ule 15c3-1. Ratio of Aggregate Indebtedness

to Net Capital.

(a) General provision.-No broker or dealer all permit his aggregate indebtedness to all other rsons to exceed 2,000 per centum of his net pital.

(b) Exemptions. The provisions of this rule all not apply to

(1) any broker (A) whose securities business is ited to acting as agent for the issuer in solicitsubscriptions for securities of such issuer, (B) o promptly transmits to the issuer all funds, 1 promptly delivers to the subscriber all securi3, received in connection therewith, and (C) who es not otherwise hold funds or securities for or e money or securities to customers.

2) any member of the American Stock Exnge, Boston Stock Exchange, Midwest Stock change, New York Stock Exchange, Pacific 1st Stock Exchange, Philadelphia-Baltimore ck Exchange, Pittsburgh Stock Exchange, or t Lake Stock Exchange, all of whose rules and led practices are deemed by the Commission to ose requirements more comprehensive than the irements of this rule: Provided. That the extion as to the members of any exchange may uspended or withdrawn by the Commission at time, by sending at least ten (10) days' writnotice to such exchange, if it appears to the mission necessary or appropriate in the pubnterest or for the protection of investors so

0.

›) Definitions. For the purpose of this rule: 1) The term "aggregate indebtedness" shall eemed to mean the total money liabilities of a er or dealer arising in connection with any saction whatsoever, including, among other gs: money borrowed; money payable against rities loaned and securities "failed to receive"; market value of securities borrowed (except lelivery against customers' sales) to the extent hich no equivalent value is paid or credited; mers' free credit balances; credit balances Istomers' accounts having short positions in ities; and equities in customers' commodities res accounts; but excluding

) indebtedness adequately collateralized, as nafter defined, by securities or spot commodowned by the broker or dealer;

(B) indebtedness to other brokers or dealers adequately collateralized, as hereinafter defined, by securities or spot commodities owned by the broker or dealer;

(C) amounts payable against securities loaned which securities are owned by the broker or dealer;

(D) amounts payable against securities failed to receive which securities were purchased for the account of, and have not been sold by, the broker or dealer;

(E) indebtedness adequately collateralized, as hereinafter defined, by exempted securities;

(F) amounts segregated in accordance with the Commodity Exchange Act and the rules and regulations thereunder;

(G) fixed liabilities adequately secured by real estate or any other asset which is not included in the computation of "net capital" under this rule;

(H) liabilities on open contractual commitments;

(I) indebtedness subordinated to the claims of general creditors pursuant to a satisfactory subordination agreement, as hereinafter defined;

(2) The term "net capital" shall be deemed to mean the net worth of a broker or dealer (that is, the excess of total assets over total liabilities), adjusted by

(A) adding unrealized profits (or deducting unrealized losses) in the accounts of the broker or dealer and, if such broker or dealer is a partnership, adding equities (or deducting deficits) in accounts of partners, as hereinafter defined;

(B) deducting fixed assets and assets which cannot be readily converted into cash (less any indebtedness secured thereby) including, among other things, real estate; furniture and fixtures; exchange memberships; prepaid rent, insurance and expenses; good will; organization expenses; all unsecured advances and loans; customers' unsecured notes and accounts; and deficits in customers' accounts, except in bona fide cash accounts within the meaning of section 4 (c) of Regulation T of the Board of Governors of the Federal Reserve System;

(C) deducting the percentages specified below of the market value of all securities, long and short (except exempted securities) in the capital, proprietary and other accounts of the broker or

dealer, including securities loaned to the broker or dealer pursuant to a satisfactory subordination agreement, as hereinafter defined, and if such broker or dealer is a partnership, in the accounts of partners, as hereinafter defined:

(i) in the case of non-convertible debt securities having a fixed interest rate and a fixed maturity date which are not in default, if the market value is not more than 5% below the face value, the deduction shall be 5% of such market value; if the market value is more than 5% but not more than 30% below the face value, the deduction shall be a percentage of market value, equal to the percentage by which the market value is below the face value; and if the market value is 30% or more below the face value, such deduction shall be 30%;

