Rule 6a-1. Form of Application and Amendments

(a) An application of an exchange for registration as a national securities exchange, or for exemption from such registration, shall be made in duplicate on Form 1, each of which shall be accompanied by the statement and exhibits prescribed to be filed in connection therewith.

(b) An amendment to such application shall be made in duplicate on Form 1-A, and each amendment shall be dated and numbered in order of filing.

(c) Promptly after the discovery that any information in the statement, any exhibit, or any amendment was inaccurate when filed, the exchange shall file with the Commission an amendment correcting such inaccuracy.

(d) Whenever the number of changes to be reported in an amendment, or the number of amendments filed, are so great that the purpose of clarity will be promoted by the filing of a new complete statement and exhibits, an exchange may, at its election, or shall, upon request of the Commission, file as an amendment a complete new statement together with all exhibits which are prescribed to be filed in connection with Form 1. Rule 6a-2. Annual Amendments to Registration Statement or Exemption Statements of Exchanges

Prior to June 30 of each year, each exchange registered as a national securities exchange or exempted from such registration shall file an annual amendment setting forth:

(a) All changes, and the effective dates thereof, which have been effected in any of the information contained or incorporated in the statement, or in Exhibits A(1), A(2), A(3), B, C, and D, and which have not previously been reported in an annual amendment. Such amendment shall bring the statement and Exhibits A(1), A(2), A (3), B, C, and D up to date as of the latest practicable date within 1 month of the date on which the amendment is filed. In the event that no changes have occurred in any of this material during the period covered by the amendment, a statement to that effect shall be set forth in the amendment.

(b) Complete Exhibits E and F as of the end of the latest fiscal year of the exchange, and of each affiliate and subsidiary listed in answer to Item 8 of the statement. In the event that Exhibit F is inapplicable to the exchange for the reason that it has no affiliate or subsidiary, the amendment shall include a statement to that effect in lieu of the information called for in Exhibit F.

(c) Complete Exhibits G, H, I, J, K, L, and M. The information contained in these exhibits shall be up to date as of the latest practicable date within 3 months of the date on which the annual amendment is filed.

Rule 6a-3. Supplemental Material

Each exchange registered as a national securities exchange or exempted from such registration shall furnish the following supplemental material:

(a) Within 10 days after any action is taken which renders no longer accurate any of the information contained or incorporated in the statement or in any exhibit (except Exhibits E, F, L, and M), or in any amendment thereto, the exchange shall file with the Commission written notification in triplicate setting forth the nature of such action and the effective date thereof. Such notification may be filed either in the form of a letter or in the form of a notice made generally available to members of the exchange.

(b) Within 10 days after issuing or making generally available to members of the exchange any material (including notices, circulars, bulletins, lists, periodicals, etc.) the exchange shall file with the Commission three copies of such material.

(c) Within 15 days after the end of each calendar month, the exchange shall file with the Commission a report concerning the securities sold on such exchange during such calendar month, setting forth:

(1) the number of shares of stock sold and the aggregate dollar amount thereof;

(2) the principal amount of bonds sold and the aggregate dollar amount thereof; and

(3) the number of units of rights and warrants sold and the aggregate dollars amount thereof.

Rule 7c2-1. Exemption from Section 7(c)(2) of Certain Securities Exempted From Registration or Admitted to Trading on Exchanges Exempted From Registration

(a) So long as any security continues to be listed on a national securities exchange as a security exempted from the operation of section 12(a), pursuant to a rule which specifically provides that this rule shall be applicable to such security, such security shall be exempt from the operation of section 7(c) (2) to the extent necessary to render lawful any direct or indirect extension or maintenance of credit thereon or any direct or indirect arrangement therefor which would not have been unlawful if such security

had been a security (other than an exempted security) registered on a national securities exchange.

(b) So long as any security which is not registered on a national securities exchange continues to be admitted to either listed or unlisted trading privileges on any exchange which is exempted from registration as a national securities exchange, such security shall be exempt from the operation of section 7(c) (2) to the extent necessary to render lawful any direct or indirect extension or maintenance of credit thereon or any direct or indirect arrangement therefor which would not have been unlawful if such security had been a security (other than an exempted security) registered on a national securities exchange.

374-863 O-70-2

8c-1

Rule 8c-1. Hypothecation of Customers' Securities

(a) General provisions. No member of a national securities exchange, and no broker or dealer who transacts a business in securities through the medium of any such member shall, directly or indirectly, hypothecate or arrange for or permit the continued hypothecation of any securities carried for the account of any customer under circumstances

(1) that will permit the commingling of securities carried for the account of any such customer with securities carried for the account of any other customer, without first obtaining the written consent of each such customer to such hypothecation;

(2) that will permit such securities to be commingled with securities carried for the account of any person other than a bona fide customer of such member, broker or dealer under a lien for a loan made to such member, broker or dealer; or

(3) that will permit securities carried for the account of customers to be hypothecated, or subjected to any lien or liens or claim or claims of the pledgee or pledgees, for a sum which exceeds the aggregate indebtedness of all customers in respect of securities carried for their accounts; except that this clause shall not be deemed to be violated by reason of an excess arising on any day through the reduction of the aggregate indebtedness of customers on such a day: Provided, That funds or securities in an amount sufficient to eliminate such excess paid or placed in transfer to pledgees for the purpose of reducing the sum of the liens or claims to which securities carried for the account of customers are subjected as promptly as practicable after such reduction occurs, but before the lapse of one-half hour after the commencement of banking hours on the next banking day at the place where the largest principal amount of loans of such member, broker or dealer are payable and, in any event, before such member, broker or dealer on such day has obtained or increased any bank loan collateralized by securities carried for the account of customers.

