as to dividends, the deduction shall be 20%;

(iii) on all other securities, the deduction shall be 30%;

Provided, however, That such deduction need not be made in the case of. (i) a security which is convertible into or exchangeable for other securities within a period of 30 days, subject to no conditions other than the payment of money, and the other securities into which such security is convertible, or for which it is exchangeable, are short in the accounts of such broker or dealer or partner, or (ii) a security which has been called for redemption and which is redeemable within 90 days.

(D) deducting 30% of the market value of all "long" and all "short" future commodity contracts (other than those contracts representing spreads or straddles in the same commodity and those contracts offsetting or hedging any "spot" commodity positions) carried in the capital, proprietary or other accounts of the broker or dealer and, if such broker or dealer is a partnership, in the accounts of partners as hereinafter defined;

(E) deducting, in the case of a broker or dealer who has open contractual commitments, the respective percentages specified in subparagraph (C) above of the value (which shall be the market value whenever there is a market) of each net long and each net short position contemplated by any existing contractual commitment in the capital, proprietary and other accounts of the broker or dealer and, if such broker or dealer is a partnership, in accounts of partners, as hereinafter defined; Provided, however, That this deduction shall not apply to exempted securities, and that the deduction with respect to any individual commitment shall be reduced by the unrealized profit, in an amount not greater than the percentage deduction provided for in subparagraph (C), (or increased by the unrealized loss) in such commitment; and that in no event shall an unrealized profit on any closed transactions operate to increase net capital;

(F) excluding liabilities of the broker or dealer which are subordinated to the claims of general creditors pursuant to a satisfactory subordination agreement as herein defined; and

(G) deducting, in the case of a broker or dealer who is a sole proprietor, the excess of (i) liabilities which have not been incurred in the course of

business as a broker or dealer over (ii) assets not used in the business.

(3) The term "exempted securities" shall mean those securities specifically defined as exempted securities in section 3 (a) of the Act;

(4) the term "accounts of partners", where the broker or dealer is a partnership, shall mean accounts of partners who have agreed in writing that the equity in such accounts maintained with such partnership shall be included as partnership property;

(5) the term "contractual commitments" shall include underwriting, when-issued, when-distributed and delayed delivery contracts, endorsement of puts and calls, commitments in foreign currencies, and spot (cash) commodities contracts, but shall not include uncleared regular way purchases and sales of securities and contracts in commodities futures; a series of contracts of purchase or sale of the same security conditioned, if at all, only upon issuance may be treated as an individual commitment;

(6) indebtedness shall be deemed to be "adequately collateralized" within the meaning of this rule, when the difference between the amount of the indebtedness and the market value of the collateral is sufficient to make the loan acceptable as a fully secured loan to banks regularly making comparable loans to brokers or dealers in the community;

(7) the term "satisfactory subordination agreement" shall mean a written agreement between the broker or dealer and a lender, which agreement is binding and enforceable in accordance with its terms upon the lender, his creditors, heirs, executors, administrators, and assigns, and which agreement satisfies all of the following conditions:

(A) it effectively subordinates any right of the lender to demand or receive payment or return of the cash or securities loaned to the claims of all present and future general creditors of the broker or dealer;

(B) it is not subject to cancellation at the will of either party and is for a term of not less than one year;

(C) it provides that it shall not be terminated, rescinded or modified by mutual consent or otherwise, if the effect thereof would be to make the

agreement inconsistent with the conditions of this rule, or to reduce the net capital of the broker or dealer below the amount required by this rule;

(D) it provides that no default in the payment of interest or in the performance of any other covenant or condition by the broker or dealer shall have the effect of accelerating the maturity of the indebtedness;

(E) it provides that any notes or other written instruments evidencing the indebtedness shall bear on their face an appropriate legend stating that such notes or instruments are issued subject to the provisions of a subordination agreement which

shall be adequately referred to and incorporated by reference;

(F) it provides that any securities or other property loaned to the broker or dealer pursuant to its provisions may be used and dealt with by the broker or dealer as part of his capital and shall be subject to the risks of the business.

