Evening star., 1933-06-14

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Protection of the public was the pri-
mary purpose of the trainers of the
new Federal securities act.
The extent to which it will be ef-
fective will depend in large measure
upon the intelligence with which in
vestors are able to make use of the mass
Of statistical and factual material which
will be made available to them.
No authority is vested in the Fed
eral Trade Commission to pass upon
the value or soundness of security.
It's function is to see that full and
accurate information as to the security
Is furnished to purchasers and the
public generally and that no fraud IS
practiced in it's sale. Speculative Sc
curities may still be offered and the
public Is as free to buy them as ever.
Thirty-two Questions Specified.
Registration statements applying to
domestic securities must be accom-
panied by answers to questions in what
Is designated in the law as schedule A.
This schedule contains no less than
80 items of information which must
be furnished. Many of the questions
call for copies of documents.
When prospectus is issued to the
public it must contain the same in
formation as in the registration state
ment except that copies of various
documents may be omitted and such
other items as are held by the COM
mission to be unnecessary also may be
left out. The data must be of date
not more than IL anterior months TO
its use
The term prospectus is defined to
mean any prospectus, notice, circular,
advertisement, letter or communication,
written or delivered by radio, which
offers any security for sale. If pros
pectus is in the form of a radio broad
cast a copy Of it must be filed with the
commission.
The effective date of a registration
statement is 20 days after its filing
unless the commission issues a stop
order to prohibit a public offering of
the security. If it appears to the COM
mission that a registration statement
Is on its face incomplete or inaccurate
in any material respect it may give an
opportunity for hearing. If the state
ment is amended in a satisfactory man
ner stop order, if such has been
issued, will cease to be effective.
The extent of the power Of the COM
mission may be realized from the fact
that in determining whether a stop
order shall be issued it may have access
to and may demand the production of
any books and papers of the issuer,
underwater or any other person in
respect to any matter relevant to the
examination. If the issuer or under
writer shall fail to cooperate. such
conduct shall be proper ground for the
issuance of stop order
Form of Fiscal Reports Prescribed.
Among other powers given to the
commission is the authority to pre-
scribe the form in which required in
formation shall be she forth. the items
or details to be shown in the balance
sheet and earning statement and the
methods to be followed in the prepara-
ton of accounts, in the appraisal or
valuation of assets and liabilities, in
the determination of depreciation and
depletion, in the differentiation Of re-
curing and homecoming income, in
the differentiation of investment and
operating income and in the prepara-
tion of consolidated balance sheets or
income accounts of any person or cor
poration directly or indirectly control
ling or controlled by the issuer.
The chief items of information called
for by schedule A in registering new
issues of securities are as follows:
Names and addresses of the directors
and the chief executive, financial and
accounting officers If the issuer be a
corporation and of all partners If the
issuer be partnership.
Names and addresses of the under
writer's.
Names and addresses of all persons
owning of record or beneficially, if
known, more than 10 per cent of any
class of stock of the issuer, or more
than 10 per cent in the aggregate of
the outstanding stock as Of a date
within 20 days prior to the filing of the
registration statement.
The amount of securities of the is