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 any amount not greater than the 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) Deducting an amount equal to 12 percent of the market values of the total long or total short futures contracts in each commodity, whichever is greater, carried for all customers;

(G) Excluding liabilities of the broker or dealer which are subordinated to the claims of general creditors pursuant to a satisfactory subordination agreement, as hereinafter defined; and (H) Deducting, in the case of a broker or dealer who is a sole proprietor, the excess of (1) liabilities which have not been incurred in the course of business as a broker or dealer over (2) assets not used in the business.

(I) Deducting 10 percent of the contract price of each item in the securities failed to deliver account which is outstanding 40 to 49 calendar days; deducting 20 percent of the contract price of each item in the securities failed to deliver account which is outstanding 50 to 59 calendar days; and deducting 30 percent of the contract price of each item in the securities failed to deliver account which is outstanding 60 or more calendar days.

(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, endorsements of puts and calls, commitments in foreign currencies, and spot (cash) commodities contracts, but shall not include uncleared regular way pur

chases 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 duly executed by the broker or dealer and the 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 creditors of the broker or dealer;

(B) The cash or securities are loaned for a term of not less than 1 year;

(C) It provides that the agreement shall not be subject to cancellation by either party, and that the loan shall not be repaid and the agreement 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 covenant or condition by the broker or dealer shall have the effect of accelerating the maturity of the indebted

ness;

(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; and

(G) Two copies of such agreement, and of any notes or written instruments evidencing the indebtedness, are filed, within 10 days after such agreement is entered into, with the Regional Office of the Commission for the region in which the broker or dealer maintains his principal place of business, together with a statement of the full name and address of the lender, the business relationship of the lender to the broker or dealer, and whether the broker or dealer carried funds or securities for the lender at or about the time the agreement was entered into. If each copy of such agreement is bound separately and clearly marked "Non-Public" such agreements shall be maintained in a nonpublic file: Provided, however, That they shall be available, for official use, to any official or employee of the United States or any state; to any national securities exchange and any registered national securities association of which the broker or dealer filing such agreements is a member; and to any other person to whom the Commission authorizes disclosure in the public interest.

(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.

(New title and amended paras. (a), (b) and (c) May 26, eff. July 1, 1965, except para. (a) eff. Dec. 1, 1965, and para. (b)(1) eff. Sept. 1, 1965, Release 34-7611; amended subparas. (C) and (E) of para. (c) (2) June 19, 1968, Release 34-8337, eff. Aug. 1, 1968; amended para. (b)(2), adopted subpara. (I) to para. (c) (2) Jan. 30, eff. Mar. 6, 1969, Release 34-8508.)

Rule 15c3-2. Customers' Free Credit Balances No broker or dealer shall use any funds arising out of any free credit balance carried for the account of any customer in connection with the operation of the business of such broker or dealer unless such broker or dealer has established adequate procedures pursuant to which each customer for whom a free credit balance is carried will be given or sent, together with or as a part of the customer's statement of account, whenever sent but not less frequently than once every 3 months, a written statement informing such customer of the amount due to the customer by such broker or dealer on the date of such statement, and containing a written notice that (i) such funds are not segregated and may be used in the operation of the business of such broker or dealer, and (ii) such funds are payable on the demand of the customer: Provided, however, That this rule shall not apply to a broker or dealer which is also a banking institution supervised and examined by state or Federal authority having supervision over banks. For the purpose of this rule the term "customer" shall mean every person other than a broker or dealer.

(Adopted May 27, eff. Aug. 3, 1964, Release 34-7325.)

Rule 15d-1. Requirements of Annual Reports Every registrant under the Securities Act of 1933 which is subject 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 under that Act 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 period as may be specified in the appropriate annual report form.

(Amended Feb. 5, eff. Mar. 8, 1965, Release 34-7525.)

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 10 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 regis

trant.

(b) This rule shall not apply to foreign governments, foreign private issuers required to make reports on Form 6-K pursuant to Rule 15d-16, issuers of American depositary receipts for securities of any foreign issuer, or investment companies required to file quarterly reports pursuant to Rule 15d-12.

(Amended para. (b), Apr. 28, Release 34-8066, eff. May 31, 1967.)

Rule 15d-12. Quarterly Reports of Investment Companies

Every investment company registered under the Investment Company Act of 1940 which is sub

ject 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 quarter for which it is required to file a quarterly report pursuant to section 30 (b) (1) of the Investment Company Act of 1940.

(Amended Dec. 6, Release 34-8201, eff. Dec. 31, 1967.)

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

(a) Every issuer which is required by Rule 15d-1 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.

(b) Such reports on Form 9-K shall be filed not more than 45 days after the end of the 6month 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

(1) Any investment company registered under the Investment Company Act of 1940;

to the liabilities of that section, but shall be subject to all other provisions of the Act.

(Amended para. (a) Feb. 5, eff. Mar. 8, 1965, Release 34-7525.)

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 anual 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 is subject to section 15(d) of the Act and (i) which is a real estate investment trust, as defined in section 856 of the Internal Revenue Code, or (ii) a substantial portion of whose business is that of acquiring and holding for investment real estate or interests in real estate or interests in other issuers a substantial portion of whose business is 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 the date on which such issuer's registration statement under the Securities Act of 1933 becomes effective. Such reports shall be filed not more than 60 days after the end of the fiscal quarter for which they are filed, except that the report for the last quarter of the fiscal year shall be filed not more than 120 days after the close of the fiscal year.

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

(2) Any partnership all of whose properties are under long-term net lease to other persons; or

(3) Any issuer which during the fiscal quarter covered by the report has not made any cash distribution to shareholders from any source other than current or retained earnings, unless such issuer is a real estate investment trust or as a matter of policy or practice makes cash distributions to shareholders from any source other than current or retained earnings.

(c) Notwithstanding Rule 15d-13, any issuer which files quarterly reports pursuant to this rule for the first 2 fiscal quarters of any fiscal year need not file a semi-annual report on Form 9-K for the period covered by such quarterly reports.

(Amended and added para. (b) (3) Feb. 28, eff. Apr. 1, 1964, Release 34-7246; para. (a) amended Feb. 5, eff. Mar. 8, 1965, Release 34-7525; para. (a) further amended eff. Apr. 14, 1965, Release 34-7576.)

Rule 15d-16. Reports of Foreign Private Issuers on Form 6-K

(a) Every foreign private issuer which is subject to Rule 15d-1 shall make reports on Form 6-K, except that this rule shall not apply to

(1) North American or Cuban issuers; (2) Investment companies required to file quarterly reports pursuant to Rule 15d-12; or

(3) Issuers of American depositary receipts for securities of any foreign issuer.

(b) Such reports shall be transmitted promptly after the information required by Form 6-K is made public by the issuer, by the country of its domicile or under the laws of which it was incorporated or organized or by a foreign securities exchange with which the issuer has filed the information.

(c) Reports furnished pursuant to this rule shall not be deemed to be "filed" with the Commission or otherwise subject to the liabilities of section 18 of the Act.

(Adopted, Apr. 28, Release 34-8066, eff. May 31, 1967.)

Rule 15d-20. Rescinded eff. Mar. 8, 1965, Release 34-7525

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