(8) the term "customer" shall mean every person except the broker or dealer; Provided, however, That partners who maintain "accounts of partners" as herein defined shall not be deemed to be customers insofar as such accounts are concerned.

Rule 15d-1. Requirements of Annual Reports. Every registrant under the Securities Act of 1933 which is currently required to file supplementary and periodic information, documents and reports pursuant to section 15 (d) of the Securities Exchange Act of 1934 shall file an annual report for each fiscal year after the last full fiscal year for which certified financial statements were contained in its registration statement at the time such statement became effective. The report shall be filed within 120 days after the close of the fiscal year or within such other periods as may be specified in the appropriate annual report form. Rule 15d-2. Special Financial Report.

(a) If the registration statement of any issuer subject to Rule 15d-1 contained uncertified financial statements for the most recent full fiscal year for which financial statements were included therein, the registrant shall, within 120 days after the effective date of the registration statement, file

a special report furnishing certified financial statements for such most recent fiscal year meeting the requirements of the form appropriate for annual reports of the registrant.

(b) The report shall be filed under cover of the facing sheet of the form appropriate for annual reports of the registrant, shall indicate on the facing sheet that it contains only financial statements for the fiscal year in question, and shall be signed in accordance with the requirements of the annual report form.

Rule 15d-3. Reports in Case of New Registration.

(a) Notwithstanding the provisions of Rule 15d-1, any registrant which has filed a registration statement under the Securities Act of 1933, within the period prescribed for filing an annual report pursuant to Rule 15d-1, may incorporate the registration statement by reference in its annual report in lieu of furnishing the information

and documents otherwise called for by the appropriate annual report form, if the registration statement

(1) has become effective and is not subject to any proceeding under section 8 (d) of the Securities Act of 1933, or to an order entered thereunder; and

(2) covers the fiscal period that would be covered by a report on the appropriate annual report form and contains all of the information, including financial statements and exhibits, required by the appropriate annual report form.

(b) Any registrant which would be entitled to file an annual report in accordance with this rule except for the fact that the registration statement does not contain financial statements meeting the requirements of the appropriate annual report

form, may nevertheless avail itself of the provisions of this rule if financial statements meeting the requirements of the appropriate annual report form are otherwise filed as a part of the report.

Rule 15d-4. Incorporation of Information Contained in a Prospectus.

Any registrant which has filed with the Commission pursuant to Rule 424 under the Securities Act of 1933 copies of a prospectus meeting the requirements of section 10 of that Act after the effective date of the registration statement may incorporate in its annual report pursuant to Rule 15d-1 any information, including financial statements, contained in the prospectus, provided a copy of the prospectus is filed as an exhibit to the annual report.

Rule 15d-10. Interim Reports.

(a) Every issuer which changes its fiscal closing date after the last fiscal year for which certified financial statements were filed in its registration statement shall file a report covering the resulting interim period not more than 120 days after the close of the interim period or after the date of the determination to change the fiscal closing date, whichever is later.

(b) A report pursuant to this rule shall be filed on the form appropriate for annual reports of the issuer and shall clearly indicate the period covered. If the report covers an interim period of less than 6 months, the financial statements filed therewith need not be certified but, if they are not certified, the issuer shall file with its next annual report certified financial statements covering the interim period.

(c) Notwithstanding the foregoing, a separate report need not be filed for any period of less than 3 months if the annual report of the issuer for either its preceding or succeeding fiscal year covers the interim period as well as the fiscal year. In such case balance sheets need be furnished only as of the close of the entire period but all other financial statements, including balance sheets schedules, shall be filed separately for both the fiscal year and the interim period.

Rule 15d-11. Current Reports on Form 8-K.

