Evening star., 1933-06-15
ACT COVERS
ALIEN SECURITIES
Congress Places Them on
Sales Basis Similar to
Domestic Bonds.

Foreign as well as domestic securities
come within the scope Of the new Fed
eral securities act.
While Congress has no control over
The foreign governments or corporations
for which funds are raised in this
country, it was able to place the sale
of their securities on a basis quite SIM
liar to that of domestic stocks and
bonds.
American banking houses which
sponsor the foreign securities will be
obliged to assume responsibility for the
fruthfulness and adequacy of the In
formation furnished to purchasers. PERT
inent data relative to the financial
status of the government or corporation
for which the funds are intended and
ers are floating the securities must be
given to the Federal Trade Conmis
sion. The same facts must be included
In any prospectus which is issued, in
cluding sales talks by radio.
The theory is that the restrictions
and penalties will largely put an end
to abuses such as figured in the Senate
Finance Committees investigation OF
the sale of an enormous volume OF Tor
eign bonds in this country in the years
Just preceding the stock market crash.
Must Register New Issues.
New issues of foreign securities must
be registered with the Federal Trade
Commission just as in the case OF do
inestic securities. Instead OF being
signed by the foreign issuer, the regis
tration statement must be signed by its
duly authorized representative IN the
United States. If the security Is issued
by foreign government or political
subdivision thereof it need be signed
only by the underwater in this country.
An underwater, either of foreign or
domestic securities, is defined In the
act as any person or corporation VINO
has purchased from an issuer with
view to, or sells for an issuer in con-
nection with, the distribution OF any
security, or participates or has direct
or indirect participation in any, such
undertaking. or participates or has
participation in the direct or indirect
underwriting of any such undertaking.
The same fee is charged Tor 1orelgn
as for domestic registrations, one one
hundredth of / per cent OF the maxi
mum aggregate price at which the Sc
Curities are proposed to be offered, the
minimum being $25.
Instead of being accompanied by
answers to questions in Schedule A,
which relates to domestic securities,
the registration statement requires IN
formation asked for in what is desig-
mated in the act as Schedule B.
Instead of permitting the public Of
fering of securities 20 days after the
filing of a registration statement as IN
the case of domestic securities only
seven days need elapse. A highly
significant clause Is included IN this
connection. 1t is stipulated that II
the securities are of any foreign pub
lie authority" it must have continued
the full service of its obligations in
the United States" 1t will be difficult
under this section of the act for any
foreign borrowers which defaulted on
their bonds to obtain new money In
the United States.
Same Liability Required.
The same provisions with respect to
the issuance of stop orders, If regis
tration statements contain untrue
or inadequate information, and with
respect to civil and criminal liability
of those signing the statements and
selling the securities, apply that do for
domestic securities.
Schedule B calls for IA items of in
formation Any prospectus which is