Title 17: Commodity and Securities Exchanges
CHAPTER II: SECURITIES AND EXCHANGE COMMISSION (CONTINUED)
PART 250: GENERAL RULES AND REGULATIONS, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
: Service, Sales and Construction Contracts
250.87 - Subsidiaries authorized to perform services or construction or to sell goods.
(a) Subject to compliance with the provisions of such rules, regulations, or orders of the Commission as may be applicable (including ? 250.90), the following classes of subsidiary companies of registered holding companies may perform services or construction for, or sell goods to, associate companies thereof:
(1) An approved mutual service company.
(2) A subsidiary company whose organization and conduct of business the Commission has found, pursuant to ? 250.88, sufficient to meet the requirements of section 13(b) of the Act.
(3) A subsidiary company which is principally engaged in the business of an operating electric or gas utility company, or any business or businesses other than that of selling goods to associate companies, that of performing services or construction, that of a holding company of fiscal or financing agency of a holding company, or that of an investment company or investment trust; and which, incidentally to such business, performs such services or construction or sells such goods.
(b) Any subsidiary of a registered holding company, whether or not it is a company specified in paragraph (a) (1), (2), or (3) of this section, may perform services or construction for; or sell goods to, an associate company thereof if:
(1) Such associate company is not an electric or gas utility company and is principally engaged in a business or businesses other than that of a holding company or fiscal or financing agency of a holding company, or that of an investment company or investment trust; or
(2) Such services, construction, or goods are reasonably required by such associate to meet a break-down or other emergency, and the parties believe in good faith that, under the conditions then existing, such transaction will be to the advantage of such associate; or
(3) Such transaction consists of performance of a contract made before August 26, 1935, for the construction of a specific project, building, or unit, pursuant to which contract substantial expenses were incurred before August 26, 1935; or
(4) Such transaction consists of the sale, at not more than cost less depreciation, of goods purchased by such subsidiary company for its own use; or
(5) Such transaction consists of a sale of goods which is merely incidental to a sale of an entire business or a substantial portion thereof, or to a sale of assets other than goods; or
(6) Such transaction consists of a sale of goods produced by the seller.
(c) This section shall not be applicable to a subsidiary which is itself a registered holding company. Such a company may perform services or construction for, or sell goods to, associate companies as provided in ? 250.85.