(a) Except as provided in paragraph (b), every registrant subject to Rule 15d-1 shall file a current report on Form 8-K within ten days after the close of any month during which any of the events specified in that form occurs, unless substantially the same information as that required by Form 8-K has been previously reported by the registrant.

(b) This rule shall not apply to foreign governments or political subdivisions thereof; foreign private issuers other than Canadian, Cuban, Mexican or Philippine issuers; issuers of American certificates against foreign issues; or to investment companies required to file quarterly reports pursuant to Rule 15d-12.

Rule 15d-12. Quarterly Reports of Investment Companies.

Every investment company registered under the Investment Company Act of 1940 which is subject to Rule 15d-1 and for which a quarterly form is prescribed shall file a quarterly report, on the appropriate form prescribed therefor, for each fiscal quarter for which it is required to file a quarterly report pursuant to section 30 (b) (1) of the Investment Company Act of 1940.

Rule 15d-13. Semi-Annual Reports on Form 9-K.

(a) Every issuer which, by reason of an undertaking contained in a registration statement under the Securities Act of 1933, is required to file annual reports on Form 10-K or Form U5S shall file a semi-annual report on Form 9-K for the first half of each fiscal year ending after the close of the latest fiscal year for which financial statements of such issuer were filed in a registration statement under the Securities Act of 1933: Provided, however, That no such report need be filed for any semi-annual period ending prior to June 30, 1955.

(b) Such reports on Form 9-K shall be filed not more than 45 days after the end of the sixmonth period for which they are filed. However, the report for any period ending prior to the effective date of the registration statement, unless the issuer was subject to this rule prior to such date, may be filed not more than 45 days after the effective date of the registration statement.

(c) Notwithstanding paragraph (a) of this rule, semi-annual reports on Form 9-K shall not be required to be filed by the following types of issuers:

(1) banks and bank holding companies;
(2) investment companies;

(3) insurance companies, other than title insurance;

(4) public utilities and common carriers which file financial reports with the Federal Power Commission, Federal Communications Commission or the Interstate Commerce Commission;

(5) companies engaged in the seasonal production and seasonal sale of a single-crop agricultural commodity;

(6) companies in the promotional or development stage to which paragraph (b) or (c) of Rule 5A-01 of Article 5A of Regulation S-X is applicable;

(7) foreign issuers other than private issuers domiciled in a North American country or Cuba. (d) Notwithstanding the foregoing paragraphs of this rule, reports pursuant to this rule on Form 9-K shall not be deemed to be "filed" for the purpose of section 18 of the Act or otherwise subject to the liabilities of that section, but shall be subject to all other provisions of the Act.

Rule 15d-14. Reports by Canadian Banks.

(a) Any bank existing under the laws of the Dominion of Canada and subject to the Bank Act of Canada may file as its annual report pursuant to Rule 15d-1 the information and documents which such bank is required by section 53 of such Act or any section superseding such section, to furnish to its stockholders. Such information and documents, if not in the English language, shall be accompanied by an English translation, shall be filed under cover of the facing sheet of Form 10-K, and shall be accompanied by the signatures required by that form. Such annual report shall be filed with the Commission not later than the expiration of the period specified in the Act within which such information and documents are required to be sent to stockholders.

(b) Any such bank filing annual reports pursuant to this rule need not file current reports pursuant to Rule 15d-11 or quarterly reports pursuant to Rule 15d-13.

Rule 15d-15. Quarterly Reports of Certain Real Estate Companies.

(a) Except as provided in paragraph (b), every issuer which, by reason of an undertaking contained in a registration statement under the Securities Act of 1933, is required to file periodic information, documents and reports pursuant to section 15 (d) of the Securities Exchange Act of 1934, and (i) which is a real estate investment trust, as defined in section 856 of the Internal Revenue Code, or (ii) whose business is primarily that of acquiring and holding for investment real estate or interests in real estate or interests in other issuers whose business is primarily that of acquiring and holding real estate or interests in real estate for investment, shall file a report on Form 7-K for each fiscal quarter ending on or after June 1, 1962, or the date on which such registration statement becomes effective, whichever date is later. Such reports shall be filed not more than 45 days after the end of the fiscal quarter for which they are filed.