(b) Definitions. For the purposes of

rule

(1) the term "customer" shall not be dece to include any general or special partner or director or officer of such member, broker dealer, or any participant, as such, in any k group or syndicate account with such membe broker or dealer or with any partner, officer, î director thereof;

(2) the term "securities carried for the ac005 of any customer" shall be deemed to mean:

(i) securities received by or on behalf of su member, broker or dealer for the account of 22 customer;

(ii) securities sold and appropriated by suc member, broker or dealer to a customer, except that if such securities were subject to a lien when appropriated to a customer they shall not be deemed to be "securities carried for the account of any customer" pending their release from such lien as promptly as practicable;

(iii) securities sold, but not appropriated, by such member, broker or dealer to a customer who has made any payment therefor, to the extent that such member, broker or dealer owns and has received delivery of securities of like kind, except that if such securities were subject to a lien when such payment was made they shall not be deemed to be "securities carried for the account of any customer" pending their release from such lien as promptly as practicable;

(3) "aggregate indebtedness" shall not be deemed to be reduced by reason of uncollected items. In computing aggregate indebtedness, related guaranteed and guarantor accounts shall be treated as a single account and considered on a consolidated basis, and balances in accounts carrying both long and short positions shall be adjusted by treating the market value of the securities required to cover such short positions as though such market value were a debit; and

(4) in computing the sum of the liens or claims to which securities carried for the account of customers of a member, broker or dealer are subject, any rehypothecation of such securities by another

ember, broker or dealer who is subject to this ule or to Rule 15c2-1 shall be disregarded.

(c) Exemption for cash accounts. The provisions of paragraph (a)(1) hereof shall not pply to any hypothecation of securities carried for the account of a customer in a special cash account within the meaning of section 4(c) of Regulation T of the Board of Governors of the - Federal Reserve System: Provided, That at or before the completion of the transaction of purchase of such securities for, or of sale of such securities to, such customer, written notice is given or sent to such customer disclosing that such securities are or may be hypothecated under circumstances which will permit the commingling thereof with securities carried for the account of other cus:tomers. The term "the completion of the transaction" shall have the meaning given to such term by Rule 15c1-1(b).

(d) Exemption for clearing house liens. The provisions of paragraphs (a) (2), (a) (3), and (ƒ) hereof shall not apply to any lien or claim of the clearing corporation, or similar department or association, of a national securities exchange, for a loan made and to be repaid on the same calendar day, which is incidental to the clearing of transactions in securities or loans through such corporation, department, or association: Provided, however, That for the purpose of paragraph (a) (3) hereof, "aggregate indebtedness of all customers in respect of securities carried for their accounts" shall not include indebtedness in respect of any securities subject to any lien or claim exempted by this paragraph.

(e) Exemption for certain liens on securities of noncustomers. The provisions of paragraph (a) (2) hereof shall not be deemed to prevent such member, broker, or dealer from permitting securities not carried for the account of a customer to be subjected (i) to a lien for a loan made against securities carried for the account of customers, or (ii) to a lien for a loan made and to be repaid on the same calendar day. For the purpose of this exemption, a loan shall be deemed to be "made against securities carried for the account of customers" if only securities carried for the account of customers are used to obtain or to increase such loan or as substitutes for other securities carried for the account of customers.

(f) Notice and certification requirements. No person subject to this section shall hypothecate

any security carried for the account of a customer unless, at or prior to the time of each such hypothecation, he gives written notice to the pledge that the security pledged is carried for the account of a customer and that such hypothecation does not contravene any provision of this rule, except that in the case of an omnibus account the member, broker or dealer for whom such account is carried may furnish a signed statement to the person carrying such account that all securities carried therein by such member, broker or dealer will be securities carried for the account of his customers and that the hypothecation thereof by such member, broker or dealer will not contravene any provision of this rule. The provisions of this paragraph shall not apply to any hypothecation of securities under any lien or claim of a pledgee securing a loan made and to be repaid on the same calendar day.

(g) The fact that securities carried for the accounts of customers and securities carried for the accounts of others are represented by one or more certificates in the custody of a clearing corporation or other subsidiary organization of either a national securities exchange or of a registered national securities association, or of a custodian bank, in accordance with a system for the central handling of securities established by a national securities exchange or a registered national securities association, pursuant to which system the hypothecation of such securities is effected by bookkeeping entries without physical delivery of such securities, shall not, in and of itself, result in a commingling of securities prohibited by paragraph (a) (1) or (a) (2) hereof, whenever a participating member, broker or dealer hypothecates securities in accordance with such system: Provided, however, That (i) any such custodian of any securities held by or for such system shall agree that it will not for any reason, including the assertion of any claim, right or lien of any kind, refuse or refrain from promptly delivering any such securities (other than securities then hypothecated in accordance with such system) to such clearing corporation or other subsidiary organization or as directed by it, except that nothing in such agreement shall be deemed to require the custodian to deliver any securities in contravention of any notice of levy, seizure or similar notice, or order, or judgment, issued or directed by a governmental agency or court, or officer thereof, having jurisdiction over such custodian, which on its face

affects such securities; (ii) such systems shall have safeguards in the handling, transfer and delivery of securities and provisions of fidelity bond coverage of the employees and agents of the clearing corporation or other subsidiary organization and for periodic examinations by independent public accountants; and (iii) the provisions of this subparagraph (g) shall not be effective with respect to any particular system unless the agreement re

quired by (i) and the safeguards and prov required by (ii) shall have been deemed adequ by the Commission for the protection of invest and unless any subsequent amendments to agreement, safeguards or provisions shall b been deemed adequate by the Commission for protection of investors.

(Adopted para. (g) May 25, eff. May 31, 1966, Belete

34-7896.)