The Force of the Public Utility Holding Act Has Been Greatly Reduced by Changes in the Securities and Exchange Commission's Enforcement Policies
FGMSD-77-35: Published: Jun 20, 1977. Publicly Released: Jun 20, 1977.
- Full Report:
How well the Securities and Exchange Commission (SEC) carries out its responsibilities in enforcing the Public Utility Holding Company Act of 1935 was evaluated, with primary attention to its enforcement procedures.
The act is designed to protect the public and investors from abuses from the control of gas and electric utility companies by use of holding company devices. Over the years, the SEC has met many of the act's objectives, but not those requiring studies of size, business practices, and controlling influences. The size of many of these companies has increased substantially over the years. Also, such business practices as intercompany loans, dividend payments, and political contributions seem to warrant continuous surveillance. In granting regulatory exemptions, the SEC has relied too much on geographic location of a company's retail services, and not enough on possible detriment to the public interest. Because the energy situation has changed considerably since the act was written, it might be worthwhile to let regulated holding companies engage in fuel and fuel-related businesses.