(ii) in the case of cumulative, non-convertible preferred stock ranking prior to all other classes of stock of the same issuer, which is not in arrears 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 tal, proprietary and other accounts of the br or dealer and, if such broker or dealer is a part ship, in accounts of partners, as hereinafter fined; Provided, however, That this dedu shall not apply to exempted securities, and t the deduction with respect to any individual mitment shall be reduced by the unrealized p in an amount not greater than the percentag duction provided for in subparagraph (C), (a: creased by the unrealized loss) in such com ment; and that in no event shall an unrea profit on any closed transactions operate to: crease net capital;

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

(G) deducting, in the case of a broker or de who is a sole proprietor, the excess of (i) li ties which have not been incurred in the cours business as a broker or dealer over (ii) assets used in the business.

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

(4) the term "accounts of partners", where t broker or dealer is a partnership, shall mean counts of partners who have agreed in writing th the equity in such accounts maintained with 50 partnership shall be included as partnership pr erty;

(5) the term "contractual commitments" st include underwriting, when-issued, when-s tributed and delayed delivery contracts, ender ment of puts and calls, commitments in foreig currencies, and spot (cash) commodities contrac but shall not include uncleared regular way p chases and sales of securities and contracts commodities futures; a series of contracts of p chase or sale of the same security conditioned at all, only upon issuance may be treated as individual commitment;

(6) indebtedness shall be deemed to be quately collateralized" within the meaning of the rule, when the difference between the amount the indebtedness and the market value of the co lateral is sufficient to make the loan acceptable s a fully secured loan to banks regularly mak

nparable loans to brokers or dealers in the comnity;

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

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

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

(C) it provides that it shall not be terminated, cinded or modified by mutual consent or otherse, if the effect thereof would be to make the reement inconsistent with the conditions of this e, or to reduce the net capital of the broker or ler 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.

le 15d-1. Requirements of Annual Reports. Every registrant under the Securities Act of 3 which is currently required to file supplentary and periodic information, documents and orts pursuant to section 15 (d) of the SecuriExchange Act of 1934 shall file an annual ort for each fiscal year after the last full fiscal r for which certified financial statements were tained in its registration statement at the time h statement became effective. The report shall filed within 120 days after the close of the fiscal r or within such other periods as may be speed in the appropriate annual report form. le 15d-2. Special Financial Report.

a) If the registration statement of any issuer ject to Rule 15d-1 contained uncertified finan1 statements for the most recent full fiscal year which financial statements were included rein, the registrant shall, within 120 days after 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 pr sions of this rule if financial statements mee the requirements of the appropriate annual re form are otherwise filed as a part of the report

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

Any registrant which has filed with the Cr mission pursuant to Rule 424 under the Securte Act of 1933 copies of a prospectus meeting the quirements of section 10 of that Act after t effective date of the registration statement incorporate in its annual report pursuant Rule 15d-1 any information, including fins statements, contained in the prospectus, provid a copy of the prospectus is filed as an exhibit: 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). er registrant subject to Rule 15d-1 shall file 1 rent report on Form 8-K within ten days after close of any month during which any of the eve specified in that form occurs, unless substantia the same information as that required by F 8-K has been previously reported by registrant.

(b) This rule shall not apply to foreign ernments or political subdivisions thereof; f eign private issuers other than Canadian, Cube Mexican or Philippine issuers; issuers of Amer ican certificates against foreign issues; or to vestment companies required to file quarterly ports pursuant to Rule 15d-12.

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

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

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

(a) Every issuer which, by reason of an underking contained in a registration statement under

Securities Act of 1933, is required to file anal reports on Form 10-K or Form U5S shall e a semi-annual report on Form 9-K for the st half of each fiscal year ending after the close the latest fiscal year for which financial stateents of such issuer were filed in a registration itement under the Securities Act of 1933: Proded, however, That no such report need be filed r any semi-annual period ending prior to June , 1955.

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

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

suers:

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

(3) insurance companies, other than title

surance;

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

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

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

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