , , 161 162 SEVENTH ANNUAL REPORT (a) The adequacy of the disclosure and compliance with the requirements of the Act, and compliance withi.the applicable form and instruction hook' and rules pertaining thereto ~i" the time the registration statement is initially filed; (b) The advisability of permitting the acceleration of material amendments filed after the initial filing date; and (c) The character and date of information previously or concurrently filed under any Act administered by the Com mission or by any' other Federal agency or which is generally available to the public. In connection with the above-mentioned amendment, the Commis sion also announced that its examination of registration statements and amendments which have been preparcd With due regard to the matters set forth in (a) above, will ordinarily be completed within ,8. few days after the filing date. Accordingly, as soon as an appropriate amcndment correcting the deficiencies, if any, and an amendment setting forth the price (if the price and terms of offering were not originally ·included in the registration statement) are filed, the Com mh~sion will, subject to its statemcnt of general policy and the require ments of the Act, consent to the filing of the amendments and declare the statement e/fectiye as soon as practicable. At the same time, the Commission pointed out that the require ments of the Trust Indenture Act of 1939 have materially incrensed the examination work of its Registration Division with respect ,to ri.>gistration statements for securities to be issued under indentures which must be qualificd under that Act. Accordingly it was suggested tl~at it will further the effectuation of the Commission's announced geneml policy if drafts of such indentures are submitted in reasonably finnl form for consideration and dfscussion with tho staff as far as possible in advance of the actuul filing of the registration statement.' The Commission stated furthor that it, will be its policy to cooperate with rcgistrants in order that the effectiveness of registration state ments filcd under the Securities Act of 1933 may be expedited as much as possihle consistent with the public interest and the protection of . investors. EXPERIMENTAL DECENTRALIZATioN OF REGISTRATION FACILITIES As stated in its Sixth Annual Report 3 the Commission, on June 12 1940, announced the est.ablishment of an experimental unit in the San Francisco Regional Office for the purpose of assisting and advising prospective issucrs of securities nnd their representatives on any problems arising in connection with their registrntion statement.s filed under the Securities Act of 1933. This experiment convinced the I Page 183. PART VI--THE SECURITIES ACT OF 1933 163 Commission that much time can be saved and a good deal of difficulty avoided in this way. It was found that smaller issuers in particular availed themselves of this assistance. Because of the success of the experiment, the Commission extended this experimental registration service to its other regional offices. and assigned experts trained in registration technique to those offices. The extension of this servico became <'ffective on February 1, 1941. The Commission also und('rtook another experiment which, if proved successful, will constitute one of the most far reaching admin istrative changes ever undedaken by the Commission. Since Feb ruary 1, 1941, it has been conducting an experiment in order to deter mine the feasibility and advisability of decentralization, to the extent practicn.ble under the statute, of the administration of the registl'lltion provisions of the Securities Act of 1933. Registration units have been established in the regional offices at San Francisco and Cleveland and the rules and regulations have been amended to permit the filing of certain r.egistration statements in those offices.' _ These experiments will continue unt.il later in the year, when the Commission will consider whether they should be continued, expanded, or abandoned. Of the registration state~ents filed ,vith the Commission during the period from Februn.ry 1 to June 30, 1941, 26 registrants wero eligible to file their statements in the San Francisco R<'gionn.l Office, 13 by virtue of the location of their own principal executive offices and 13 because of that of a principal underwriter. Of these 26, 13 took advantage of the rules to file in that office. Only 1 of these was eligible solely on the basis of the location of the underwriter's offices. During the same period, 26 registrants were eligible to file in the Cleveland Regional Office, 20 qualifyin~ because of the location of their own offices and 6 because of that of one of their principal under':' writers. Ten of these elected to file in Cleveland, all of them being eligible because of the location of their own offices. Two of the 10 withdrew their" registration statements before they became effective. NEW R~LES, REGULATIONS, AND FORMS FOR REGISTRATION UNDER THE SECURITIES ACT Rules implementing decentralized registration facilities.-During the past fiscal year the Commission made necessary amendments of its rules. relating to registration procedure under the Securities Act of 1933 to provide complete facilities for "the registration of securities under that Act in the San Francisco and Cleveland Regional Offices. Under the new procedure, which is more fully discussed elsewhere in this report, if the principal executive offices of the registrn.nt or of a principal underwriter of the securit.ies being registered are "located in • Securities Act Release No. 2457. 164 SEVENTH AL'INUAL REPOR'l' the States of Ohio, Michigan, Indilma, or Kentucky, t.he registration statemen t may be )iled with the Cleveland Regional Office j and if such executive offices are located in the States of Califomia, Nevada, Arizona, Oregon, Washington, Idaho, or Montana, or the Territo~y of Hawaii, the registration state~ent may be filed with the San Fran cisco Regional Office. This new procedure, which is experimental, went into effect Feb ruary I, 1941, ·and will be continued until October I, 1941, at which time it will be reviewed by the Commission to determine in the light of its demonstrated practicability whether it should be extended to other regional offices or abandoned. Various appropriate amend ments of existing rules were made' to provide for the use 'of these regional registration .facilities.5 In addition, the Commission adopted anew rule (Rule 923) which p~ovides that registration statements which are to he filed with the principal office of the Commission in Washington, D. C., or any amendment to statements so filed, may be delivered, for forwarding to Washington, to the regional office of the Commission for the region in which the principal executive offices of the registrant, or of a principal underwritei' of the securities being registered, are located.

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