Interstate commerce, or otherwise, to negotiate, enter into, or take any step in the performance of any service contract with any such company of which it is an affiliate unless such affiliate is approved as a mutual company under this section.

(c) The provisions of subsections (a) and (b) of this section shall not apply to the making or performance of any service, sales, or construction contract by and between any public-utility company, in its capacity as a member company, and any mutual service company of which it is a member company.

(d) It shall be unlawful for any person engaged in the business of performing service, sales, or construction contracts, by use of the mails or any means or instrumentality of interstate commerce, to enter into or take any step in the performance of any service, sales, or construction contract with any publicutility company, or for any such person, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, to enter into or take any step in the performance of any service, sales, or construction contract with any registered holding company or any subsidiary company thereof or any publicutility company engaged in interstate commerce, in contravention of such rules and regulations or orders regarding reports, accounts, costs, competitive bidding, disclosure of interest, duration of contracts, and similar matters as the Federal Power Commission shall prescribe or issue as necessary or appropriate in the public interest or for the protection of investors or consumers or to prevent the circumvention of the provisions of this Act or the rules and regulations thereunder. Such rules and regulations shall require any person engaged in the business of performing service, sales, or construction contracts on a cooperative or mutual basis to be approved under this section as a mutual service company.

(e) A person may apply to be approved as a mutual service company, upon the terms and conditions hereinafter provided in this section, for the purpose of making and performing service, sales, and/or construction contracts by filing with the Federal Power Commission an application in such form as the Federal Power Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers. Such application shall include

(1) Copies of the articles of incorporation, agreement, association, or cooperation under which the applicant will do business and copies of its bylaws or rules or instruments, whatever the name, corresponding thereto;

(2) A statement of the ownership of the applicant, whether by ownership of securities or otherwise, and the relations and agreements between the applicant and its owner or owners;

(3) Copies of the agreement or agreements under which the member companies of the applicant are to share in its expenses and revenues and a detailed explanation of the method by which such shares are determined and to be maintained and/or adjusted;

(4) A statement of the kinds of service, sales, and/or construction contracts to be performed by the applicant classified and in such detail as the Federal Power Commission may, by rules and regulations, require as necessary or appropriate in the public interest or for the protection of investors or consumers, and a statement of the member companies of the applicant and the contracts with each:

(5) A detailed statement of the business, if any, other than the performance of service, sales, and/or construction contracts with member companies, in which the applicant purposes to engage.

(f) Within thirty days after the filing of an application, the Federal Power Commission shall enter an order either approving, or after notice and opportunity for hearing, disapproving the applicant as a mutual service company, uniess the applicant shall withdraw its application or shall consent to the Federal Power Commission's deferring action thereon for a stated longer period. The filing with the Federal Power Commission of an application shall be deemed to have taken place upon receipt thereof. Amendments to an application may be made upon such terms and conditions as the Federal Power Commission may prescribe.

(g) The Federal Power Commission shall not approve the applicant as a mutual service company unless, in the judgment of the Federal Power Commission, the applicant is so organized as to ownership, costs, revenues and the sharing thereof as reasonably to insure the efficient and economical performance of service, sales, and/or construction contracts by the applicant for member companies (1) at cost fairly and equitably allocated among such member com

panies, and (2) at a substantial saving to member companies over the cost to such companies of comparable contracts if performed by independent persons. (h) Any order of the Federal Power Commission approving a company as a mutual service company may prescribe such terms and conditions regarding the nature and enforcement of the agreements of such mutual service company for the sharing of revenues and expenses among member companies and matters relating to such agreements and the nature, character, and extent of the business to be done by such mutual service company as the Federal Power Commission may deem necessary or appropriate in the public interest or for the protection of investors or consumers or to prevent the circumvention of the provisions of this section or the rules and regulations thereunder.

(i) Every mutual service company shall file with the Federal Power Commission such information and documents in respect of its service, sales, and construction contracts, the composition of its membership, the manner and method of sharing expenses and distributing revenues, and similar matters as the Federal Power Commission may by rules and regulations or order prescribe as necessary or appropriate in the public interest or for the protection of investors

or consumers.

(j) It shall be unlawful for any mutual service company, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, to engage in any business or enter into or perform any transaction in contravention of such rules and regulations or orders regarding the nature and types of businesses and transactions in which such companies may engage, the manner of engaging therein, competitive bidding, costs, disclosure of interest, relations with member companies and affiliates, and similar matters as the Federal Power Commission may prescribe or issue as necessary or appropriate in the public interest or for the protection of investors or consumers or to prevent the circumvention of the provisions of this section or the rules and regulations thereunder.

(k) The Federal Power Commission, after notice and opportunity for hearing, may revoke or suspend the approval given any mutual-service company if it finds that such company has violated any provision of this Act or any rule, regulation, or order thereunder, or that such company is not operated efficiently or economically in the interest of its member companies. The Federal Power Commission upon its own motion or at the request of a member company or a State commission, after notice and opportunity for hearing, may require a reallocation or reapportionment of costs among member companies of a mutualservice company if it finds the existing allocation inequitable and may require the elimination of a service or services to a member company which does not bear its fair proportion of costs or which by reason of its size or other circumstances does not require such service or services.

