Vanderbilt Law Review

First Page



The 1935 Act, like the Investment Company Act of 1940, is concerned primarily with regulation and does not emphasize disclosure, as does the Securities Act of 1933. Under the 1935 Act, unless an exemption is available, all holding companies whose subsidiaries are engaged in the electric utility business or in the retail distribution of natural or manufactured gas must register. Once registered, a holding company becomes subject to two principal kinds of provisions under the Act. The geographical integration and corporate simplification process mandated by section 11 (and sections 6, 7, 9, and 10, which are designed to prevent new corporate or system complications and geographical dispersions through issuances or acquisitions of utility securities or assets); 15 and 2. Miscellaneous regulations of the financing and operation of the holding company system, including transactions with affiliated entities...

Certainly the regulation of public utility holding companies in both their incipient and full-blown form is necessary to continue the benefits derived by the public and to prevent a recrudescence of the excesses of the 1920's in this vital area of our economy. Some features of the statute may be regarded as fossil-of interest primarily to historians-but by and large these provisions should serve as a foil for generations to come. The scope of the discussion in this Article is perhaps the best evidence that the duties of the SEC under the 1935 Act are largely financially oriented and regulatory in nature, and thus did not really appear to fit within the objectives or framework of the Administration's energy reorganization proposal. Nevertheless, the modernization effected by the Code should simplify the tasks of both the Commission and the bar.