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Proposed Rule 3b-5
The Commission believes that it is appropriate to adopt proposed Rule 3b-5 to make it clear that securities identified under Rule 131 are also "securities" within the meaning of Section 3(a)(10) of the Securities Exchange Act of 1934. The provisions of the prosed rile correspond to those of Rule 131. The proposed rule is intended to inform brokers and dealers who deal in industrial revenue bonds., that consideration should be given to the existence of separate securities issued in connection with the issuance of industrial revenue bonds, in determining their obligations under the Securities Exchange Act, where any part of the obligation evidenced by an bond, note, debenture or other evidence of indebtedness is payable from payments made in respect of property or money which is or will be used under a lease, sale or loan arrangement by or for industrial or commercial enterprises. Such separate securities ordinarily would not be exempted securities within the meaning of Section 3(a)(12) of the Act.

The text of the proposed rule is as follows:

Rule 3b-5. Non-Exempt Securities Issued Under Governmental Obligations. 

(a) Any part of an obligation evidenced by any bond, note, debenture, or other evidence of indebtedness issued by any State or Territory of the United States , any political subdivision of a State or Territory, or any agency or instrumentality of one or more States, Territories or political subdivisions thereof, which is payable from payments to be made in respect of property or money which is or will be used, under a lease, sale or loan arrangement, by or for industrial or commercial enterprises, shall be deemed to be a "separate" security within the meaning of Section 3(a)(10) of the Act, issued by the lessee or obligor under the lease, sale or loan arrangement. 

(b) This rule shall apply to transactions of the character described in paragraph (a) only with respect to bonds, notes, debentures or other evidences of indebtedness issued after  , 1968.

All interested persons are invited to submit their views and comments on the prosed rules, in writing, to the Securities and Exchange Commission, Washington, D.C. 20549, on or before March 29, 1968. Expect where it is requested that such communication not be disclosed, they will be considered available for the public inspection. 

By the Commission. 

Orval L. DuBois
Secretary