(1) The Federal Power Commission shall from time to time conduct investigations regarding the making, performance, and costs of service, sales, and construction contracts, the economies resulting therefrom, and the desirability thereof. On the basis of such investigations the Federal Power Commission shall classify the different types of such contracts and the work done thereunder, and shall make recommendations from time to time regarding the standards and scope of such contracts in relation to public-utility companies of different kinds and sizes and the costs incurred thereunder and economies resulting therefrom. Such recommendations shall be made available to State commissions and to the public in such form and at such reasonable charge as the Federal Power Commission may prescribe.

PERIODIC AND OTHER REPORTS

SEC. 14. Every registered holding company shall fi'e with the Commission, and every mutual service company shall file with the Federal Power Commission, such annual, quarterly, and other periodic and special reports, the answers to such specific questions and the minutes of such directors', stockholders', and other meetings as the respective Commission may by rules and regulations or order prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers. Such reports, if required by the rules and regulations of the Commission having jurisdiction thereof, shall be certified by an independent public accountant and shall be made and filed at such time and in such form and detail as such Commission shall prescribe. The Commission shall have power to require that there be included in reports filed with it such information and documents as it may deem necessary or appropriate

to keep reasonably current the information filed under section 5, and such further information concerning the financial condition, security structure, security holdings, assets, and cost thereof, wherever determinable, and affiliations of the reporting company and the associate companies and affiliates thereof as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers. The Federal Power Commission shall have power to require that there be included in reports filed with it such information and documents as it may deem necessary or appropriate to keep reasonably current the information filed under section 13, and such further information concerning the financial condition, transactions, businesses, assets, and cost thereof, wherever determinable, membership, relations with member companies, and similar matters as the Federal Power Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers.

ACCOUNTS AND RECORDS

SEO. 15. (a) Every registered holding company and every subsidiary company thereof shall make, keep, and preserve for such periods, such accounts, costaccounting procedures, correspondence, memoranda, papers, books, and other records as the Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers or for the enforcement of the provisions of this Act or the rules or regulations thereunder.

(b) Every affiliate of a registered holding company or of any subsidiary company thereof or of any public-utility company engaged in interstate commerce or not so engaged or of any mutual-service company, shall make, keep, and preserve for such periods, such accounts, cost-accounting procedures, corre spondence, memoranda, papers, books, and other records relating to any transaction which is subject to any provision of this Act or any rule or regulation thereunder as the Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers or for the enforcement of the provisions of this Act or the rules and regulations thereunder.

(e) Every mutual-service company shall make, keep, and preserve for such periods, such accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other records as the Federal Power Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers or for the enforcement of the provisions of this Act or the rules and regulations thereunder.

(d) The Commission, by rules and regulations from time to time, shall prescribe for companies subject to the provisions of subsection (a) or (b) of this section, and the Federal Power Commission, by rules and regulations from time to time, shall prescribe for mutual-service companies, uniform methods for keeping accounts required under this section, including, among other things, the manner in which the cost of all assets, whenever determinable, shall be shown, the methods of classifying and segregating accounts and the manner in which cost-accounting procedures shall be maintained.

(e) After the commission having jurisdiction thereof has prescribed the form and manner of making and keeping accounts, cost-accounting procedures, Correspondence, memoranda, papers, books, and other records to be kept by any company hereunder, it shall be unlawful for any such company to keep any accounts, cost-accounting procedures, correspondence, memoranda, papers, books, or other records other than those prescribed or such as may be approved by the commission having jurisdiction thereof, or to keep its accounts, costaccounting procedures, correspondence, memoranda, papers, books, or other records in any manner other than that prescribed or approved by the commission having jurisdiction thereof.

(f) All accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other records kept or required to be kept by companies subject to any provision of this section shall be subject at any time and from time to time to such reasonable periodic, special, and other examinations by the commission having jurisdiction thereof or any member or representative thereof as such commission may prescribe. The burden of proof to justify any accounting entry questioned by the commission having jurisdiction thereof shall be on the company making or authorizing such entry. The commission having jurisdiction thereof, after notice and opportunity for hearing, may

prescribe the account or accounts in which particular outlays, receipts, and other transactions shall be entered, charged, or credited and the manner in which such entry, charge, or credit shall be made, and may require an entry to be modified or supplemented so as properly to show the cost of any asset or any other cost.

(g) It shall be the duty of every registered holding company and of every subsidiary company thereof and of every affiliate of a company insofar as such affiliate is subject to any provision of this Act or any rule or regulation thereunder to submit the accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other records of such company to such examinations, in person or by duly appointed attorney, by the holder of any security of such holding company, subsidiary company, or affiliate and by persons having a bona fide interest (as defined by the rules and regulations of the Commission) in any such account, cost-accounting procedure, correspondence, memorandum, paper, book, or other record as the Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or for the protec tion of investors or consumers.