(b) Notwithstanding paragraph (a), no report needed be filed pursuant to this rule with respect

to

(1) any investment company registered under the Investment Company Act of 1940; or,

(2) any partnership all of whose properties are under long term lease to other persons.

(c) Notwithstanding Rule 15d-13, any issuer which files quarterly reports pursuant to this rule for the first two fiscal quarters of any fiscal year need not file a semiannual report on Form 9-K for the period covered by such quarterly reports. Rule 15d-20. Exemption of Closely Held Issuers from Reporting Requirements.

(a) The Commission may, upon application and subject to appropriate terms and conditions, exempt an issuer from the operation of section 15 (d) of the Act with respect to the duty to file any reports required by that section and the rules and regulations thereunder if the Commission finds that

(1) All of the outstanding securities of such issuer are held of record and the number of such record holders does not exceed 50 persons; and.

(2) The filing of such reports by such issuer is not necessary in the public interest or for the protection of investors.

(b) Notice of the filing of an application pursuant to this rule will be published in the Federal Register. Such notice will indicate the earliest. date upon which an order disposing of the matter may be issued and will also provide that any interested person may, within a period of time specified in the notice, request a hearing on the matter or submit to the Commission in writing any facts bearing upon the desirability of such a hearing.

(c) The Commission will order a hearing on the matter upon its own notice, or upon the request of any interested person, if it appears that a hearing is necessary or appropriate in the public interest or for the protection of investors. Any request by an interested person for a hearing shall state the reasons therefor and the nature of the person's interest in the matter. An order disposing of the matter will be issued as a matter of course unless prior to the date specified in the notice the Commission orders a hearing on the matter. If the Commission orders a hearing on the matter, all further procedure with respect thereto will be conducted in accordance with the Commission's Rules of Practice.

(d) Any exemption granted pursuant to this rule shall continue only so long as (i) all of the outstanding securities of the issuer are held of record and the number of such record holders does

not exceed 50 persons, and (ii) the issuer shall comply with all of the terms and conditions upon which the exemption was granted. In addition, the Commission may at any time, after notice and opportunity for hearing, issue an order terminating the exemption if the Commission finds such termination necessary or appropriate in the public interest or for the protection of investors.

(e) For the purposes of this rule, securities held of record by a corporation, partnership, trust or other organization shall be deemed to be so held by one person; provided, that (i) securities held subject to a voting trust or similar arrangement shall be deemed to be held of record by the record holders of the voting trust certificates or similar certificates of interest in such securities; (ii) securities held of record by any investment company subject to the Investment Company Act of 1940 shall be deemed to be held of record by the security holders of such investment company; and (iii) securities held of record by a bank, broker or dealer or by any person acting on behalf of such bank, broker or dealer, as nominee for other persons shall be deemed to be held of record by such other persons. Notes, drafts, bills of exchange and bankers' acceptances, issued in the ordinary course of business, all of which are held by banks or other institutional investors (other than investment companies subject to the Investment Company Act of 1940) for their own account may be disregarded for the purposes of this rule.

Rule 15d-21. Reports for employee Stock Purchase, Savings and Similar Plans.

(a) Separate annual and other reports need not be filed pursuant to section 15 (d) of the Act with respect to any employee stock purchase, savings or similar plan, provided—

(1) the issuer of the stock or other securities offered to employees through their participation in the plan files annual reports on Form 10-K or U5S;

(2) such issuer furnishes, as a part of its annual report on such form or as an amendment thereto, the information, financial statements and exhibits required by Form 11-K with respect to the plan; and

(3) such issuer furnishes to the Commission copies of any annual reports to employees in ac