15 U.S.C. § 77aaa — Short title

Page 176 TITLE 15—COMMERCE AND TRADE § 77ff tion, vindication, and preservation or reserva- tion of the rights and interests of holders of foreign securities either on any default in or on breach or contemplated breach of the con- ditions on which such foreign securities may have been issued, or otherwise; obtain for such holders such legal and other assistance and ad- vice as the board of directors may deem expe- dient; and do all such other things as are inci- dent or conducive to the attainment of the above objects. (May 27, 1933, ch. 38, title II, § 204, 48 Stat. 94.) § 77ff. Accounts and annual balance sheet of Cor- poration; audits The board of directors shall cause accounts to be kept of all matters relating to or connected with the transactions and business of the Cor- poration, and cause a general account and bal- ance sheet of the Corporation to be made out in each year, and cause all accounts to be audited by one or more auditors who shall examine the same and report thereon to the board of direc- tors. (May 27, 1933, ch. 38, title II, § 205, 48 Stat. 94.) § 77gg. Annual report by Corporation; printing and distribution The Corporation shall make, print, and make public an annual report of its operations during each year, send a copy thereof, together with a copy of the account and balance sheet and audi- tor’s report, to the Commission and to both Houses of Congress, and provide one copy of such report but not more than one on the application of any person and on receipt of a sum not ex- ceeding $1: Provided, That the board of directors in its discretion may distribute copies gratu- itously. (May 27, 1933, ch. 38, title II, § 206, 48 Stat. 95.) § 77hh. Assessments by Corporation on holders of foreign securities The Corporation may in its discretion levy charges, assessed on a pro rata basis, on the holders of foreign securities deposited with it: Provided, That any charge levied at the time of depositing securities with the Corporation shall not exceed one fifth of 1 per centum of the face value of such securities: Provided further, That any additional charges shall bear a close rela- tionship to the cost of operations and negotia- tions including those enumerated in sections 77dd and 77ee of this title and shall not exceed 1 per centum of the face value of such securities. (May 27, 1933, ch. 38, title II, § 207, 48 Stat. 95.) § 77ii. Subscriptions accepted by Corporation as loans; repayment The Corporation may receive subscriptions from any person, foundation with a public pur- pose, or agency of the United States Govern- ment, and such subscriptions may, in the discre- tion of the board of directors, be treated as loans repayable when and as the board of direc- tors shall determine. (May 27, 1933, ch. 38, title II, § 208, 48 Stat. 95.) § 77jj. Loans to Corporation from Reconstruction Finance Corporation authorized The Reconstruction Finance Corporation is authorized to loan out of its funds not to exceed $75,000 for the use of the Corporation. (May 27, 1933, ch. 38, title II, § 209, 48 Stat. 95.) Executive Documents ABOLITION OF RECONSTRUCTION FINANCE CORPORATION Section 6(a) of Reorg. Plan No. 1 of 1957, eff. June 30, 1957, 22 F.R. 4633, 71 Stat. 647, set out as a note under section 601 of this title, abolished the Reconstruction Finance Corporation. § 77kk. Representations by Corporation as acting for Department of State or United States for- bidden; interference with foreign negotia- tions forbidden Notwithstanding the foregoing provisions of this subchapter, it shall be unlawful for, and nothing in this subchapter shall be taken or con- strued as permitting or authorizing, the Cor- poration in this subchapter created, or any com- mittee of said Corporation, or any person or per- sons acting for or representing or purporting to represent it— (a) to claim or assert or pretend to be acting for or to represent the Department of State or the United States Government; (b) to make any statements or representa- tions of any kind to any foreign government or its officials or the officials of any political subdivision of any foreign government that said Corporation or any committee thereof or any individual or individuals connected there- with were speaking or acting for the said De- partment of State or the United States Gov- ernment; or (c) to do any act directly or indirectly which would interfere with or obstruct or hinder or which might be calculated to obstruct, hinder, or interfere with the policy or policies of the said Department of State or the Government of the United States or any pending or con- templated diplomatic negotiations, arrange- ments, business or exchanges between the Government of the United States or said De- partment of State and any foreign government or any political subdivision thereof. (May 27, 1933, ch. 38, title II, § 210, 48 Stat. 95.) § 77ll. Effective date of subchapter This subchapter shall not take effect until the President finds that its taking effect is in the public interest and by proclamation so declares. (May 27, 1933, ch. 38, title II, § 211, 48 Stat. 95.) § 77mm. Short title This subchapter may be cited as the ‘‘Corpora- tion of Foreign Bondholders Act, 1933.’’ (May 27, 1933, ch. 38, title II, § 212, 48 Stat. 95.) SUBCHAPTER III—TRUST INDENTURES § 77aaa. Short title This subchapter may be cited as the ‘‘Trust In- denture Act of 1939.’’ Page 177 TITLE 15—COMMERCE AND TRADE § 77ccc (May 27, 1933, ch. 38, title III, § 301, as added Aug. 3, 1939, ch. 411, 53 Stat. 1149.) Statutory Notes and Related Subsidiaries SHORT TITLE OF 1990 AMENDMENT Pub. L. 101–550, title IV, § 401, Nov. 15, 1990, 104 Stat. 2721, provided that: ‘‘This title [amending sections 77ccc to 77eee, 77iii to 77rrr, and 77vvv of this title] may be cited as the ‘Trust Indenture Reform Act of 1990’.’’ § 77bbb. Necessity for regulation (a) Practices adversely affecting public Upon the basis of facts disclosed by the reports of the Securities and Exchange Commission made to the Congress pursuant to section 78jj of this title and otherwise disclosed and ascertained, it is hereby declared that the na- tional public interest and the interest of inves- tors in notes, bonds, debentures, evidences of in- debtedness, and certificates of interest or par- ticipation therein, which are offered to the pub- lic, are adversely affected— (1) when the obligor fails to provide a trust- ee to protect and enforce the rights and to rep- resent the interests of such investors, notwith- standing the fact that (A) individual action by such investors for the purpose of protecting and enforcing their rights is rendered imprac- ticable by reason of the disproportionate ex- pense of taking such action, and (B) concerted action by such investors in their common in- terest through representatives of their own se- lection is impeded by reason of the wide dis- persion of such investors through many States, and by reason of the fact that informa- tion as to the names and addresses of such in- vestors generally is not available to such in- vestors; (2) when the trustee does not have adequate rights and powers, or adequate duties and re- sponsibilities, in connection with matters re- lating to the protection and enforcement of the rights of such investors; when, notwith- standing the obstacles to concerted action by such investors, and the general and reasonable assumption by such investors that the trustee is under an affirmative duty to take action for the protection and enforcement of their rights, trust indentures (A) generally provide that the trustee shall be under no duty to take any such action, even in the event of default, unless it receives notice of default, demand for action, and indemnity, from the holders of substantial percentages of the securities out- standing thereunder, and (B) generally relieve the trustee from liability even for its own neg- ligent action or failure to act; (3) when the trustee does not have resources commensurate with its responsibilities, or has any relationship to or connection with the ob- ligor or any underwriter of any securities of the obligor, or holds, beneficially or otherwise, any interest in the obligor or any such under- writer, which relationship, connection, or in- terest involves a material conflict with the in- terests of such investors; (4) when the obligor is not obligated to fur- nish to the trustee under the indenture and to such investors adequate current information as to its financial condition, and as to the per- formance of its obligations with respect to the securities outstanding under such indenture; or when the communication of such informa- tion to such investors is impeded by the fact that information as to the names and address- es of such investors generally is not available to the trustee and to such investors; (5) when the indenture contains provisions which are misleading or deceptive, or when full and fair disclosure is not made to prospec- tive investors of the effect of important inden- ture provisions; or (6) when, by reason of the fact that trust in- dentures are commonly prepared by the obli- gor or underwriter in advance of the public of- fering of the securities to be issued there- under, such investors are unable to participate in the preparation thereof, and, by reason of their lack of understanding of the situation, such investors would in any event be unable to procure the correction of the defects enumer- ated in this subsection. (b) Declaration of policy Practices of the character above enumerated have existed to such an extent that, unless regu- lated, the public offering of notes, bonds, deben- tures, evidences of indebtedness, and certificates of interest or participation therein, by the use of means and instruments of transportation and communication in interstate commerce and of the mails, is injurious to the capital markets, to investors, and to the general public; and it is hereby declared to be the policy of this sub- chapter, in accordance with which policy all the provisions of this subchapter shall be inter- preted, to meet the problems and eliminate the practices, enumerated in this section, connected with such public offerings. (May 27, 1933, ch. 38, title III, § 302, as added Aug. 3, 1939, ch. 411, 53 Stat. 1150.) Editorial Notes REFERENCES IN TEXT Section 78jj of this title, referred to in subsec. (a), was omitted from the Code. Executive Documents 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, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title. § 77ccc. Definitions When used in this subchapter, unless the con- text otherwise requires— (1) Any term defined in section 2 of the Secu- rities Act of 1933 [15 U.S.C. 77b], and not other- wise defined in this section shall have the meaning assigned to such term in such section 2 [15 U.S.C. 77b]. (2) The terms ‘‘sale’’, ‘‘sell’’, ‘‘offer to sell’’, ‘‘offer for sale’’, and ‘‘offer’’ shall include all transactions included in such terms as pro- vided in paragraph (3) of section 2(a) of the Se- curities Act of 1933 [15 U.S.C. 77b(a)], except that an offer or sale of a certificate of interest