(h) It shall be the duty of every mutual service company to submit the accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other records of such company to such examinations, in person or by duly appointed attorney, by member companies of such company, and by persons having a bona fide interest (as defined by the rules and regulations of the Federal Power Commission) in any such account, cost-accounting procedure, correspondence, memorandum, paper, book, or other record as the Federal Power Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers. (i) Upon application of any person entitled, under the provisions of subsection (g) or (h) of this section or the rules and regulations thereunder, to examine any account, cost-accounting procedure, correspondence, memrandum, paper, book, or other record of a registered holding company or subsidiary company thereof or of a mutual service company or an affiliate of a company, the district courts of the United States, the Supreme Court of the District of Columbia, and the United States courts of any Territory or other place subject to the jurisdiction of the United States shall have the jurisdiction to issue writs of mandamus commanding any such company to submit any such account, costaccounting procedure, correspondence, memorandum, paper, book, or other record to such examination.

LIABILITY FOR MISLEADING STATEMENTS

SEC. 16. (a) In case any part of the declaration filed pursuant to section 7, or any rule or regulation thereunder, when such part became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, there shall accrue all of the rights and remedies and there shall attach all of the liabilities as provided in section 11 of the Securities Act of 1933, as amended, with respect to a registration statement filed pursuant to said Securities Act of 1933, as amended. Any action maintained to enforce any liability under this subsection shall be subject to the limitations prescribed in section 13 of said Securities Act of 1933, as amended; and jurisdiction of all suits in equity and actions at law brought to enforce any liability or duty created by this subsection or the rules and regulations thereunder shall be governed by the provisions of section 22 of said Securities Act of 1933, as amended.

(b) Any person who shall make or cause to be made any statement in any application, report, registration statement, or document filed pursuant to this Act, or any rule or regulation thereunder, which statement was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact; shall be liable in the same manner, to the same extent, and subject to the same limitations as provided in section 18 of the Securities Exchange Act of 1934 with respect to an application, report, or document filed pursuant to said Securities Exchange Act of 1934; and jurisdiction of all suits in equity and actions at law brought to enforce any liability or duty created by this subsection or the rules and regulations thereunder shall be governed by the provisions of section 27 of said Securities Exchange Act of 1934.

(c) The rights and remedies provided by this Act shall be în addition to any and all other rights and remedies that may exist at law or in equity; but no person permitted to maintain a suit for damages under the provisions of this Act shall recover, through satisfaction of judgment in one or more actions, a total amount in excess of his actual damages on account of the act complained of.

OFFICERS, DIRECTORS, AND OTHER AFFILIATES

SEC. 17. (a) Every person who is an officer, director, or other affiliate of a registered holding company shall file with the Commission in such form as the Commission shall prescribe (1) at the time of the registration of such holding company or within ten days after such person becomes an officer, director, or other affiliate, a statement of the securities of such registered holding company and/or any subsidiary company thereof of which he is, directly or indirectly, the beneficial owner, and (2) within ten days after the close of each calendar month thereafter, if there has been any change in such ownership during such month, a statement of such ownership as of the close of such calendar month and of the changes in such ownership that have occurred during such calendar month.

(b) For the purpose of preventing the unfair use of information which may have been obtained by such officer, director, or other affiliate by reason of his relationship to such registered holding company and/or any subsidiary company thereof, any profit realized by such officer, director, or other affiliate from any purchase and sale, or any sale and purchase, of any security of such registered holding company or any subsidiary company thereof within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the holding company or subsidiary company in respect of the security of which such profit was realized, irrespective of any intention on the part of such officer, director, or other affiliate in entering into such transaction to hold the security purchased or not to repurchase the security sold for a period of more than six months. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the company entitled thereto or by the owner of any security of such company in the name and in the behalf of such company if such company shall fail or refuse to bring such suit within sixty days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be brought more than two years after the date such profit was realized. This subsection shall not be construed to cover any transaction where such person was not an officer, director, or other affilate at the times of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the Commission by rules and regulations may, as necessary or appropriate in the public interest or for the protection of investors or consumers, exempt as not comprehended within the purpose of this subsection.

INVESTIGATIONS; INJUNCTIONS AND PROSECUTIONS OF OFFENSES

SEO. 18. (a) The Commission, in its discretion, may investigate any facts, Conditions, practices, or matters which it may deem necessary or appropriate to determine whether any person has violated or is about to violate any provision of this Act or any rule or regulation thereunder, or to aid in the enforcement of the provision of this Act, in the prescribing of rules and regulations tereunder, or in obtaining information to serve as a basis for recommending further legislation concerning the matters to which this Act relates. The Comallon may require or permit any person to file with it a statement in writing, ader oath or otherwise as it shall determine, as to any or all facts and circumstances concerning a matter which may be the subject of investigation. The Crumission, in its discretion, may publish or make available to State commisins information concerning any such subject.

(b) The Commission upon its own motion or at the request of a State commission may investigate, or obtain any information regarding, the business, Enancial condition, or practices of any registered holding company or subsidiary

pany thereof or facts, conditions, practices, or matters affecting the relations tween any such company and any other company or companies in the same Lolding-company system.